Question 1

Draw a graph to illustrate the effect of higher gasoline prices on the demand for large SUVs. What is the relationship between gasoline and SUVs?

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> Gasoline and SUVs are complements. When...

Question 2

As the price of a product rises, the demand for the product falls.

Accepted Answer

A) True 
 B)False

Question 3

If consumers have an expectation of a product's price increasing in the near future, they will usually:

Accepted Answer

A)   wait for the new price and compare.
B)   wait to see if the price really increases.
C)   purchase more at the current price.
D)   none of the above

Question 4

1 to D0. B)  D1 to D2. C)  point B to point A. D)  point B to point C." class="answers-bank-image d-inline" rel="preload" > Figure 4.4
-Figure 4.4 illustrates the demand for guitars. A decrease in the demand for guitars is represented by the movement from:

Accepted Answer

A)   D1 to D0.
B)   D1 to D2.
C)   point B to point A.
D)   point B to point C.

Question 5

Suppose that a new study is released stating that consumption of orange juice (a substitute for apple juice)  reduces the risk of cancer and a major freeze destroys half of the country's apple crop. What happens to the price and quantity of apple juice?

Accepted Answer

A)   The price of apple juice falls and the quantity of apple juice falls.
B)   The quantity of apple juice might rise or fall and the price of apple juice rises.
C)   The price of apple juice might rise or fall and the quantity of apple juice falls.
D)   The price of apple juice might rise or fall and the quantity of apple juice rises.

Question 6

Bananas and apples are substitutes. When the price of bananas falls and a technological advancement in apple production occurs at the same time:

Accepted Answer

A)   the equilibrium price of apples rises and the equilibrium quantity of apples falls.
B)   the equilibrium price of apples rises and the equilibrium quantity of apples rises.
C)   the equilibrium price of apples rises and the equilibrium quantity of apples might rise or fall.
D)   the equilibrium price of apples falls and the equilibrium quantity of apples might rise or fall.

Question 7

1 to S2. C)  S1 to S0. D)  point B to point C." class="answers-bank-image d-inline" rel="preload" > Figure 4.5
-Figure 4.5 illustrates the supply of guitars. If firms expect the price of guitars to go up after Christmas, then before Christmas this would most likely cause a movement from:

Accepted Answer

A)   point B to point A.
B)   S1 to S2.
C)   S1 to S0.
D)   point B to point C.

Question 8

Figure 4.7
-If supply decreases in Figure 4.7, then the equilibrium:

Accepted Answer

A)   price and quantity rise.
B)   price rises and quantity falls.
C)   price falls and quantity rises.
D)   price and quantity fall.

Question 9

Two goods are substitutes if an increase in the price of one good leads to an increase in demand for the other.

Accepted Answer

A) True 
 B)False

Question 10

A minimum supply price is defined as:

Accepted Answer

A)   the lowest price at which a product is made available for sale.
B)   the lowest cost to produce a good.
C)   the lowest price at which a product is bought.
D)   the lowest price at which other sellers also want to sell the good.

Question 11

If the government imposes a price ceiling that is below the equilibrium price, then the market will experience:

Accepted Answer

A)   an equilibrium.
B)   a shortage.
C)   an excess supply.
D)   no scarcity.

Question 12

A permanent excess supply of a product is possible when the government sets a minimum price that is _______than the equilibrium price.

Accepted Answer

The answer of A permanent excess supply of a product...

Question 13

A decrease in the tuition (i.e., price)  that a public university charges would result in:

Accepted Answer

A)   an downward movement along the supply curve for college classes.
B)   an upward movement along the supply curve for college classes.
C)   a shift in the supply of college classes to the right.
D)   a shift in the supply of college classes to the left.

Question 14

A normal good is defined as a good for which demand decreases when:

Accepted Answer

A)   income decreases.
B)   the price decreases.
C)   income increases.
D)   the price increases.

Question 15

Suppose that the Surgeon General releases a study suggesting that orange juice consumption reduces the risk of cancer. As a result of the study, we could predict that the demand curve for orange juice will _______ and the equilibrium price will _______.

Accepted Answer

A)   increase; increase
B)   increase; decrease
C)   decrease; decrease
D)   decrease; increase

Question 16

When the quantity of a product demanded by buyers equals the quantity supplied, it is called _______ .

Accepted Answer

The answer of When the quantity of a product demanded...

Question 17

Figure 4.1
-Refer to Figure 4.1 that shows Mary and Tom's individual demand curves for meals per week at Fratelli's Italian Restaurant. Assuming Mary and Tom are the only consumers in the market, what is the market quantity demanded at a price of $15?

Accepted Answer

A)   9
B)   3
C)   2
D)   1

Question 18

If the cost of producing a product goes down, this will cause the equilibrium price of the product to go down and the equilibrium quantity of the product to go up.

Accepted Answer

A) True 
 B)False

Question 19

What is the difference between an "individual demand curve" and a "market demand curve"?

Accepted Answer

An individual demand curve is a curve th...

Question 20

What is the difference between "an increase in supply" and "an increase in quantity supplied" of a good?

Accepted Answer

An increase in supply is caused by an in...

Exam 4: Demand, Supply, and Market Equilibrium

Draw a graph to illustrate the effect of higher gasoline prices on the demand for large SUVs. What is the relationship between gasoline and SUVs?

Correct Answerverified Gasoline and SUVs are complements. When...View AnswerShow Answer

When the quantity of a product demanded by buyers equals the quantity supplied, it is called _______ .

Correct AnswerverifiedShow Answer

A normal good is defined as a good for which demand decreases when:

Correct AnswerverifiedShow Answer

Suppose that a new study is released stating that consumption of orange juice (a substitute for apple juice) reduces the risk of cancer and a major freeze destroys half of the country's apple crop. What happens to the price and quantity of apple juice?

Correct AnswerverifiedShow Answer

If the government imposes a price ceiling that is below the equilibrium price, then the market will experience:

Correct AnswerverifiedShow Answer

Figure 4.4 -Figure 4.4 illustrates the demand for guitars. A decrease in the demand for guitars is represented by the movement from:

Correct AnswerverifiedShow Answer

Bananas and apples are substitutes. When the price of bananas falls and a technological advancement in apple production occurs at the same time:

Correct AnswerverifiedShow Answer

As the price of a product rises, the demand for the product falls.

Correct AnswerverifiedShow Answer

If consumers have an expectation of a product's price increasing in the near future, they will usually:

Correct AnswerverifiedShow Answer

A decrease in the tuition (i.e., price) that a public university charges would result in:

Correct AnswerverifiedShow Answer

Figure 4.5 -Figure 4.5 illustrates the supply of guitars. If firms expect the price of guitars to go up after Christmas, then before Christmas this would most likely cause a movement from:

Correct AnswerverifiedShow Answer

Figure 4.1 -Refer to Figure 4.1 that shows Mary and Tom's individual demand curves for meals per week at Fratelli's Italian Restaurant. Assuming Mary and Tom are the only consumers in the market, what is the market quantity demanded at a price of $15?

Correct AnswerverifiedShow Answer

Figure 4.7 -If supply decreases in Figure 4.7, then the equilibrium:

Correct AnswerverifiedShow Answer

A permanent excess supply of a product is possible when the government sets a minimum price that is _______than the equilibrium price.

Correct AnswerverifiedShow Answer

Two goods are substitutes if an increase in the price of one good leads to an increase in demand for the other.

Correct AnswerverifiedShow Answer

What is the difference between "an increase in supply" and "an increase in quantity supplied" of a good?

Correct AnswerverifiedAn increase in supply is caused by an in...View AnswerShow Answer

A minimum supply price is defined as:

Correct AnswerverifiedShow Answer

Suppose that the Surgeon General releases a study suggesting that orange juice consumption reduces the risk of cancer. As a result of the study, we could predict that the demand curve for orange juice will _______ and the equilibrium price will _______.

Correct AnswerverifiedShow Answer

What is the difference between an "individual demand curve" and a "market demand curve"?

Correct AnswerverifiedAn individual demand curve is a curve th...View AnswerShow Answer

If the cost of producing a product goes down, this will cause the equilibrium price of the product to go down and the equilibrium quantity of the product to go up.

Correct AnswerverifiedShow Answer

Correct Answer
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Gasoline and SUVs are complements. When...
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Correct Answer
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An increase in supply is caused by an in...
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Correct Answer
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Suppose that the Surgeon General releases a study suggesting that orange juice consumption reduces the risk of cancer. As a result of the study, we could predict that the demand curve for orange juice will _ and the equilibrium price will _.

Correct Answer
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Correct Answer
verified
An individual demand curve is a curve th...
View Answer

Correct Answer
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