Question 1

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Most studies indicate that tobacco and marijuana tend to be

Accepted Answer

A)   substitutes.
B)   complements.
C)   unrelated because one good is legal while the other one is illegal.
D)   inferior goods.E) A) and D)
F) All of the above

Question 4

Figure 4-23 
-Refer to Figure 4-23. In this market for sunscreen, there is a decrease in the price of zinc oxide, an input into sunscreen, and more producers enter the market. The equilibrium price

Accepted Answer

A)   increases and the equilibrium quantity decreases.
B)   decreases and the equilibrium quantity increases.
C)   is ambiguous and the equilibrium quantity increases.
D)   decreases and the equilibrium quantity is ambiguous.E) None of the above
F) B) and C)

Question 5

Which of the following events must cause equilibrium quantity to fall?

Accepted Answer

A)   demand increases and supply decreases
B)   demand and supply both decrease
C)   demand decreases and supply increases
D)   demand and supply both increaseE) B) and D)
F) B) and C)

Question 6

Figure 4-26 
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for doctor's visits of an increase in the number of medical students graduating from medical school and successfully completing their residency programs?

Accepted Answer

A)   Point A to Point B
B)   Point C to Point B
C)   Point C to Point D
D)   Point A to Point DE) None of the above
F) All of the above

Question 7

In a market economy, who or what determines who produces each good and how much is produced?

Accepted Answer

A)   the government
B)   lawyers
C)   lotteries
D)   pricesE) A) and B)
F) None of the above

Question 8

Which of the following events would cause a movement upward and to the right along the supply curve for mangos?

Accepted Answer

A)   The number of sellers of mangos increases.
B)   There is an advance in technology that reduces the cost of producing mangos.
C)   The price of fertilizer decreases, and fertilizer is an input in the production of mangos.
D)   The price of mangos rises.E) A) and B)
F) All of the above

Question 9

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

Accepted Answer

A)   $2, there is a shortage of 6 units.
B)   $5, there is a surplus of 25 units.
C)   $5, there is a shortage of $25.
D)   $7, there is a shortage of 4 units.E) B) and D)
F) None of the above

Question 10

Figure 4-22 
-Refer to Figure 4-22. What is the equilibrium price in this market?

Accepted Answer

A)   $8
B)   $12
C)   $16
D)   $20E) B) and C)
F) A) and D)

Question 11

In a perfectly competitive market, buyers and sellers are price setters.

Accepted Answer

A) True 
 B)False

Question 12

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.E) A) and C)
F) All of the above

Question 13

A decrease in demand is represented by a

Accepted Answer

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

Question 14

Which of the following would shift the demand curve for gasoline to the right?

Accepted Answer

A)   a decrease in the price of gasoline
B)   an increase in consumer income, assuming gasoline is a normal good
C)   an increase in the price of cars, a complement for gasoline
D)   a decrease in the expected future price of gasolineE) All of the above
F) B) and D)

Question 15

The dictionary defines equilibrium as a situation in which forces

Accepted Answer

A)   are in balance.
B)   are the same.
C)   clash.
D)   remain constant.E) A) and B)
F) C) and D)

Question 16

Today's supply curve for iPods could shift in response to a change in

Accepted Answer

A)   today's price of iPods.
B)   the expected future price of iPods.
C)   the number of buyers of iPods.
D)   All of the above are correct.E) B) and D)
F) A) and D)

Question 17

An increase in the price of blue pens will increase both the equilibrium price and quantity in the market for black pens.

Accepted Answer

A) True 
 B)False

Question 18

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.E) B) and D)
F) A) and D)

Question 19

An increase in demand shifts the demand curve to the left.

Accepted Answer

A) True 
 B)False

Question 20

Figure 4-7 
-Refer to Figure 4-7. If the demand curve for Good X shifts from Db to Da, then

Accepted Answer

A)   firms would be willing to supply more of Good X than before at each possible price.
B)   people are willing to buy less of Good X than before at each possible price.
C)   people's incomes must have increased.
D)   the price of Good X has increased.E) A) and B)
F) B) and D)

Exam 4: The Market Forces of Supply and Demand

Which of the following would shift the demand curve for gasoline to the right?

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Figure 4-22 -Refer to Figure 4-22. What is the equilibrium price in this market?

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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?

Correct AnswerverifiedShow Answer

Today's supply curve for iPods could shift in response to a change in

Correct AnswerverifiedShow Answer

An increase in the price of blue pens will increase both the equilibrium price and quantity in the market for black pens.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The dictionary defines equilibrium as a situation in which forces

Correct AnswerverifiedShow Answer

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for doctor's visits of an increase in the number of medical students graduating from medical school and successfully completing their residency programs?

Correct AnswerverifiedShow Answer

In a perfectly competitive market, buyers and sellers are price setters.

Correct AnswerverifiedShow Answer

An increase in demand shifts the demand curve to the left.

Correct AnswerverifiedShow Answer

Figure 4-23 -Refer to Figure 4-23. In this market for sunscreen, there is a decrease in the price of zinc oxide, an input into sunscreen, and more producers enter the market. The equilibrium price

Correct AnswerverifiedShow Answer

Which of the following events must cause equilibrium quantity to fall?

Correct AnswerverifiedShow Answer

Which of the following events would cause a movement upward and to the right along the supply curve for mangos?

Correct AnswerverifiedShow Answer

A decrease in demand is represented by a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 4-7 -Refer to Figure 4-7. If the demand curve for Good X shifts from Db to Da, then

Correct AnswerverifiedShow Answer

In markets, prices move toward equilibrium because of

Correct AnswerverifiedShow Answer

Most studies indicate that tobacco and marijuana tend to be

Correct AnswerverifiedShow Answer

In a market economy, who or what determines who produces each good and how much is produced?

Correct AnswerverifiedShow Answer

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Correct AnswerverifiedShow Answer

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