Question 1

If the supply curve for housing has the normal positive slope,rent controls will likely

Accepted Answer

A) increase the amount of housing. 
B) improve the quality of housing. 
C) aggravate the housing shortage. 
D) help low-income families find suitable housing. 
E) increase the demand for housing. 
A) increase the amount of housing. 
B) improve the quality of housing. 
C) aggravate the housing shortage. 
D) help low-income families find suitable housing. 
E) increase the demand for housing.

Question 2

Consumers expressed outrage at the high price of chainsaws after Hurricane Andrew hit Florida and Louisiana,with newspaper editorials accusing suppliers of unconscionable price gouging.Use a supply and demand graph to assist in explaining the increase in the price of chain saws after Hurricane Andrew.

Accepted Answer

An increase in the number of downed tree

Question 3

On a traditional supply and demand diagram,

Accepted Answer

A) price is measured along the horizontal axis and quantity along the vertical axis. 
B) price is measured along the vertical axis and quantity along the horizontal axis. 
C) quantity demanded is measured along the horizontal axis, quantity supplied is measured along the vertical axis, and price is indicated on the contour lines. 
D) quantity is measured along both axes and price is indicated on the contour lines. 
A) price is measured along the horizontal axis and quantity along the vertical axis. 
B) price is measured along the vertical axis and quantity along the horizontal axis. 
C) quantity demanded is measured along the horizontal axis, quantity supplied is measured along the vertical axis, and price is indicated on the contour lines. 
D) quantity is measured along both axes and price is indicated on the contour lines.

Question 4

Which of the following would cause an increase in demand for Toyota automobiles?

Accepted Answer

A) an increase in the price of Toyota automobiles 
B) a decrease in the price of Toyota automobiles 
C) a decrease in the price of Honda automobiles 
D) an increase in the price of Honda automobiles 
A) an increase in the price of Toyota automobiles 
B) a decrease in the price of Toyota automobiles 
C) a decrease in the price of Honda automobiles 
D) an increase in the price of Honda automobiles

Question 5

Equilibrium is reached where there is no inherent force causing quantity supplied or quantity demanded to change.

Accepted Answer

A) True 
 B)False

Question 6

Figure 4-23
  
-In Figure 4-23,which movement will be caused by changes in income?

Accepted Answer

A) A to C 
B) C to A 
C) B to D 
D) B to A 
A) A to C 
B) C to A 
C) B to D 
D) B to A

Question 7

What is the economic reasoning behind the proposal to legalize drugs?

Accepted Answer

A) Legal drugs will greatly increase the supply, which will reduce the price Americans pay to foreign producers of the drugs. 
B) All forms of government restrictions on behavior are immoral, and ought to be removed. 
C) Legal drugs will be much cheaper than illegal drugs, which will reduce incentive for crime to obtain money for drugs and to protect drug "businesses." 
D) Legal drugs will be more expensive than illegal drugs, and the market system will encourage more production, thus lowering the price. 
E) Dealing with supply is always easier than dealing with demand, and legalization accomplishes that. 
A) Legal drugs will greatly increase the supply, which will reduce the price Americans pay to foreign producers of the drugs. 
B) All forms of government restrictions on behavior are immoral, and ought to be removed. 
C) Legal drugs will be much cheaper than illegal drugs, which will reduce incentive for crime to obtain money for drugs and to protect drug "businesses." 
D) Legal drugs will be more expensive than illegal drugs, and the market system will encourage more production, thus lowering the price. 
E) Dealing with supply is always easier than dealing with demand, and legalization accomplishes that.

Question 8

Which of the following will tend to occur if price controls are imposed on a product?

Accepted Answer

A) persistent shortages 
B) illegal markets 
C) illicit channels of distribution 
D) industry investment slows or stops 
E) All of the above are correct. 
A) persistent shortages 
B) illegal markets 
C) illicit channels of distribution 
D) industry investment slows or stops 
E) All of the above are correct.

Question 9

Figure 4-13
  
-The drug BGH (bovine growth hormone)dramatically increases the milk output of dairy cows.Farmers in Wisconsin,a big dairy state,vigorously oppose licensing the drug,fearing that excess supply and a consumer reaction on the purity of food issue will put many of them out of business.Which graph in Figure 4-13 best illustrates the farmers' fears?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 10

Figure 4-12
  
-The silverware industry has been in serious decline since the 1980s.Family dining habits are less formal so people purchase less silverware.Also,in 2006-2008,the price of silver increased from $5 to $20 per ounce.Which graph in Figure 4-12 best illustrates these developments?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 11

Figure 4-3
  
-A 1985 Harvard study showed that the price of cigarettes does not affect how much an individual smokes but whether he smokes.If this is correct,which graph in Figure 4-3 shows the typical individual's demand curve for cigarettes?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 12

The demand curve for a good connects points describing how much consumers

Accepted Answer

A) actually bought at different prices during a particular period. 
B) actually bought at different prices in different periods. 
C) would have been willing and able to buy at different prices during a particular period. 
D) would have been willing and able to buy at different prices in different periods. 
A) actually bought at different prices during a particular period. 
B) actually bought at different prices in different periods. 
C) would have been willing and able to buy at different prices during a particular period. 
D) would have been willing and able to buy at different prices in different periods.

Question 13

Show graphically the effect of technological advance on the price of music downloads.In a separate graph show what happens to the price of CDs as a secondary effect of the new download technology.

Accepted Answer

Figure 4-27
 @#IMG-DLM&_TB1525_00_TB1525_00 The fi

Question 14

Exhibit 4-1
The following are the equations for the supply and demand curves in the market for weezils:
 $\begin{array}{lccc}
  \text { Demand } & Q_{d}=20-2 F  \
 \text { Supply:} &  \mathrm{Q}_{s}=5+3 \mathrm{P} 
\end{array}$

where QS1U1B1dS1U1B0 is the quantity demanded, QS1U1B1sS1U1B0 is the quantity supplied, and P is the price per weezil in dollars.
-Refer to Exhibit 4-1.According to the data given,when the market is in Equilibrium,how many weezils are sold?

Accepted Answer

A) 3 
B) 5 
C) 11 
D) 14 
A) 3 
B) 5 
C) 11 
D) 14

Question 15

Distinguish between demand and quantity demanded.Do the same for supply and quantity supplied.

Accepted Answer

Quantity demanded is the number of units

Question 16

When there is an increase in demand,

Accepted Answer

A) the demand curve shifts toward the origin of the graph. 
B) the demand curve twists clockwise. 
C) the demand curve shifts away from the origin of the graph. 
D) the demand curve twists counterclockwise. 
E) a lower price has increased the amount of the good that consumers will buy. 
A) the demand curve shifts toward the origin of the graph. 
B) the demand curve twists clockwise. 
C) the demand curve shifts away from the origin of the graph. 
D) the demand curve twists counterclockwise. 
E) a lower price has increased the amount of the good that consumers will buy.

Question 17

Suppose demand can be described with the equation Q = 900 - 5P and supply with the equation Q = 100 + 5P.Complete the following table.Determine the equilibrium price and quantity.
 $\begin{array}{r}
&\text { Quantity }&\text { Quantity }&\text { Surplus/ }\
\text {Price}&\text {Demanded}&\text {Supplied}&\text { Shortage }\
\$ 100 &---&---&---\
95  &---&---&---\
90  &---&---&---\
85  &---&---&---\
80  &---&---&---\
75  &---&---&---\
70  &---&---&---\
65  &---&---&---\
60 &---&---&---\
\end{array}$

Accepted Answer

The answer of Suppose demand can be described with the...

Question 18

How will a decrease in price tend to affect supply?

Accepted Answer

A) Supply will increase. 
B) Supply will decrease. 
C) Supply will not change. 
D) Uncertain. 
A) Supply will increase. 
B) Supply will decrease. 
C) Supply will not change. 
D) Uncertain.

Question 19

The imposition of price ceilings on a market often results in

Accepted Answer

A) an increase in investment in the industry. 
B) a persistent surplus in the market. 
C) the diversion of income toward black-market suppliers. 
D) lower prices being offered on the black market. 
A) an increase in investment in the industry. 
B) a persistent surplus in the market. 
C) the diversion of income toward black-market suppliers. 
D) lower prices being offered on the black market.

Question 20

Figure 4-21
  
-Which price in Figure 4-21 is equilibrium?

Accepted Answer

A) P1 
B) P2 
C) P3 
A) P1 
B) P2 
C) P3

If the supply curve for housing has the normal positive slope,rent controls will likely

On a traditional supply and demand diagram,

Which of the following would cause an increase in demand for Toyota automobiles?

Equilibrium is reached where there is no inherent force causing quantity supplied or quantity demanded to change.

Figure 4-23 -In Figure 4-23,which movement will be caused by changes in income?

What is the economic reasoning behind the proposal to legalize drugs?

Which of the following will tend to occur if price controls are imposed on a product?

Figure 4-12 -The silverware industry has been in serious decline since the 1980s.Family dining habits are less formal so people purchase less silverware.Also,in 2006-2008,the price of silver increased from $5 to $20 per ounce.Which graph in Figure 4-12 best illustrates these developments?

Figure 4-3 -A 1985 Harvard study showed that the price of cigarettes does not affect how much an individual smokes but whether he smokes.If this is correct,which graph in Figure 4-3 shows the typical individual's demand curve for cigarettes?

The demand curve for a good connects points describing how much consumers

Show graphically the effect of technological advance on the price of music downloads.In a separate graph show what happens to the price of CDs as a secondary effect of the new download technology.

Distinguish between demand and quantity demanded.Do the same for supply and quantity supplied.

When there is an increase in demand,

How will a decrease in price tend to affect supply?

The imposition of price ceilings on a market often results in

Figure 4-21 -Which price in Figure 4-21 is equilibrium?

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production,Inputs,and Cost: Building Blocks for Supply Analysis

Output,Price,and Profit: The Importance of Marginal Analysis

Securities: Business Finance,and the Economy: The Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: the Price System

The Shortcomings of Free Markets

The Markets Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

International Trade and Comparative Advantage

Filters

Exam 4: Supply and Demand: An Initial Look

If the supply curve for housing has the normal positive slope,rent controls will likely

On a traditional supply and demand diagram,

Which of the following would cause an increase in demand for Toyota automobiles?

Equilibrium is reached where there is no inherent force causing quantity supplied or quantity demanded to change.

Figure 4-23 -In Figure 4-23,which movement will be caused by changes in income?

What is the economic reasoning behind the proposal to legalize drugs?

Which of the following will tend to occur if price controls are imposed on a product?

Figure 4-12 -The silverware industry has been in serious decline since the 1980s.Family dining habits are less formal so people purchase less silverware.Also,in 2006-2008,the price of silver increased from $5 to $20 per ounce.Which graph in Figure 4-12 best illustrates these developments?

Figure 4-3 -A 1985 Harvard study showed that the price of cigarettes does not affect how much an individual smokes but whether he smokes.If this is correct,which graph in Figure 4-3 shows the typical individual's demand curve for cigarettes?

The demand curve for a good connects points describing how much consumers

Show graphically the effect of technological advance on the price of music downloads.In a separate graph show what happens to the price of CDs as a secondary effect of the new download technology.

Distinguish between demand and quantity demanded.Do the same for supply and quantity supplied.

When there is an increase in demand,

How will a decrease in price tend to affect supply?

The imposition of price ceilings on a market often results in

Figure 4-21 -Which price in Figure 4-21 is equilibrium?

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production,Inputs,and Cost: Building Blocks for Supply Analysis

Output,Price,and Profit: The Importance of Marginal Analysis

Securities: Business Finance,and the Economy: The Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: the Price System

The Shortcomings of Free Markets

The Markets Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

International Trade and Comparative Advantage

Filters