Question 1

If suppliers expect the price of their product to fall in the future, then they will

Accepted Answer

A)  decrease supply now.
B)  increase supply now.
C)  decrease supply in the future but not now.
D)  increase supply in the future but not now.

Question 2

A movement along the demand curve might be caused by a change in

Accepted Answer

A)  income.
B)  the prices of substitutes or complements.
C)  expectations about future prices.
D)  the price of the good or service that is being demanded.

Question 3

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

Accepted Answer

A)  Consumers have experienced an increase in income, and beef-production technology has improved.
B)  The price of chicken has risen, and the price of steak sauce has fallen.
C)  New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy.
D)  The demand curve for beef must be positively sloped.

Question 4

Figure 4-20 
-Refer to Figure 4-20. At a price of $20, which of the following statements is not correct?

Accepted Answer

A)  The market is in equilibrium.
B)  Equilibrium price is equal to equilibrium quantity.
C)  There is no pressure for price to change.
D)  The quantity of the good that is bought and sold is 600 units.

Question 5

A decrease in the price of sugar will shift the supply curve for cookies to the right.

Accepted Answer

A) True 
 B)False

Question 6

The supply curve for a good is a line that relates

Accepted Answer

A)  profit and quantity supplied.
B)  quantity supplied and quantity demanded.
C)  price and quantity supplied.
D)  price and profit.

Question 7

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

Accepted Answer

A) True 
 B)False

Question 8

What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future?

Accepted Answer

A)  The demand for gasoline will increase.
B)  The demand for gasoline will decrease.
C)  The demand for gasoline will be unaffected.
D)  The supply of gasoline will increase.

Question 9

A decrease in the price of pizza will shift the supply curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Question 10

An increase in which of the following would shift the supply curve for gasoline to the right?

Accepted Answer

A)  demand for gasoline
B)  price of gasoline
C)  number of producers of gasoline
D)  price of oil, an input into the production of gasoline

Question 11

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

Accepted Answer

A)  the ticket price was above the equilibrium price.
B)  the ticket price was below the equilibrium price.
C)  the ticket price was at the equilibrium price.
D)  nothing about the equilibrium price.

Question 12

Which of the following is an example of a less-than-highly-organized market?

Accepted Answer

A)  the market for U.S. Treasury bonds
B)  the market for corn
C)  the market for soybeans
D)  the market for ice cream

Question 13

An increase in supply is represented by a

Accepted Answer

A)  movement downward and to the left along a supply curve.
B)  movement upward and to the right along a supply curve.
C)  rightward shift of a supply curve.
D)  leftward shift of a supply curve.

Question 14

A market supply curve shows how the total quantity supplied of a good varies as

Accepted Answer

A)  production technology varies.
B)  price varies.
C)  input prices vary.
D)  demand varies.

Question 15

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.

Question 16

Which of the following is not a determinant of demand?

Accepted Answer

A)  the price of a resource that is used to produce the good
B)  the price of a complementary good
C)  the price of the good next month
D)  the price of a substitute good

Question 17

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Accepted Answer

A)  an increase in the price of wool shirts and a decrease in the price of raw cotton
B)  a decrease in the price of wool shirts and a decrease in the price of raw cotton
C)  an increase in the price of wool shirts and an increase in the price of raw cotton
D)  a decrease in the price of wool shirts and an increase in the price of raw cotton

Question 18

In competitive markets,

Accepted Answer

A)  firms produce identical products.
B)  no individual buyer can influence the market price.
C)  no individual seller can influence the market price.
D)  All of the above are correct.

Question 19

Another term for equilibrium price is

Accepted Answer

A)  dynamic price.
B)  market-clearing price.
C)  quantity-defining price.
D)  balance price.

Question 20

Table 4-10
The following table shows the number of cases of water each seller is willing to sell at the prices listed. 
-Refer to Table 4-10. If Alpine Springs and Dew Good are the only two suppliers in this market, by how much does the market quantity supplied change with each $3 increase in price?

Accepted Answer

A)  -200 cases
B)  -100 cases
C)  100 cases
D)  200 cases

Exam 4: The Market Forces of Supply and Demand

A movement along the demand curve might be caused by a change in

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In competitive markets,

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Figure 4-20 -Refer to Figure 4-20. At a price of $20, which of the following statements is not correct?

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A decrease in the price of pizza will shift the supply curve for pizza to the left.

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Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

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An increase in supply is represented by a

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What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future?

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Table 4-10 The following table shows the number of cases of water each seller is willing to sell at the prices listed. -Refer to Table 4-10. If Alpine Springs and Dew Good are the only two suppliers in this market, by how much does the market quantity supplied change with each $3 increase in price?

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The supply curve for a good is a line that relates

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Another term for equilibrium price is

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A market supply curve shows how the total quantity supplied of a good varies as

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If suppliers expect the price of their product to fall in the future, then they will

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Which of the following is an example of a less-than-highly-organized market?

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A decrease in the price of sugar will shift the supply curve for cookies to the right.

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An increase in which of the following would shift the supply curve for gasoline to the right?

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

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When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

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Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

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Which of the following is not a determinant of demand?

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Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

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