Question 1

How do demand and supply for banana cream pie change if the price of bananas increased?

Accepted Answer

A)  Demand decreases, and supply increases. 
B)  Demand does not change, and supply decreases. 
C)  Demand increases, and supply does not change. 
D)  Both demand and supply increase. 
A)  Demand decreases, and supply increases. 
B)  Demand does not change, and supply decreases. 
C)  Demand increases, and supply does not change. 
D)  Both demand and supply increase.

Question 2

Market demand is given as QD = 70 - P. Market supply is given as QS = 3P. If price increases from $30 to $34, what is the price elasticity of demand?

Accepted Answer

A)  0.5 
B)  0.9 
C)  1.1 
D)  2.2 
A)  0.5 
B)  0.9 
C)  1.1 
D)  2.2

Question 3

What is the amount of the good buyers are willing and able to purchase?

Accepted Answer

A)  demand 
B)  quantity supplied 
C)  quantity demanded 
D)  supply 
A)  demand 
B)  quantity supplied 
C)  quantity demanded 
D)  supply

Question 4

Figure 4-6
  
-Refer to the Figure 4-6. What could cause the shift from D to D₁
?

Accepted Answer

A)  an increase in price 
B)  a decrease in the price of a complement 
C)  an increase in technology 
D)  a decrease in the price of a substitute 
A)  an increase in price 
B)  a decrease in the price of a complement 
C)  an increase in technology 
D)  a decrease in the price of a substitute

Question 5

If a surplus exists in a market, what do we know?

Accepted Answer

A)  The actual price is above equilibrium price, and quantity supplied is greater than quantity demanded. 
B)  The actual price is above equilibrium price, and quantity demanded is greater than quantity supplied. 
C)  The actual price is below equilibrium price, and quantity demanded is greater than quantity supplied. 
D)  The actual price is below equilibrium price, and quantity supplied is greater than quantity demanded. 
A)  The actual price is above equilibrium price, and quantity supplied is greater than quantity demanded. 
B)  The actual price is above equilibrium price, and quantity demanded is greater than quantity supplied. 
C)  The actual price is below equilibrium price, and quantity demanded is greater than quantity supplied. 
D)  The actual price is below equilibrium price, and quantity supplied is greater than quantity demanded.

Question 6

There are thousands of wheat farmers who produce and sell wheat and there are millions of consumers who use wheat and wheat products. What would the market for wheat be considered?

Accepted Answer

A)  oligopolistic 
B)  monopolistic 
C)  perfectly competitive 
D)  monopolistically competitive 
A)  oligopolistic 
B)  monopolistic 
C)  perfectly competitive 
D)  monopolistically competitive

Question 7

Which of the following is NOT one of the steps in analyzing how an event affects a market?

Accepted Answer

A)  Determine the number of market participants. 
B)  Decide whether the curve shifts to the right or to the left. 
C)  Determine whether the event shifts the supply, the demand, or both curves. 
D)  Use a supply-demand diagram to examine how the shift(s) affect the equilibrium. 
A)  Determine the number of market participants. 
B)  Decide whether the curve shifts to the right or to the left. 
C)  Determine whether the event shifts the supply, the demand, or both curves. 
D)  Use a supply-demand diagram to examine how the shift(s) affect the equilibrium.

Question 8

Figure 4-4
  
-Refer to the Figure 4-4. If the price is $25, what would the quantity demanded be?

Accepted Answer

A)  400 
B)  500 
C)  600 
D)  800 
A)  400 
B)  500 
C)  600 
D)  800

Question 9

Figure 4-3
  
-Refer to the Figure 4-3. If the price in this market is currently $14, what would happen?

Accepted Answer

A)  There would be a shortage of 20 units so producers would increase production. 
B)  There would be a surplus of 20 units and the price would tend to fall. 
C)  There would be a shortage of 40 units so producers would increase production. 
D)  There would be a surplus of 40 units and the price would tend to fall. 
A)  There would be a shortage of 20 units so producers would increase production. 
B)  There would be a surplus of 20 units and the price would tend to fall. 
C)  There would be a shortage of 40 units so producers would increase production. 
D)  There would be a surplus of 40 units and the price would tend to fall.

Question 10

If goods A and B are complements, what will result from an increase in the price of A?

Accepted Answer

A)  more A and more B is sold 
B)  more A and less B is sold 
C)  less A and more B is sold 
D)  less A and less B is sold 
A)  more A and more B is sold 
B)  more A and less B is sold 
C)  less A and more B is sold 
D)  less A and less B is sold

Question 11

Market demand is given as QD = 300 - 3P. Market supply is given as QS = 2P + 100. If price increases from $40 to $45, what is the price elasticity of demand?

Accepted Answer

A)  0.4 
B)  0.8 
C)  1.3 
D)  1.8 
A)  0.4 
B)  0.8 
C)  1.3 
D)  1.8

Question 12

Market demand is given as QD = 140 - 5P. Market supply is given as QS = 2P. If price increases from $21 to $23, what is the price elasticity of demand?

Accepted Answer

A)  0.3 
B)  1.0 
C)  3.7 
D)  9.4 
A)  0.3 
B)  1.0 
C)  3.7 
D)  9.4

Question 13

If the demand for a product decreases, what would we expect?

Accepted Answer

A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease 
A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease

Question 14

Market demand is given as QD = 75 - P. Market supply is given as QS = 3P + 15. If price increases from $50 to $53, what is the price elasticity of demand?

Accepted Answer

A)  0.1 
B)  0.2 
C)  1.1 
D)  2.2 
A)  0.1 
B)  0.2 
C)  1.1 
D)  2.2

Question 15

Table 4-2
  
-Refer to the Table 4-2. What is the space that would represent an increase in equilibrium price and an indeterminate change in equilibrium quantity?

Accepted Answer

A)  space A 
B)  space B 
C)  space C 
D)  space D 
A)  space A 
B)  space B 
C)  space C 
D)  space D

Question 16

If buyers and/or sellers are price takers, what can they do individually?

Accepted Answer

A)  They have no influence on market price. 
B)  They have ultimate control over market price. 
C)  Buyers will be able to find prices lower than those determined in the market. 
D)  They can somewhat influence the market price. 
A)  They have no influence on market price. 
B)  They have ultimate control over market price. 
C)  Buyers will be able to find prices lower than those determined in the market. 
D)  They can somewhat influence the market price.

Question 17

Lead is an important input in the production of crystal. If the price of lead decreases, all else being equal, what would we expect?

Accepted Answer

A)  the supply of crystal to be unaffected 
B)  the supply of crystal to decrease 
C)  the supply of crystal to increase 
D)  the supply of lead to increase 
A)  the supply of crystal to be unaffected 
B)  the supply of crystal to decrease 
C)  the supply of crystal to increase 
D)  the supply of lead to increase

Question 18

Pens are normal goods. What will happen to the equilibrium price of pens if the prices of pencils rises, consumers experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to rise in the near future, the population increases, fewer firms manufacture pens, and the wages of pen-makers increase?

Accepted Answer

A)  price will rise 
B)  price will fall 
C)  price will stay exactly the same 
D)  price change will be ambiguous 
A)  price will rise 
B)  price will fall 
C)  price will stay exactly the same 
D)  price change will be ambiguous

Question 19

For a seller, which of the following is NOT positively related?

Accepted Answer

A)  the price of the good and the seller's profit 
B)  the price of the good and quantity supplied 
C)  the seller's profit and product cost 
D)  the seller's profit and quantity supplied 
A)  the price of the good and the seller's profit 
B)  the price of the good and quantity supplied 
C)  the seller's profit and product cost 
D)  the seller's profit and quantity supplied

Question 20

Market demand is given as Qd = 80 - P. Market supply is given as Qs = 3P. What would result if the market price were $30?

Accepted Answer

A)  a shortage of 60 
B)  a surplus of 60 
C)  a surplus of 40 
D)  a shortage of 40 
A)  a shortage of 60 
B)  a surplus of 60 
C)  a surplus of 40 
D)  a shortage of 40

How do demand and supply for banana cream pie change if the price of bananas increased?

Market demand is given as QD = 70 - P. Market supply is given as QS = 3P. If price increases from $30 to $34, what is the price elasticity of demand?

What is the amount of the good buyers are willing and able to purchase?

Figure 4-6 -Refer to the Figure 4-6. What could cause the shift from D to D₁ ?

If a surplus exists in a market, what do we know?

There are thousands of wheat farmers who produce and sell wheat and there are millions of consumers who use wheat and wheat products. What would the market for wheat be considered?

Which of the following is NOT one of the steps in analyzing how an event affects a market?

Figure 4-4 -Refer to the Figure 4-4. If the price is $25, what would the quantity demanded be?

Figure 4-3 -Refer to the Figure 4-3. If the price in this market is currently $14, what would happen?

If goods A and B are complements, what will result from an increase in the price of A?

Market demand is given as QD = 300 - 3P. Market supply is given as QS = 2P + 100. If price increases from $40 to $45, what is the price elasticity of demand?

Market demand is given as QD = 140 - 5P. Market supply is given as QS = 2P. If price increases from $21 to $23, what is the price elasticity of demand?

If the demand for a product decreases, what would we expect?

Market demand is given as QD = 75 - P. Market supply is given as QS = 3P + 15. If price increases from $50 to $53, what is the price elasticity of demand?

Table 4-2 -Refer to the Table 4-2. What is the space that would represent an increase in equilibrium price and an indeterminate change in equilibrium quantity?

If buyers and/or sellers are price takers, what can they do individually?

Lead is an important input in the production of crystal. If the price of lead decreases, all else being equal, what would we expect?

For a seller, which of the following is NOT positively related?

Market demand is given as Qd = 80 - P. Market supply is given as Qs = 3P. What would result if the market price were $30?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 4: The Market Forces of Supply and Demand

How do demand and supply for banana cream pie change if the price of bananas increased?

Market demand is given as QD = 70 - P. Market supply is given as QS = 3P. If price increases from $30 to $34, what is the price elasticity of demand?

What is the amount of the good buyers are willing and able to purchase?

Figure 4-6 -Refer to the Figure 4-6. What could cause the shift from D to D₁ ?

If a surplus exists in a market, what do we know?

There are thousands of wheat farmers who produce and sell wheat and there are millions of consumers who use wheat and wheat products. What would the market for wheat be considered?

Which of the following is NOT one of the steps in analyzing how an event affects a market?

Figure 4-4 -Refer to the Figure 4-4. If the price is $25, what would the quantity demanded be?

Figure 4-3 -Refer to the Figure 4-3. If the price in this market is currently $14, what would happen?

If goods A and B are complements, what will result from an increase in the price of A?

Market demand is given as QD = 300 - 3P. Market supply is given as QS = 2P + 100. If price increases from $40 to $45, what is the price elasticity of demand?

Market demand is given as QD = 140 - 5P. Market supply is given as QS = 2P. If price increases from $21 to $23, what is the price elasticity of demand?

If the demand for a product decreases, what would we expect?

Market demand is given as QD = 75 - P. Market supply is given as QS = 3P + 15. If price increases from $50 to $53, what is the price elasticity of demand?

Table 4-2 -Refer to the Table 4-2. What is the space that would represent an increase in equilibrium price and an indeterminate change in equilibrium quantity?

If buyers and/or sellers are price takers, what can they do individually?

Lead is an important input in the production of crystal. If the price of lead decreases, all else being equal, what would we expect?

For a seller, which of the following is NOT positively related?

Market demand is given as Qd = 80 - P. Market supply is given as Qs = 3P. What would result if the market price were $30?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters