Question 1

Demand for which of the following goods will fall as income rises?

Accepted Answer

A)  handbags
B)  second-hand clothing
C)  donuts
D)  bus ticketsE) A) and B)
F) A) and C)

Question 2

A market where there is only one seller is called a:

Accepted Answer

A)  monopoly market
B)  competitive market
C)  regulated market
D)  wheat marketE) A) and D)
F) B) and C)

Question 3

The quantity demanded of a product is positively related to the price.

Accepted Answer

A) True 
 B)False

Question 4

If mad cow disease causes a beef-scare in Europe, demand for wild meat like deer or kangaroo is likely to shift to the right in that market.

Accepted Answer

A) True 
 B)False

Question 5

When large areas of the US Pacific North-West were protected from logging in 1990 (to conserve spotted owl habitat), this is likely to have caused the equilibrium price of logs to increase and the equilibrium quantity of logs sold to decrease.

Accepted Answer

A) True 
 B)False

Question 6

Suppose a drought reduces the production of brussels sprouts in Australia, but simultaneously a new study finds that they have cancer-curing properties.One would expect:

Accepted Answer

A)  the price of brussels sprouts to increase
B)  the price of brussels sprouts to decrease
C)  the price of brussels sprouts to remain the same
D)  the price of brussels sprouts to drop slightly, then increaseE) All of the above
F) None of the above

Question 7

Suppose that a decrease in the price of X results in more of good Y sold.This would mean that X and Y are:

Accepted Answer

A)  complementary goods
B)  substitute goods
C)  unrelated goods
D)  normal goodsE) All of the above
F) B) and D)

Question 8

Given the following demand schedule, graph Lee's weekly demand curve for coffee. $\begin{array}{|c|c|}
\hline \text { Price of Coffee (\$) } & \text { Cups of Coffee } \
\hline 5.00 & 0 \
\hline 4.00 & 4 \
\hline 3.00 & 8 \
\hline 2.00 & 12 \
\hline 1.00 & 16 \
\hline .00 & 20 \
\hline
\end{array}$

Accepted Answer

The answer of Given the following demand schedule, graph Lee's...

Question 9

An increase in the price of a product will reduce the amount of it purchased because:

Accepted Answer

A)  supply curves are up sloping
B)  the higher price means that real incomes have risen
C)  consumers will substitute other products for the one where price has risen
D)  consumers substitute relatively high-priced products for relatively low-priced productsE) B) and D)
F) A) and D)

Question 10

Suppose at the current price of sugar, sugar suppliers have a surplus.This must mean that:

Accepted Answer

A)  the price of sugar is currently higher than the equilibrium price
B)  the price of sugar is currently lower than the equilibrium price
C)  less sugar is being produced by sellers than buyers want to buy
D)  the demand for sugar has fallenE) C) and D)
F) All of the above

Question 11

The market-clearing price will always be lower than the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 12

In addition to price, the determinants of individual supply include input prices, technology and expectations.

Accepted Answer

A) True 
 B)False

Question 13

In a monopoly market, equilibrium is always achieved.

Accepted Answer

A) True 
 B)False

Question 14

For each of the following situations in the wheat market, determine whether the quantity demanded changes, or the demand curve shifts and determine the direction of the change.
a.consumer income increases
b.the price of wheat increases
c.scientists determine that eating wheat causes high blood pressure
d.the price of oats increases
e.in June, insects destroy part of the country's wheat crop

Accepted Answer

a.An increase in consumer income will ca...

Question 15

If sellers are price makers, then individually:

Accepted Answer

A)  their production decisions can affect the market price
B)  their production decisions do not determine the market price
C)  their production decisions have no effect on the market price
D)  people will not buy their product whatever price they setE) B) and D)
F) B) and C)

Question 16

A market demand is:

Accepted Answer

A)  a vertical summation of individual demand curves
B)  a horizontal summation of individual demand curves
C)  not responsive to change in tastes and preferences
D)  determined solely by the number of buyers and sellers in the marketE) A) and C)
F) All of the above

Question 17

If demand increases and supply simultaneously decreases, equilibrium price will rise.

Accepted Answer

A) True 
 B)False

Question 18

A market with many sellers offering slightly different products is called a monopoly.

Accepted Answer

A) True 
 B)False

Question 19

A demand curve is:

Accepted Answer

A)  the upward-sloping line relating the price of the good with the quantity demanded
B)  the upward-sloping line relating price with quantity supplied
C)  the downward-sloping line relating the price of the good with the quantity demanded
D)  the downward-sloping line relating price with quantity suppliedE) A) and B)
F) A) and C)

Question 20

Suppose that the number of buyers in a market increases and expectations of the price of the good indicate that its price will rise in the future.What would we expect to happen in the market?

Accepted Answer

A)  the equilibrium price would increase but the impact on the amount sold in the market would be ambiguous
B)  the equilibrium price would decrease but the impact on the amount sold in the market would be ambiguous
C)  both equilibrium price and equilibrium quantity would increase
D)  equilibrium quantity would increase but the impact on equilibrium price would be ambiguousE) A) and B)
F) C) and D)

Exam 4: The Market Forces of Supply and Demand

If sellers are price makers, then individually:

Correct Answer
verified

When large areas of the US Pacific North-West were protected from logging in 1990 (to conserve spotted owl habitat), this is likely to have caused the equilibrium price of logs to increase and the equilibrium quantity of logs sold to decrease.

Correct Answer
verified

Suppose at the current price of sugar, sugar suppliers have a surplus.This must mean that:

Correct Answer
verified

A market where there is only one seller is called a:

Correct Answer
verified

Demand for which of the following goods will fall as income rises?

Correct Answer
verified

Suppose that a decrease in the price of X results in more of good Y sold.This would mean that X and Y are:

Correct Answer
verified

An increase in the price of a product will reduce the amount of it purchased because:

Correct Answer
verified

A market demand is:

Correct Answer
verified

A demand curve is:

Correct Answer
verified

If demand increases and supply simultaneously decreases, equilibrium price will rise.

Correct Answer
verified

The market-clearing price will always be lower than the equilibrium price.

Correct Answer
verified

A market with many sellers offering slightly different products is called a monopoly.

Correct Answer
verified

Given the following demand schedule, graph Lee's weekly demand curve for coffee. $\begin{array}{|c|c|}\hline \text { Price of Coffee (\$) } & \text { Cups of Coffee } \\\hline 5.00 & 0 \\\hline 4.00 & 4 \\\hline 3.00 & 8 \\\hline 2.00 & 12 \\\hline 1.00 & 16 \\\hline .00 & 20 \\\hline\end{array}$

Correct Answer
verified

In a monopoly market, equilibrium is always achieved.

Correct Answer
verified

In addition to price, the determinants of individual supply include input prices, technology and expectations.

Correct Answer
verified

Suppose that the number of buyers in a market increases and expectations of the price of the good indicate that its price will rise in the future.What would we expect to happen in the market?

Correct Answer
verified

Correct Answer
verified
a.An increase in consumer income will ca...
View Answer

Suppose a drought reduces the production of brussels sprouts in Australia, but simultaneously a new study finds that they have cancer-curing properties.One would expect:

Correct Answer
verified

If mad cow disease causes a beef-scare in Europe, demand for wild meat like deer or kangaroo is likely to shift to the right in that market.

Correct Answer
verified

The quantity demanded of a product is positively related to the price.

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

If sellers are price makers, then individually:

Correct AnswerverifiedShow Answer

When large areas of the US Pacific North-West were protected from logging in 1990 (to conserve spotted owl habitat), this is likely to have caused the equilibrium price of logs to increase and the equilibrium quantity of logs sold to decrease.

Correct AnswerverifiedShow Answer

Suppose at the current price of sugar, sugar suppliers have a surplus.This must mean that:

Correct AnswerverifiedShow Answer

A market where there is only one seller is called a:

Correct AnswerverifiedShow Answer

Demand for which of the following goods will fall as income rises?

Correct AnswerverifiedShow Answer

Suppose that a decrease in the price of X results in more of good Y sold.This would mean that X and Y are:

Correct AnswerverifiedShow Answer

An increase in the price of a product will reduce the amount of it purchased because:

Correct AnswerverifiedShow Answer

A market demand is:

Correct AnswerverifiedShow Answer

A demand curve is:

Correct AnswerverifiedShow Answer

If demand increases and supply simultaneously decreases, equilibrium price will rise.

Correct AnswerverifiedShow Answer

The market-clearing price will always be lower than the equilibrium price.

Correct AnswerverifiedShow Answer

A market with many sellers offering slightly different products is called a monopoly.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In a monopoly market, equilibrium is always achieved.

Correct AnswerverifiedShow Answer

In addition to price, the determinants of individual supply include input prices, technology and expectations.

Correct AnswerverifiedShow Answer

Suppose that the number of buyers in a market increases and expectations of the price of the good indicate that its price will rise in the future.What would we expect to happen in the market?

Correct AnswerverifiedShow Answer

Correct Answerverifieda.An increase in consumer income will ca...View AnswerShow Answer

Suppose a drought reduces the production of brussels sprouts in Australia, but simultaneously a new study finds that they have cancer-curing properties.One would expect:

Correct AnswerverifiedShow Answer

If mad cow disease causes a beef-scare in Europe, demand for wild meat like deer or kangaroo is likely to shift to the right in that market.

Correct AnswerverifiedShow Answer

The quantity demanded of a product is positively related to the price.

Correct AnswerverifiedShow Answer

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a.An increase in consumer income will ca...
View Answer

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Correct Answer
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Correct Answer
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