Question 1

When a surplus exists in a market,sellers

Accepted Answer

A) raise price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated. 
B) raise price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated. 
C) lower price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated. 
D) lower price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated. 
A) raise price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated. 
B) raise price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated. 
C) lower price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated. 
D) lower price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated. C

Question 2

Figure 4-21  
-Refer to Figure 4-21.At a price of $4,there is a

Accepted Answer

A) surplus of 1 unit. 
B) surplus of 3 units. 
C) shortage of 1 unit. 
D) shortage of 3 units. 
A) surplus of 1 unit. 
B) surplus of 3 units. 
C) shortage of 1 unit. 
D) shortage of 3 units. D

Question 3

What will happen to the equilibrium price of new textbooks if more students attend college,paper becomes cheaper,textbook authors accept lower royalties,and fewer used textbooks are sold?

Accepted Answer

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

Question 4

Consider the market for portable air conditioners in equilibrium.A summer of unseasonably cool weather would cause

Accepted Answer

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

Question 5

Figure 4-26  
-Refer to Figure 4-26.Which of the following movements would illustrate the effect in the market for fences of a decrease in the price of wood?

Accepted Answer

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

Question 6

Figure 4-18  
-Refer to Figure 4-18.At the equilibrium price,

Accepted Answer

A) 200 units would be supplied and demanded. 
B) 400 units would be supplied and demanded. 
C) 600 units would be supplied and demanded. 
D) 600 units would be supplied,but only 200 would be demanded. 
A) 200 units would be supplied and demanded. 
B) 400 units would be supplied and demanded. 
C) 600 units would be supplied and demanded. 
D) 600 units would be supplied,but only 200 would be demanded.

Question 7

Figure 4-22  
-Refer to Figure 4-22.At a price of $20,there is a

Accepted Answer

A) surplus of 4 units. 
B) surplus of 8 units. 
C) shortage of 4 units. 
D) shortage of 8 units. 
A) surplus of 4 units. 
B) surplus of 8 units. 
C) shortage of 4 units. 
D) shortage of 8 units.

Question 8

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

Accepted Answer

A) prices at and above the equilibrium price. 
B) prices at and below the equilibrium price. 
C) prices above and below the equilibrium price,but not at the equilibrium price. 
D) the equilibrium price but not above or below the equilibrium price. 
A) prices at and above the equilibrium price. 
B) prices at and below the equilibrium price. 
C) prices above and below the equilibrium price,but not at the equilibrium price. 
D) the equilibrium price but not above or below the equilibrium price.

Question 9

When the price of a good is higher than the equilibrium price,

Accepted Answer

A) a shortage will exist. 
B) buyers desire to purchase more than is produced. 
C) sellers desire to produce and sell more than buyers wish to purchase. 
D) quantity demanded exceeds quantity supplied. 
A) a shortage will exist. 
B) buyers desire to purchase more than is produced. 
C) sellers desire to produce and sell more than buyers wish to purchase. 
D) quantity demanded exceeds quantity supplied.

Question 10

If the supply of a product decreases,then we would expect equilibrium price

Accepted Answer

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

Question 11

Figure 4-24
The diagram below pertains to the demand for turkey in the United States.  
-Refer to Figure 4-24.All else equal,the approach of Thanksgiving would cause a move from

Accepted Answer

A) DA to DB. 
B) DB to DA. 
C) x to y. 
D) y to x. 
A) DA to DB. 
B) DB to DA. 
C) x to y. 
D) y to x.

Question 12

Figure 4-27

-Refer to Figure 4-27.Panel (a)shows which of the following?

Accepted Answer

A) an increase in demand and an increase in quantity supplied 
B) an increase in demand and an increase in supply 
C) an increase in quantity demanded and an increase in quantity supplied 
D) an increase in quantity demanded and an increase in supply 
A) an increase in demand and an increase in quantity supplied 
B) an increase in demand and an increase in supply 
C) an increase in quantity demanded and an increase in quantity supplied 
D) an increase in quantity demanded and an increase in supply

Question 13

Figure 4-17  
-Refer to Figure 4-17.At a price of

Accepted Answer

A) $2,there is a shortage of 6 units. 
B) $5,there is a surplus of 25 units. 
C) $5,there is a shortage of $25. 
D) $7,there is a shortage of 4 units. 
A) $2,there is a shortage of 6 units. 
B) $5,there is a surplus of 25 units. 
C) $5,there is a shortage of $25. 
D) $7,there is a shortage of 4 units.

Question 14

Figure 4-17  
-Refer to Figure 4-17.At a price of

Accepted Answer

A) $8,there is a surplus of 6 units. 
B) $5,there is neither a shortage nor a surplus. 
C) $2,there is a shortage of 6 units. 
D) All of the above are correct. 
A) $8,there is a surplus of 6 units. 
B) $5,there is neither a shortage nor a surplus. 
C) $2,there is a shortage of 6 units. 
D) All of the above are correct.

Question 15

Figure 4-23  
-Refer to Figure 4-23.In this market for watermelons,a severe drought occurs which affects the watermelon crop.The equilibrium price

Accepted Answer

A) increases and the equilibrium quantity decreases. 
B) decreases and the equilibrium quantity is ambiguous. 
C) and quantity both increase. 
D) and quantity both decrease. 
A) increases and the equilibrium quantity decreases. 
B) decreases and the equilibrium quantity is ambiguous. 
C) and quantity both increase. 
D) and quantity both decrease.

Question 16

Which of the following events must result in a lower price in the market for Snickers?

Accepted Answer

A) Demand for Snickers increases,and supply of Snickers decreases. 
B) Demand for Snickers and supply of Snickers both decrease. 
C) Demand for Snickers decreases,and supply of Snickers increases. 
D) Demand for Snickers and supply of Snickers both increase 
A) Demand for Snickers increases,and supply of Snickers decreases. 
B) Demand for Snickers and supply of Snickers both decrease. 
C) Demand for Snickers decreases,and supply of Snickers increases. 
D) Demand for Snickers and supply of Snickers both increase

Question 17

If the supply of a product increases,then we would expect equilibrium price

Accepted Answer

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

Question 18

Figure 4-24
The diagram below pertains to the demand for turkey in the United States.  
-Refer to Figure 4-24.All else equal,a decrease in the price of the grain fed to turkeys would cause a move from

Accepted Answer

A) DA to DB. 
B) DB to DA. 
C) x to y. 
D) y to x. 
A) DA to DB. 
B) DB to DA. 
C) x to y. 
D) y to x.

Question 19

An early frost in the vineyards of Napa Valley would cause a(n)

Accepted Answer

A) increase in the demand for wine,increasing price. 
B) increase in the supply of wine,decreasing price. 
C) decrease in the demand for wine,decreasing price. 
D) decrease in the supply of wine,increasing price. 
A) increase in the demand for wine,increasing price. 
B) increase in the supply of wine,decreasing price. 
C) decrease in the demand for wine,decreasing price. 
D) decrease in the supply of wine,increasing price.

Question 20

Figure 4-23  
-Refer to Figure 4-23.In this market for sunscreen,there is a decrease in the price of zinc oxide,an input into sunscreen,and more producers enter the market.The equilibrium price

Accepted Answer

A) increases and the equilibrium quantity decreases. 
B) decreases and the equilibrium quantity increases. 
C) is ambiguous and the equilibrium quantity increases. 
D) decreases and the equilibrium quantity is ambiguous. 
A) increases and the equilibrium quantity decreases. 
B) decreases and the equilibrium quantity increases. 
C) is ambiguous and the equilibrium quantity increases. 
D) decreases and the equilibrium quantity is ambiguous.

Exam 4: The Market Forces of Supply and Demand: Supply and Demand Together

When a surplus exists in a market,sellers

Figure 4-21 -Refer to Figure 4-21.At a price of $4,there is a

What will happen to the equilibrium price of new textbooks if more students attend college,paper becomes cheaper,textbook authors accept lower royalties,and fewer used textbooks are sold?

Consider the market for portable air conditioners in equilibrium.A summer of unseasonably cool weather would cause

Figure 4-26 -Refer to Figure 4-26.Which of the following movements would illustrate the effect in the market for fences of a decrease in the price of wood?

Figure 4-18 -Refer to Figure 4-18.At the equilibrium price,

Figure 4-22 -Refer to Figure 4-22.At a price of $20,there is a

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

When the price of a good is higher than the equilibrium price,

If the supply of a product decreases,then we would expect equilibrium price

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24.All else equal,the approach of Thanksgiving would cause a move from

Figure 4-27 -Refer to Figure 4-27.Panel (a)shows which of the following?

Figure 4-17 -Refer to Figure 4-17.At a price of

Figure 4-17 -Refer to Figure 4-17.At a price of

Figure 4-23 -Refer to Figure 4-23.In this market for watermelons,a severe drought occurs which affects the watermelon crop.The equilibrium price

Which of the following events must result in a lower price in the market for Snickers?

If the supply of a product increases,then we would expect equilibrium price

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24.All else equal,a decrease in the price of the grain fed to turkeys would cause a move from

An early frost in the vineyards of Napa Valley would cause a(n)

Figure 4-23 -Refer to Figure 4-23.In this market for sunscreen,there is a decrease in the price of zinc oxide,an input into sunscreen,and more producers enter the market.The equilibrium price

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A