Question 1

If new manufacturers enter the computer industry, then, holding all other things constant,

Accepted Answer

A)   each "old" manufacturer must sell fewer computers than before.
B)   some "old" manufacturers must exit the industry.
C)   the equilibrium price of computers must rise.
D)   the equilibrium quantity demanded of computers must rise.

Question 2

Supply can shift due to changes in price.

Accepted Answer

A) True 
 B)False

Question 3

From 2007 to 2008, the Federal Reserve System reduced interest rates, the price that borrowers pay.As a result, economists expected demand for money to

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   be influenced by the interest rate, but with an uncertain effect.

Question 4

Figure 4-8
 
-Women today are having more babies than women did fifteen years ago.The result is that mothers today have trouble finding baby-sitters and are shocked at what they must pay for child care.Which graph in Figure 4-8 best illustrates how the situation has changed?

Accepted Answer

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

Question 5

Why does quantity demanded decrease when price increases?

Accepted Answer

A)   People choose to reduce consumption of the item.
B)   People "drop out" of the market for the item.
C)   People find substitutes for the item.
D)   All of the above are correct.

Question 6

An upward-sloping supply curve shows that

Accepted Answer

A)   buyers are willing to pay more for a scarce product.
B)   suppliers are willing to increase production of their goods if they can receive higher prices for them.
C)   buyers are unaffected by sellers' costs of production.
D)   the price of a product is not influenced by the price buyers are willing to pay.
E)   at higher prices, an envy effect begins to affect the demand curve.

Question 7

Any factor that shifts the demand curve to the left but does not affect the supply curve will lower the equilibrium price and raise the equilibrium quantity.

Accepted Answer

A) True 
 B)False

Question 8

Firms often seek to borrow money to expand their capital stock, and the price they pay for the money is the interest rate.What happens to the quantity of money supplied if the interest rate increases?

Accepted Answer

A)   It increases.
B)   It decreases.
C)   It does not change.
D)   It depends entirely on the interest rate.

Question 9

A minimum wage law may cause unemployment among low-skill workers.

Accepted Answer

A) True 
 B)False

Question 10

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased.As a result, we can expect

Accepted Answer

A)   a decrease in price and no predictable impact on output.
B)   a definite decrease in price and increase in output.
C)   an increase in output with no predictable change in price.
D)   no predictable changes in either price or output.

Question 11

A demand schedule shows

Accepted Answer

A)   the "market potential" for a product.
B)   how much consumers are willing and able to buy at different prices.
C)   possible combinations of output under different conditions.
D)   how much producers would like to sell at different prices.
E)   All of the above are correct.

Question 12

A shift in the demand curve for sailboats resulting from an increase in incomes will lead to

Accepted Answer

A)   higher prices of sailboats.
B)   lower prices of sailboats.
C)   a corresponding shift in the supply curve for sailboats.
D)   lower output of sailboats.
E)   no change in the price of sailboats.

Question 13

A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.

Accepted Answer

A) True 
 B)False

Question 14

Exhibit 4-1
The following are the equations for the supply and demand curves in the market for weezils:
 Demand:
 Qd=20−2P Q_{d}=20-2 P Qd​=20−2P 
Supply:
 Qs=5+3P Q_{s}=5+3 P Qs​=5+3P 
where  Qd Q_{d} Qd​  is the quantity demanded, Qs 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

Question 15

An increase in supply will have what effect on equilibrium price and quantity?

Accepted Answer

A)   Price will increase; quantity will decrease.
B)   Price will decrease; quantity will increase.
C)   Both price and quantity will increase.
D)   Both price and quantity will decrease.

Question 16

Even though prices may change frequently, they can be expected to gravitate toward equilibrium.

Accepted Answer

A) True 
 B)False

Question 17

Suppose that in a free market 2,000 patients purchase an operation to receive an artificial heart at a price of $500,000 per operation.Without the heart, each patient will die.The government decides this price is too high and imposes a maximum price of $200,000.Everything else equal,

Accepted Answer

A)   more patients will now die.
B)   fewer patients will now die.
C)   more patients will now die only if the demand curve is vertical.
D)   more patients will now die only if the demand curve is horizontal.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The price for labor is the wage rate.What happens to the quantity of labor demanded if wages increase?

Accepted Answer

A)   It increases.
B)   It decreases.
C)   It does not change.
D)   The whole demand schedule shifts to the left.

Question 20

"Demand" is a series of quantities demanded, one for each person in the market.

Accepted Answer

A) True 
 B)False

Exam 4: Supply and Demand: An Initial Look

An increase in supply will have what effect on equilibrium price and quantity?

Correct Answer
verified

Firms often seek to borrow money to expand their capital stock, and the price they pay for the money is the interest rate.What happens to the quantity of money supplied if the interest rate increases?

Correct Answer
verified

Even though prices may change frequently, they can be expected to gravitate toward equilibrium.

Correct Answer
verified

If new manufacturers enter the computer industry, then, holding all other things constant,

Correct Answer
verified

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

Correct Answer
verified

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased.As a result, we can expect

Correct Answer
verified

Correct Answer
verified

A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.

Correct Answer
verified

"Demand" is a series of quantities demanded, one for each person in the market.

Correct Answer
verified

A shift in the demand curve for sailboats resulting from an increase in incomes will lead to

Correct Answer
verified

The price for labor is the wage rate.What happens to the quantity of labor demanded if wages increase?

Correct Answer
verified

From 2007 to 2008, the Federal Reserve System reduced interest rates, the price that borrowers pay.As a result, economists expected demand for money to

Correct Answer
verified

Suppose that in a free market 2,000 patients purchase an operation to receive an artificial heart at a price of $500,000 per operation.Without the heart, each patient will die.The government decides this price is too high and imposes a maximum price of $200,000.Everything else equal,

Correct Answer
verified

Supply can shift due to changes in price.

Correct Answer
verified

An upward-sloping supply curve shows that

Correct Answer
verified

A demand schedule shows

Correct Answer
verified

Figure 4-8 -Women today are having more babies than women did fifteen years ago.The result is that mothers today have trouble finding baby-sitters and are shocked at what they must pay for child care.Which graph in Figure 4-8 best illustrates how the situation has changed?

Correct Answer
verified

Why does quantity demanded decrease when price increases?

Correct Answer
verified

Any factor that shifts the demand curve to the left but does not affect the supply curve will lower the equilibrium price and raise the equilibrium quantity.

Correct Answer
verified

A minimum wage law may cause unemployment among low-skill workers.

Correct Answer
verified

Exam 4: Supply and Demand: An Initial Look

An increase in supply will have what effect on equilibrium price and quantity?

Correct AnswerverifiedShow Answer

Firms often seek to borrow money to expand their capital stock, and the price they pay for the money is the interest rate.What happens to the quantity of money supplied if the interest rate increases?

Correct AnswerverifiedShow Answer

Even though prices may change frequently, they can be expected to gravitate toward equilibrium.

Correct AnswerverifiedShow Answer

If new manufacturers enter the computer industry, then, holding all other things constant,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased.As a result, we can expect

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.

Correct AnswerverifiedShow Answer

"Demand" is a series of quantities demanded, one for each person in the market.

Correct AnswerverifiedShow Answer

A shift in the demand curve for sailboats resulting from an increase in incomes will lead to

Correct AnswerverifiedShow Answer

The price for labor is the wage rate.What happens to the quantity of labor demanded if wages increase?

Correct AnswerverifiedShow Answer

From 2007 to 2008, the Federal Reserve System reduced interest rates, the price that borrowers pay.As a result, economists expected demand for money to

Correct AnswerverifiedShow Answer

Suppose that in a free market 2,000 patients purchase an operation to receive an artificial heart at a price of $500,000 per operation.Without the heart, each patient will die.The government decides this price is too high and imposes a maximum price of $200,000.Everything else equal,

Correct AnswerverifiedShow Answer

Supply can shift due to changes in price.

Correct AnswerverifiedShow Answer

An upward-sloping supply curve shows that

Correct AnswerverifiedShow Answer

A demand schedule shows

Correct AnswerverifiedShow Answer

Figure 4-8 -Women today are having more babies than women did fifteen years ago.The result is that mothers today have trouble finding baby-sitters and are shocked at what they must pay for child care.Which graph in Figure 4-8 best illustrates how the situation has changed?

Correct AnswerverifiedShow Answer

Why does quantity demanded decrease when price increases?

Correct AnswerverifiedShow Answer

Any factor that shifts the demand curve to the left but does not affect the supply curve will lower the equilibrium price and raise the equilibrium quantity.

Correct AnswerverifiedShow Answer

A minimum wage law may cause unemployment among low-skill workers.

Correct AnswerverifiedShow Answer

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