Question 1

In markets,prices move toward equilibrium because of

Accepted Answer

A)  the actions of buyers and sellers.
B)  government regulations placed on market participants.
C)  increased competition among sellers.
D)  buyers' ability to affect market outcomes.

Question 2

A decrease in input costs to firms in a market will result in

Accepted Answer

A)  a decrease in equilibrium price and an increase in equilibrium quantity.
B)  a decrease in equilibrium price and a decrease in equilibrium quantity.
C)  an increase in equilibrium price and no change in equilibrium quantity.
D)  an increase in equilibrium price and an increase in equilibrium quantity.

Question 3

A market is a

Accepted Answer

A)  group of buyers and sellers of a particular good or service.
B)  group of people with common economic characteristics.
C)  place where buyers and sellers come together to engage in trade.
D)  place where an auctioneer helps set prices and arrange sales.

Question 4

The side of the market that deals with the willingness and ability to produce and sell is

Accepted Answer

A)  demand.
B)  competition.
C)  supply.
D)  monopoly.

Question 5

An advance in production technology will

Accepted Answer

A)  increase a firm's costs.
B)  allow firms to raise the price of their product.
C)  shift the supply curve to the right, but the demand curve will be unaffected.
D)  shift the supply curve to the right and shift the demand curve to the right.

Question 6

An increase in demand is represented by

Accepted Answer

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

Question 7

Once the demand curve for a product or service is drawn,it

Accepted Answer

A)  can shift either rightward or leftward.
B)  remains stable over time at all possible prices.
C)  is possible to move up or down the curve, but the curve will not shift.
D)  tends to become steeper over time.

Question 8

If excess demand exists in a market we know that the actual price is

Accepted Answer

A)  below equilibrium price and quantity demanded is greater than quantity supplied.
B)  above equilibrium price and quantity demanded is greater than quantity supplied.
C)  above equilibrium price and quantity supplied is greater than quantity demanded.
D)  below equilibrium price and quantity supplied is greater than quantity demanded.

Question 9

For a competitive market,which of the following statements is correct?

Accepted Answer

A)  A seller can always increase her profit by raising the price of her product.
B)  If a seller charges more than the going price, buyers will go elsewhere to make their purchases.
C)  A seller often charges less than the going price to increase sales and profit.
D)  A single buyer can influence the price of the product, but only when purchasing from several sellers in a short period of time.

Question 10

Buyers and sellers who have no influence on market price are referred to as

Accepted Answer

A)  market pawns.
B)  marginalists.
C)  price takers.
D)  price makers.

Question 11

Suppose we are analyzing the market for hot chocolate.Graphically illustrate the impact each of the following would have on demand or supply.Also show how equilibrium price and quantity have changed.
a.Winter starts and the weather turns sharply colder.
b.The price of tea, a substitute for hot chocolate, falls.
c.The price of cocoa beans decreases.
d.The price of whipped cream falls.
e.A better method of harvesting cocoa beans is introduced.
f.The Surgeon General of the U.S.announces that hot chocolate cures acne.
g.Protesting farmers dump millions of gallons of milk, causing the price of milk to rise.
h.Consumer income falls because of a recession and hot chocolate is considered a normal good.
i.Producers expect the price of hot chocolate to increase next month.
j.Currently, the price of hot chocolate is $0.50 per cup above equilibrium

Accepted Answer

The answer of Suppose we are analyzing the market for...

Question 12

A market is a group of buyers and sellers of a particular product.

Accepted Answer

A) True 
 B)False

Question 13

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

Accepted Answer

A)  Price will fall and the effect on quantity is ambiguous.
B)  Price will rise and the effect on quantity is ambiguous.
C)  Quantity will fall and the effect on price is ambiguous.
D)  Quantity will rise and the effect on price is ambiguous.

Question 14

The table shows individual demand schedules for a market.
Table 4-1
 
-Refer to Table 4-1.Whose demand does not conform to the law of demand?

Accepted Answer

A)  Aaron's
B)  Angela's
C)  Austin's
D)  Alyssa's

Question 15

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto-workers negotiate higher wages?

Accepted Answer

A)  Price will fall and the effect on quantity is ambiguous.
B)  Price will rise and the effect on quantity is ambiguous.
C)  Quantity will fall and the effect on price is ambiguous.
D)  Quantity will rise and the effect on price is ambiguous.

Question 16

If a good is normal,then an increase in income will result in

Accepted Answer

A)  an increase in the demand for the good.
B)  a decrease in the demand for the good.
C)  a movement down and to the right along the demand curve for the good.
D)  a movement up and to the left along the demand curve for the good.

Question 17

The forces that make market economies work are

Accepted Answer

A)  work and leisure.
B)  demand and supply.
C)  regulation and restraint.
D)  taxes and government spending.

Question 18

The market demand curve

Accepted Answer

A)  is found by adding vertically the individual demand curves.
B)  slopes upward.
C)  represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good.
D)  represents the sum of the quantities demanded by all the buyers at each price of the good.

Question 19

When it comes to people's tastes,economists generally believe that

Accepted Answer

A)  tastes are based on forces that are well within the realm of economics.
B)  tastes are based on historical and psychological forces.
C)  tastes can only be studied through well-constructed, real-life models.
D)  since tastes do not directly affect demand, there is little need to explain people's tastes.

Question 20

Consider the market for new DVDs.If DVD players became cheaper,buyers expected DVD prices to fall next year,used DVDs became more expensive,and DVD production technology improved,then we could safely conclude that the equilibrium price of a new DVD would

Accepted Answer

A)  rise.
B)  fall.
C)  stay the same.
D)  We couldn't be sure what it might do.

Exam 4: The Market Forces of Supply and Demand

Once the demand curve for a product or service is drawn,it

Correct Answer
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A decrease in input costs to firms in a market will result in

Correct Answer
verified

When it comes to people's tastes,economists generally believe that

Correct Answer
verified

If excess demand exists in a market we know that the actual price is

Correct Answer
verified

Correct Answer
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The table shows individual demand schedules for a market. Table 4-1 -Refer to Table 4-1.Whose demand does not conform to the law of demand?

Correct Answer
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The forces that make market economies work are

Correct Answer
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For a competitive market,which of the following statements is correct?

Correct Answer
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The market demand curve

Correct Answer
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An advance in production technology will

Correct Answer
verified

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto-workers negotiate higher wages?

Correct Answer
verified

If a good is normal,then an increase in income will result in

Correct Answer
verified

A market is a group of buyers and sellers of a particular product.

Correct Answer
verified

Buyers and sellers who have no influence on market price are referred to as

Correct Answer
verified

The side of the market that deals with the willingness and ability to produce and sell is

Correct Answer
verified

An increase in demand is represented by

Correct Answer
verified

A market is a

Correct Answer
verified

In markets,prices move toward equilibrium because of

Correct Answer
verified

Consider the market for new DVDs.If DVD players became cheaper,buyers expected DVD prices to fall next year,used DVDs became more expensive,and DVD production technology improved,then we could safely conclude that the equilibrium price of a new DVD would

Correct Answer
verified

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Once the demand curve for a product or service is drawn,it

Correct AnswerverifiedShow Answer

A decrease in input costs to firms in a market will result in

Correct AnswerverifiedShow Answer

When it comes to people's tastes,economists generally believe that

Correct AnswerverifiedShow Answer

If excess demand exists in a market we know that the actual price is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The table shows individual demand schedules for a market. Table 4-1 -Refer to Table 4-1.Whose demand does not conform to the law of demand?

Correct AnswerverifiedShow Answer

The forces that make market economies work are

Correct AnswerverifiedShow Answer

For a competitive market,which of the following statements is correct?

Correct AnswerverifiedShow Answer

The market demand curve

Correct AnswerverifiedShow Answer

An advance in production technology will

Correct AnswerverifiedShow Answer

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto-workers negotiate higher wages?

Correct AnswerverifiedShow Answer

If a good is normal,then an increase in income will result in

Correct AnswerverifiedShow Answer

A market is a group of buyers and sellers of a particular product.

Correct AnswerverifiedShow Answer

Buyers and sellers who have no influence on market price are referred to as

Correct AnswerverifiedShow Answer

The side of the market that deals with the willingness and ability to produce and sell is

Correct AnswerverifiedShow Answer

An increase in demand is represented by

Correct AnswerverifiedShow Answer

A market is a

Correct AnswerverifiedShow Answer

In markets,prices move toward equilibrium because of

Correct AnswerverifiedShow Answer

Consider the market for new DVDs.If DVD players became cheaper,buyers expected DVD prices to fall next year,used DVDs became more expensive,and DVD production technology improved,then we could safely conclude that the equilibrium price of a new DVD would

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

Correct AnswerverifiedShow Answer

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