Question 1

Figure 4-27
Panel a)  Panel b) 
   Panel c)  Panel d) 
  
-Refer to Figure 4-27. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

Accepted Answer

A)   Panel a) 
B)   Panel b) 
C)   Panel c) 
D)   Panel d) E) B) and C)
F) A) and D)

Question 2

Figure 4-15 
-Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for beach towels?

Accepted Answer

A)   an increase in the price of beach towels
B)   an expectation by firms that the price of beach towels will increase in the very near future
C)   a decrease in the price of cotton
D)   a decrease in the number of firms selling beach towelsE) All of the above
F) B) and C)

Question 3

If a shortage exists in a market, then we know that the actual price is

Accepted Answer

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

Question 4

Table 4-11
 
-Refer to Table 4-11. If the price were $4, a

Accepted Answer

A)   surplus of 15 units would exist, and price would tend to fall.
B)   shortage of 25 units would exist, and price would tend to rise.
C)   surplus of 25 units would exist, and price would tend to fall.
D)   shortage of 40 units would exist, and price would tend to rise.E) A) and C)
F) All of the above

Question 5

The law of supply states that, other things equal, when the price of a good

Accepted Answer

A)   falls, the supply of the good rises.
B)   rises, the quantity supplied of the good rises.
C)   rises, the supply of the good falls.
D)   falls, the quantity supplied of the good rises.E) B) and C)
F) A) and B)

Question 6

You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut butter

Accepted Answer

A)   will increase but not until the end of the year.
B)   increases today.
C)   decreases as you look for a substitute good.
D)   shifts left today.E) None of the above
F) C) and D)

Question 7

Figure 4-16 
-Refer to Figure 4-16. The shift from S to S' in the market for peaches could be caused by an)

Accepted Answer

A)   increase in the price of peaches.
B)   decrease in the price of pears.
C)   increase in income.
D)   decrease in the labor costs of the workers who pick peaches.E) A) and B)
F) None of the above

Question 8

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

Accepted Answer

A)   a decrease in price.
B)   an increase in the price of a complement.
C)   a technological advance.
D)   an increase in the price of a substitute.E) A) and C)
F) B) and D)

Question 9

Most markets in the economy are highly competitive.

Accepted Answer

A) True 
 B)False

Question 10

Figure 4-1 
-Refer to Figure 4-1. The movement from point A to point B on the graph is caused by an)

Accepted Answer

A)   increase in price.
B)   decrease in price.
C)   decrease in the price of a substitute good.
D)   increase in income.E) A) and B)
F) All of the above

Question 11

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-24. All else equal, the premature deaths of thousands of turkeys would cause a move from

Accepted Answer

A)   DA to DB.
B)   DB to DA.
C)   x to y.
D)   y to x.E) A) and D)
F) B) and C)

Question 12

If the supply of pencils, a substitute for pens, increases, what will happen to the equilibrium price of pencils and to the equilibrium price of pens?

Accepted Answer

The equilibrium pric...

Question 13

Table 4-6
 
-Refer to Table 4-6. If these are the only four sellers in the market, then when the price decreases from $4 to $2, the market quantity supplied

Accepted Answer

A)   increases by 10 units.
B)   decreases by 10 units.
C)   decreases by 20 units.
D)   decreases by 30 units.E) B) and D)
F) A) and D)

Question 14

Which of these statements best represents the law of demand?

Accepted Answer

A)   When buyers' tastes for a good increase, they purchase more of the good.
B)   When income levels increase, buyers purchase more of most goods.
C)   When the price of a good decreases, buyers purchase more of the good.
D)   When buyers' demands for a good increase, the price of the good increases.E) None of the above
F) A) and B)

Question 15

Individual supply curves are summed vertically to obtain the market supply curve.

Accepted Answer

A) True 
 B)False

Question 16

Table 4-15
The following table shows the number of cases of water each seller is willing to sell at the prices listed.
 
-Refer to Table 4-15. Assuming these are the only four suppliers in this market and the function for market demand is QD=1000-100P, where QD is the quantity demanded and P is the price, what is the equilibrium quantity?

Accepted Answer

The answer of Table 4-15
The following table shows the number...

Question 17

A market supply curve shows how the total quantity supplied of a good varies as

Accepted Answer

A)   production technology varies.
B)   price varies.
C)   input prices vary.
D)   demand varies.E) C) and D)
F) A) and D)

Question 18

Figure 4-27
Panel a)  Panel b) 
   Panel c)  Panel d) 
  
-Refer to Figure 4-27. Panel d)  shows which of the following?

Accepted Answer

A)   a decrease in demand and a decrease in quantity supplied
B)   a decrease in demand and a decrease in supply
C)   a decrease in quantity demanded and a decrease in quantity supplied
D)   a decrease in quantity demanded and a decrease in supplyE) B) and C)
F) A) and C)

Question 19

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-24. All else equal, an increase in the productivity of turkey farmers would cause a move from

Accepted Answer

A)   DA to DB.
B)   DB to DA.
C)   x to y.
D)   y to x.E) A) and B)
F) None of the above

Question 20

Suppose that Amanda receives a pay increase. We would expect

Accepted Answer

A)   to observe Amanda moving down and to the right along her given demand curve.
B)   Amanda's demand for inferior goods to decrease.
C)   Amanda's demand for each of two goods that are complements to increase.
D)   Amanda's demand for normal goods to decrease.E) B) and D)
F) B) and C)

Exam 4: The Market Forces of Supply and Demand

The law of supply states that, other things equal, when the price of a good

Correct Answer
verified

If a shortage exists in a market, then we know that the actual price is

Correct Answer
verified

Figure 4-15 -Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for beach towels?

Correct Answer
verified

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

Correct Answer
verified

If the supply of pencils, a substitute for pens, increases, what will happen to the equilibrium price of pencils and to the equilibrium price of pens?

Correct Answer
verified
The equilibrium pric...
View Answer

Table 4-6 -Refer to Table 4-6. If these are the only four sellers in the market, then when the price decreases from $4 to $2, the market quantity supplied

Correct Answer
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Most markets in the economy are highly competitive.

Correct Answer
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Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Panel d) shows which of the following?

Correct Answer
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Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph is caused by an)

Correct Answer
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Individual supply curves are summed vertically to obtain the market supply curve.

Correct Answer
verified

Figure 4-16 -Refer to Figure 4-16. The shift from S to S' in the market for peaches could be caused by an)

Correct Answer
verified

Suppose that Amanda receives a pay increase. We would expect

Correct Answer
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Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, the premature deaths of thousands of turkeys would cause a move from

Correct Answer
verified

Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

Correct Answer
verified

You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut butter

Correct Answer
verified

Which of these statements best represents the law of demand?

Correct Answer
verified

A market supply curve shows how the total quantity supplied of a good varies as

Correct Answer
verified

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, an increase in the productivity of turkey farmers would cause a move from

Correct Answer
verified

Table 4-11 -Refer to Table 4-11. If the price were $4, a

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

The law of supply states that, other things equal, when the price of a good

Correct AnswerverifiedShow Answer

If a shortage exists in a market, then we know that the actual price is

Correct AnswerverifiedShow Answer

Figure 4-15 -Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for beach towels?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the supply of pencils, a substitute for pens, increases, what will happen to the equilibrium price of pencils and to the equilibrium price of pens?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

Table 4-6 -Refer to Table 4-6. If these are the only four sellers in the market, then when the price decreases from $4 to $2, the market quantity supplied

Correct AnswerverifiedShow Answer

Most markets in the economy are highly competitive.

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Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Panel d) shows which of the following?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph is caused by an)

Correct AnswerverifiedShow Answer

Individual supply curves are summed vertically to obtain the market supply curve.

Correct AnswerverifiedShow Answer

Figure 4-16 -Refer to Figure 4-16. The shift from S to S' in the market for peaches could be caused by an)

Correct AnswerverifiedShow Answer

Suppose that Amanda receives a pay increase. We would expect

Correct AnswerverifiedShow Answer

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, the premature deaths of thousands of turkeys would cause a move from

Correct AnswerverifiedShow Answer

Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

Correct AnswerverifiedShow Answer

You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut butter

Correct AnswerverifiedShow Answer

Which of these statements best represents the law of demand?

Correct AnswerverifiedShow Answer

A market supply curve shows how the total quantity supplied of a good varies as

Correct AnswerverifiedShow Answer

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, an increase in the productivity of turkey farmers would cause a move from

Correct AnswerverifiedShow Answer

Table 4-11 -Refer to Table 4-11. If the price were $4, a

Correct AnswerverifiedShow Answer

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The equilibrium pric...
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