Question 1

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Accepted Answer

A) True 
 B)False

Question 2

A decrease in supply will cause an increase in price, which will cause a decrease in quantity demanded.

Accepted Answer

A) True 
 B)False

Question 3

Figure 4-1  ​
-Refer to Figure 4-1. The movement from point A to point B on the graph shows

Accepted Answer

A)  a decrease in demand.
B)  an increase in demand.
C)  a decrease in quantity demanded.
D)  an increase in quantity demanded.E) None of the above
F) A) and C)

Question 4

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 5

Figure 4-13
  ​
-Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Which curve(s) shift(s) and in which direction?

Accepted Answer

Supply shi...

Question 6

Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the

Accepted Answer

A)  demand for bicycle assembly workers will increase.
B)  supply of bicycles will shift to the right.
C)  supply of bicycles will shift to the left.
D)  firm must increase output to maintain profit levels.E) A) and C)
F) None of the above

Question 7

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 8

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

Accepted Answer

A)  The number of people who purchase olives decreases.
B)  Consumer income decreases, and olives are a normal good.
C)  The price of pickles decreases, and pickles are a substitute for olives.
D)  The price of olives rises.E) None of the above
F) C) and D)

Question 9

Figure 4-3 b to Da in the market for potato chips could be caused by A) a decrease in the price of potato chips. B) a decrease in income, assuming that potato chips are a normal good. C) an announcement by the FDA that potato chips lower the risk of getting cancer. D) an increase in the price of a popcorn." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-3. The shift from Db to Da in the market for potato chips could be caused by

Accepted Answer

A)  a decrease in the price of potato chips.
B)  a decrease in income, assuming that potato chips are a normal good.
C)  an announcement by the FDA that potato chips lower the risk of getting cancer.
D)  an increase in the price of a popcorn.E) B) and C)
F) A) and D)

Question 10

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Accepted Answer

A) True 
 B)False

Question 11

Figure 4-13
  ​
-Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Explain the change(s) in the equilibrium price and quantity.

Accepted Answer

Equilibrium price de...

Question 12

Does a change in the price in a market result in a shift of the demand curve or in a movement along the demand curve?

Accepted Answer

A movement...

Question 13

Sellers respond to a shortage by cutting their prices.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not held constant in a supply schedule?

Accepted Answer

A)  Production technology
B)  The price of the good
C)  The prices of inputs
D)  ExpectationsE) A) and B)
F) A) and C)

Question 15

Suppose scientists provide evidence that people who drink energy drinks are more likely to have a heart attack than people who do not drink energy drinks. We would expect to see

Accepted Answer

A)  no change in the demand for energy drinks.
B)  a decrease in the demand for energy drinks.
C)  an increase in the demand for energy drinks.
D)  a decrease in the supply of energy drinks.E) C) and D)
F) All of the above

Question 16

A monopoly is a market with one

Accepted Answer

A)  seller, and that seller is a price taker.
B)  seller, and that seller sets the price.
C)  buyer, and that buyer is a price taker.
D)  buyer, and that buyer sets the price.E) B) and C)
F) All of the above

Question 17

Figure 4-5
​
Firm A
Firm B  
-Refer to Figure 4-5. If these are the only two sellers in the market, then the market quantity supplied at a price of $8 is

Accepted Answer

A)  16 units.
B)  12 units.
C)  33 units.
D)  28 units.E) A) and B)
F) A) and C)

Question 18

A surplus is the same as an excess demand.

Accepted Answer

A) True 
 B)False

Question 19

Table 4-4
​
​
  ​
​
-Refer to Table 4-4. If these are the only four sellers in the market, then the market quantity supplied at a price of $4 is

Accepted Answer

A)  10 units.
B)  18 units.
C)  33 units.
D)  28 units.E) All of the above
F) A) and D)

Question 20

Which of the following demonstrates the law of supply?

Accepted Answer

A)  When leather became more expensive, belt producers decreased their supply of belts.
B)  When car production technology improved, car producers increased their supply of cars.
C)  When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters.
D)  When ketchup prices rose, ketchup sellers increased their quantity supplied of ketchup.E) All of the above
F) C) and D)

Exam 4: The Market Forces of Supply and Demand

A decrease in supply will cause an increase in price, which will cause a decrease in quantity demanded.

Correct AnswerverifiedShow Answer

Figure 4-13 ​ -Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Which curve(s) shift(s) and in which direction?

Correct AnswerverifiedSupply shi...View AnswerShow Answer

A monopoly is a market with one

Correct AnswerverifiedShow Answer

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

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

Suppose scientists provide evidence that people who drink energy drinks are more likely to have a heart attack than people who do not drink energy drinks. We would expect to see

Correct AnswerverifiedShow Answer

Figure 4-3 -Refer to Figure 4-3. The shift from Db to Da in the market for potato chips could be caused by

Correct AnswerverifiedShow Answer

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

Correct AnswerverifiedShow Answer

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Correct AnswerverifiedShow Answer

Table 4-4 ​ ​ ​ ​ -Refer to Table 4-4. If these are the only four sellers in the market, then the market quantity supplied at a price of $4 is

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Sellers respond to a shortage by cutting their prices.

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Which of the following demonstrates the law of supply?

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Figure 4-1 ​ -Refer to Figure 4-1. The movement from point A to point B on the graph shows

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Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the

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

Does a change in the price in a market result in a shift of the demand curve or in a movement along the demand curve?

Correct AnswerverifiedA movement...View AnswerShow Answer

Which of the following is not held constant in a supply schedule?

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A surplus is the same as an excess demand.

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Figure 4-13 ​ -Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Explain the change(s) in the equilibrium price and quantity.

Correct AnswerverifiedEquilibrium price de...View AnswerShow Answer

Figure 4-5 ​ Firm A Firm B -Refer to Figure 4-5. If these are the only two sellers in the market, then the market quantity supplied at a price of $8 is

Correct AnswerverifiedShow Answer

Correct Answer
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Figure 4-13 -Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Which curve(s) shift(s) and in which direction?

Correct Answer
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Supply shi...
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The equilibrium pric...
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Figure 4-3 -Refer to Figure 4-3. The shift from D_b to D_a in the market for potato chips could be caused by

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Table 4-4 -Refer to Table 4-4. If these are the only four sellers in the market, then the market quantity supplied at a price of $4 is

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 shows

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A movement...
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Figure 4-13 -Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Explain the change(s) in the equilibrium price and quantity.

Correct Answer
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Equilibrium price de...
View Answer

Figure 4-5 Firm A Firm B -Refer to Figure 4-5. If these are the only two sellers in the market, then the market quantity supplied at a price of $8 is

Correct Answer
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