Question 1

Figure 4-9
Panel a)  Panel b) 
  
-Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel a) , the arrows are consistent with which of the following events?

Accepted Answer

A)   The price of marijuana, a complement to cigarettes, increased.
B)   Mandatory health warnings were placed on cigarette packages.
C)   Several foreign countries banned U.S. cigarettes in their countries.
D)   A tax was placed on cigarettes.E) A) and B)
F) C) and D)

Question 2

When the market price is below the equilibrium price, suppliers are unable to sell all they want to sell.

Accepted Answer

A) True 
 B)False

Question 3

A surplus exists in a market if

Accepted Answer

A)   there is an excess demand for the good.
B)   quantity demanded exceeds quantity supplied.
C)   the current price is above its equilibrium price.
D)   All of the above are correct.E) B) and C)
F) All of the above

Question 4

A decrease in the price of peanut butter will increase both the equilibrium price and quantity in the market for jelly.

Accepted Answer

A) True 
 B)False

Question 5

Suppose Spencer and Kate are the only two demanders of lemonade. Each month, Spencer buys six glasses of lemonade when the price is $1.00 per glass, and he buys four glasses when the price is $1.50 per glass. Each month, Kate buys four glasses of lemonade when the price is $1.00 per glass, and she buys two glasses when the price is $1.50 per glass. Which of the following points is on the market demand curve?

Accepted Answer

A)   B only
B)   B and D only
C)   A and C only
D)   D onlyE) B) and C)
F) None of the above

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next six months. As a result, we can expect the supply of lumber to

Accepted Answer

A)   fall in six months but not now.
B)   increase in six months when the price goes up.
C)   fall now.
D)   increase now to meet as much demand as possible.E) B) and D)
F) All of the above

Question 8

Figure 4-7 
-Refer to Figure 4-7. The movement from Da to Db could be caused by

Accepted Answer

A)   a decrease in price.
B)   a decrease in income, assuming the good is inferior.
C)   buyers expecting the price of the good to fall in the near future.
D)   an increase in the price of a complement.E) A) and B)
F) B) and C)

Question 9

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?

Accepted Answer

A)   Both the equilibrium price and quantity would increase.
B)   Both the equilibrium price and quantity would decrease.
C)   The equilibrium price would increase, and the equilibrium quantity would decrease.
D)   The equilibrium price would decrease, and the equilibrium quantity would increase.E) C) and D)
F) A) and D)

Question 10

Figure 4-29 
-Refer to Figure 4-29. The movement from S1 to S2 is a

Accepted Answer

The answer of Figure 4-29 
-Refer to Figure 4-29. The...

Question 11

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

Accepted Answer

A)   increase in the demand for the good.
B)   decrease in the demand for the good.
C)   movement down and to the right along the demand curve for the good.
D)   movement up and to the left along the demand curve for the good.E) All of the above
F) A) and B)

Question 12

If the supply of tennis balls, a complement to tennis racquets, decreases, what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

Accepted Answer

The equilibrium pric...

Question 13

Matthew bakes apple pies that he sells at the local farmer's market. If the price of apples increases, the

Accepted Answer

A)   supply curve for Matthew's pies will increase.
B)   supply curve for Matthew's pies will decrease.
C)   demand curve for Matthew's pies will increase.
D)   demand curve for Matthew's pies will decrease.E) None of the above
F) B) and C)

Question 14

Sellers respond to a surplus by cutting their prices.

Accepted Answer

A) True 
 B)False

Question 15

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.E) B) and C)
F) C) and D)

Question 16

Which of the following demonstrates the law of supply?

Accepted Answer

A)   When the price of leather belts rose, leather belt sellers increase their quantity supplied of leather belts.
B)   When car production technology improved, car producers increased their supply of cars.
C)   When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters.
D)   When ketchup prices rose, ketchup sellers decreased their quantity supplied of ketchup.E) B) and C)
F) A) and B)

Question 17

If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

Accepted Answer

The demand...

Question 18

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Accepted Answer

A) True 
 B)False

Question 19

What is the difference between a "change in supply" and a "change in quantity supplied?" Graph your answer.
a. For each of the following changes, determine whether there will be a change in quantity supplied or a change in supply.
i. a change in input costs
ii. a change in producer expectations
iii. a change in price
iv. a change in technology
v. a change in the number of sellers

Accepted Answer

a. A change in supply refers to a shift ...

Question 20

Holding the nonprice determinants of demand constant, a change in price would

Accepted Answer

A)   result in either a decrease in demand or an increase in demand.
B)   result in a movement along a stationary demand curve.
C)   result in a shift of supply.
D)   have no effect on the quantity demanded.E) B) and C)
F) C) and D)

Exam 4: The Market Forces of Supply and Demand

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?

Correct Answer
verified

When the market price is below the equilibrium price, suppliers are unable to sell all they want to sell.

Correct Answer
verified

Correct Answer
verified

Figure 4-7 -Refer to Figure 4-7. The movement from Da to Db could be caused by

Correct Answer
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A surplus exists in a market if

Correct Answer
verified

Correct Answer
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a. A change in supply refers to a shift ...
View Answer

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

Correct Answer
verified

Figure 4-9 Panel a) Panel b) -Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel a) , the arrows are consistent with which of the following events?

Correct Answer
verified

If the supply of tennis balls, a complement to tennis racquets, decreases, what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

Correct Answer
verified
The equilibrium pric...
View Answer

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Correct Answer
verified

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

Correct Answer
verified

A decrease in the price of peanut butter will increase both the equilibrium price and quantity in the market for jelly.

Correct Answer
verified

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next six months. As a result, we can expect the supply of lumber to

Correct Answer
verified

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

Correct Answer
verified

Sellers respond to a surplus by cutting their prices.

Correct Answer
verified

If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

Correct Answer
verified
The demand...
View Answer

Which of the following demonstrates the law of supply?

Correct Answer
verified

Holding the nonprice determinants of demand constant, a change in price would

Correct Answer
verified

Figure 4-29 -Refer to Figure 4-29. The movement from S1 to S2 is a

Correct Answer
verified

Matthew bakes apple pies that he sells at the local farmer's market. If the price of apples increases, the

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?

Correct AnswerverifiedShow Answer

When the market price is below the equilibrium price, suppliers are unable to sell all they want to sell.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 4-7 -Refer to Figure 4-7. The movement from Da to Db could be caused by

Correct AnswerverifiedShow Answer

A surplus exists in a market if

Correct AnswerverifiedShow Answer

Correct Answerverifieda. A change in supply refers to a shift ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Figure 4-9 Panel a) Panel b) -Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel a) , the arrows are consistent with which of the following events?

Correct AnswerverifiedShow Answer

If the supply of tennis balls, a complement to tennis racquets, decreases, what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A decrease in the price of peanut butter will increase both the equilibrium price and quantity in the market for jelly.

Correct AnswerverifiedShow Answer

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next six months. As a result, we can expect the supply of lumber to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Sellers respond to a surplus by cutting their prices.

Correct AnswerverifiedShow Answer

If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

Correct AnswerverifiedThe demand...View AnswerShow Answer

Which of the following demonstrates the law of supply?

Correct AnswerverifiedShow Answer

Holding the nonprice determinants of demand constant, a change in price would

Correct AnswerverifiedShow Answer

Figure 4-29 -Refer to Figure 4-29. The movement from S1 to S2 is a

Correct AnswerverifiedShow Answer

Matthew bakes apple pies that he sells at the local farmer's market. If the price of apples increases, the

Correct AnswerverifiedShow Answer

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a. A change in supply refers to a shift ...
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The equilibrium pric...
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The demand...
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