Question 1

If a increase in income decreases the demand for a good,then the good is a(n)

Accepted Answer

A)   substitute good.
B)   complementary good.
C)   normal good.
D)   inferior good.E) All of the above
F) B) and C)

Question 2

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices.What would we expect to occur in this market?

Accepted Answer

A)   Equilibrium price would decrease,but the impact on equilibrium quantity would be ambiguous.
B)   Equilibrium price would increase,but the impact on equilibrium quantity would be ambiguous.
C)   Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous.
D)   Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous.E) B) and D)
F) A) and B)

Question 3

Figure 4-22

-Refer to Figure 4-22.Which of the four panels represents the market for cars as a result of the adoption of new technology on assembly lines?

Accepted Answer

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

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Which of the following events must cause equilibrium price 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) All of the above
F) B) and D)

Question 6

The actions of buyers and sellers naturally move markets toward equilibrium.

Accepted Answer

A) True 
 B)False

Question 7

Most studies have found that tobacco and marijuana are complements rather than substitutes.

Accepted Answer

A) True 
 B)False

Question 8

Suppose that demand for a good decreases and,at the same time,supply of the good decreases.What would happen in the market for the good?

Accepted Answer

A)   Equilibrium price would decrease,but the impact on equilibrium quantity would be ambiguous.
B)   Equilibrium price would increase,but the impact on equilibrium quantity would be ambiguous.
C)   Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous.
D)   Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous.E) A) and C)
F) B) and C)

Question 9

A supply schedule is a table that shows the relationship between

Accepted Answer

A)   price and quantity supplied.
B)   input costs and quantity supplied.
C)   quantity demanded and quantity supplied.
D)   profit and quantity supplied.E) A) and B)
F) A) and C)

Question 10

A movement along the demand curve might be caused by a change in

Accepted Answer

A)   income.
B)   the prices of substitutes or complements.
C)   expectations about future prices.
D)   the price of the good or service that is being demanded.E) A) and B)
F) A) and C)

Question 11

Figure 4-17 
-Refer to Figure 4-17.If the price is $10,then there would be a

Accepted Answer

A)   shortage of 400 units,and price would rise.
B)   surplus of 400 units,and price would rise.
C)   shortage of 600 units,and price would rise.
D)   surplus of 600 units,and price would rise.E) A) and B)
F) A) and C)

Question 12

Which of the following is not a characteristic of a perfectly competitive market?

Accepted Answer

A)   Different sellers sell identical products.
B)   There are many sellers.
C)   Sellers must accept the price the market determines.
D)   All of the above are characteristics of a perfectly competitive market.E) A) and B)
F) A) and D)

Question 13

Table 4-5
 
-Refer to Table 4-5.If these are the only four sellers in the market,then when the price decreases from $10 to $8,the market quantity supplied decreases by

Accepted Answer

A)   2.5 units.
B)   4 units.
C)   10 units.
D)   50 units.E) A) and B)
F) B) and D)

Question 14

In competitive markets,

Accepted Answer

A)   firms produce identical products.
B)   no individual buyer can influence the market price.
C)   no individual seller can influence the market price.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 15

Table 4-2
 
-Refer to Table 4-2.If these are the only four buyers in the market,then the market quantity demanded at a price of $8 is

Accepted Answer

A)   4 units.
B)   6 units.
C)   24 units.
D)   32 units.E) None of the above
F) C) and D)

Question 16

A downward-sloping demand curve illustrates

Accepted Answer

A)   that demand decreases over time.
B)   that prices fall over time.
C)   the relationship between income and quantity demanded.
D)   the law of demand.E) None of the above
F) B) and C)

Question 17

Figure 4-1 
-"Other things equal,when the price of a good rises,the quantity demanded of the good falls,and when the price falls,the quantity demanded rises." This relationship between price and quantity demanded

Accepted Answer

A)   applies to most goods in the economy.
B)   is represented by a downward-sloping demand curve.
C)   is referred to as the law of demand.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 18

Figure 4-19
The diagram below pertains to the demand for turkey in the United States. A to DB. B)  DB to DA. C)  x to y. D)  y to x." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-19.All else equal,a decrease in the price of the grain fed to 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) A) and C)

Question 19

If a firm is a price taker,it operates in a

Accepted Answer

A)   competitive market.
B)   monopoly market.
C)   oligopoly market.
D)   monopolistically competitive market.E) B) and C)
F) B) and D)

Question 20

An example of a perfectly competitive market would be the market for

Accepted Answer

A)   tennis racquets.
B)   pizza.
C)   garbage collection.
D)   wheat.E) A) and D)
F) A) and C)

Exam 4: The Market Forces of Supply and Demand

If a firm is a price taker,it operates in a

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A supply schedule is a table that shows the relationship between

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In competitive markets,

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

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Figure 4-1 -"Other things equal,when the price of a good rises,the quantity demanded of the good falls,and when the price falls,the quantity demanded rises." This relationship between price and quantity demanded

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Which of the following is not a characteristic of a perfectly competitive market?

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An example of a perfectly competitive market would be the market for

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Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices.What would we expect to occur in this market?

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Figure 4-17 -Refer to Figure 4-17.If the price is $10,then there would be a

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Figure 4-19 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-19.All else equal,a decrease in the price of the grain fed to turkeys would cause a move from

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A movement along the demand curve might be caused by a change in

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Table 4-2 -Refer to Table 4-2.If these are the only four buyers in the market,then the market quantity demanded at a price of $8 is

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Table 4-5 -Refer to Table 4-5.If these are the only four sellers in the market,then when the price decreases from $10 to $8,the market quantity supplied decreases by

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Figure 4-22 -Refer to Figure 4-22.Which of the four panels represents the market for cars as a result of the adoption of new technology on assembly lines?

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Most studies have found that tobacco and marijuana are complements rather than substitutes.

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If a increase in income decreases the demand for a good,then the good is a(n)

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The actions of buyers and sellers naturally move markets toward equilibrium.

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Suppose that demand for a good decreases and,at the same time,supply of the good decreases.What would happen in the market for the good?

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

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A downward-sloping demand curve illustrates

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