Question 1

An increase in the number of buyers in the market will cause a rightward shift in the demand curve if the good is a normal good.

Accepted Answer

A) True 
 B)False

Question 2

A leftward shift of a product supply curve might be caused by:

Accepted Answer

A)  an improvement in the relevant technique of production
B)  a decline in the prices of needed inputs
C)  an increase in consumer incomes
D)  some firms leaving an industryE) B) and C)
F) A) and D)

Question 3

What is a normal good? Give an example.How is a normal good different from an inferior good?

Accepted Answer

A normal good is a good for which, other...

Question 4

What does the term 'equilibrium' mean when applied to a market?

Accepted Answer

The equilibrium in a market is...

Question 5

The stock market is a monopoly.

Accepted Answer

A) True 
 B)False

Question 6

The computer software industry is an example of a perfectly competitive industry.

Accepted Answer

A) True 
 B)False

Question 7

A supply curve slopes upward because:

Accepted Answer

A)  an increase in input prices increases supply
B)  a decrease in input prices decreases supply
C)  as more is produced, per unit costs of production fall
D)  an increase in price gives producers incentive to supply a larger quantityE) C) and D)
F) None of the above

Question 8

Given the graph shown, what will be the result in the market if the price was $6, or $5 or $4?

Accepted Answer

At a price of $6 there will be...

Question 9

Graph 4-6  quantity supplied D) none of the above is true" class="answers-bank-image d-inline" rel="preload" > 
-Refer to the Graph 4-6.At a price of $15:

Accepted Answer

A)  quantity demanded 
B)  quantity demanded = quantity supplied
C)  quantity demanded > quantity supplied
D)  none of the above is trueE) A) and D)
F) B) and C)

Question 10

The law of supply states that, other things being equal, when the price of a good rises, the quantity supplied of the good falls.

Accepted Answer

A) True 
 B)False

Question 11

Why is the ceteris paribus assumption so important when constructing a demand or supply curve?

Accepted Answer

Ceteris paribus means 'other things equa...

Question 12

Which of the following would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

Accepted Answer

A)  an increase in supply and demand
B)  an increase in supply and a decrease in demand
C)  a decrease in supply and demand
D)  a decrease in supply and an increase in demandE) None of the above
F) B) and C)

Question 13

In a free market, the relationship between price and quantity demanded of a good can be called:

Accepted Answer

A)  supply and demand
B)  the law of demand
C)  the Phillips curve
D)  market demandE) C) and D)
F) B) and D)

Question 14

Which of the following are the words most commonly used by economists?

Accepted Answer

A)  supply and demand
B)  entrepreneurial ability
C)  scarcity and human wants
D)  prices and exchangeE) B) and C)
F) A) and B)

Question 15

When the price is higher than the equilibrium price:

Accepted Answer

A)  suppliers will reduce prices to try to clear the market
B)  suppliers will increase their prices to clear the market
C)  buyers will change their tastes and desire more of the good
D)  more sellers will enter the market as they expect prices to go higherE) A) and D)
F) None of the above

Question 16

The law of demand states that:

Accepted Answer

A)  price and quantity demanded are inversely related
B)  the larger the number of buyers in a market, the lower product price
C)  price and quantity demanded are directly related
D)  consumers will buy more of a given product at high prices than they will at low pricesE) A) and B)
F) None of the above

Question 17

The law of demand states that, other things being equal, when the price of a good rises, the quantity demanded of the good falls.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following would NOT shift the demand curve for a good or service?

Accepted Answer

A)  a change in income
B)  a change in the price of a related good
C)  a change in expectations about the price of the good or service
D)  a change in the price of the good or serviceE) None of the above
F) A) and C)

Question 19

A market with just one seller is said to be a monopoly.

Accepted Answer

A) True 
 B)False

Question 20

Suppose you make jewellery.If the price of gold rises, we would expect you to:

Accepted Answer

A)  be willing and able to produce more jewellery than before at each possible price
B)  be willing and able to produce less jewellery than before at each possible price
C)  face a greater demand for your jewellery
D)  face a weaker demand for your jewelleryE) B) and C)
F) A) and D)

Exam 4: The Market Forces of Supply and Demand

Given the graph shown, what will be the result in the market if the price was $6, or $5 or $4?

Correct AnswerverifiedAt a price of $6 there will be...View AnswerShow Answer

Suppose you make jewellery.If the price of gold rises, we would expect you to:

Correct AnswerverifiedShow Answer

The stock market is a monopoly.

Correct AnswerverifiedShow Answer

The law of demand states that, other things being equal, when the price of a good rises, the quantity demanded of the good falls.

Correct AnswerverifiedShow Answer

An increase in the number of buyers in the market will cause a rightward shift in the demand curve if the good is a normal good.

Correct AnswerverifiedShow Answer

Which of the following would NOT shift the demand curve for a good or service?

Correct AnswerverifiedShow Answer

In a free market, the relationship between price and quantity demanded of a good can be called:

Correct AnswerverifiedShow Answer

The computer software industry is an example of a perfectly competitive industry.

Correct AnswerverifiedShow Answer

Which of the following are the words most commonly used by economists?

Correct AnswerverifiedShow Answer

Graph 4-6 -Refer to the Graph 4-6.At a price of $15:

Correct AnswerverifiedShow Answer

Why is the ceteris paribus assumption so important when constructing a demand or supply curve?

Correct AnswerverifiedCeteris paribus means 'other things equa...View AnswerShow Answer

Which of the following would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

Correct AnswerverifiedShow Answer

A market with just one seller is said to be a monopoly.

Correct AnswerverifiedShow Answer

The law of supply states that, other things being equal, when the price of a good rises, the quantity supplied of the good falls.

Correct AnswerverifiedShow Answer

A leftward shift of a product supply curve might be caused by:

Correct AnswerverifiedShow Answer

When the price is higher than the equilibrium price:

Correct AnswerverifiedShow Answer

What is a normal good? Give an example.How is a normal good different from an inferior good?

Correct AnswerverifiedA normal good is a good for which, other...View AnswerShow Answer

A supply curve slopes upward because:

Correct AnswerverifiedShow Answer

The law of demand states that:

Correct AnswerverifiedShow Answer

What does the term 'equilibrium' mean when applied to a market?

Correct AnswerverifiedThe equilibrium in a market is...View AnswerShow Answer

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At a price of $6 there will be...
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Ceteris paribus means 'other things equa...
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A normal good is a good for which, other...
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The equilibrium in a market is...
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