Question 1

Which of the following is true of a demand curve?

Accepted Answer

A)   It must remain stable over time.
B)   It can shift either rightward or leftward.
C)   It is possible to move along the curve, but the demand curve will not shift.
D)   None of the above are true.

Question 2

All of the following would shift a product's demand curve except a(n) :

Accepted Answer

A)   increase in the price of the product.
B)   decrease in consumer income.
C)   increase in the price of a substitute.
D)   increase in the price of a complement.

Question 3

Either an increase in the number of buyers or an increase in tastes or preferences for a good or service will increase the market demand for that good or service.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following explains why the quantity of a good demanded decreases when its price increases?

Accepted Answer

A)   Consumer preferences change when the price of a good changes.
B)   The nominal income of consumers falls when the price of a good increases.
C)   Substitutes become relatively cheaper when the price of a good increases.
D)   Complements become relatively cheaper when the price of a good increases.

Question 5

Sellers who were originally willing to supply 800 units of a good at $4 per unit are now willing to supply 800 units at $3 per unit.That change would be described as:

Accepted Answer

A)   an increase in supply.
B)   a decrease in supply.
C)   an increase in quantity supplied.
D)   a decrease in quantity supplied.

Question 6

Each of the following is a determinant of demand except

Accepted Answer

A)   tastes.
B)   production technology.
C)   expectations.
D)   the prices of related goods.

Question 7

Other things constant,an increase in the price of beef will:

Accepted Answer

A)   encourage consumers to buy more beef.
B)   discourage consumers from buying as much beef.
C)   shift the demand curve for beef to the right.
D)   shift the demand curve for beef to the left.

Question 8

Suppose the price of gasoline and other petroleum products decline sharply.Which of the following will most likely occur as a result of the lower petroleum prices?

Accepted Answer

A)   an increase in demand for solar heating systems
B)   an increase in demand for larger, more powerful automobiles
C)   an increase in demand for home insulation products
D)   an increase in demand for gasoline

Question 9

Exhibit 4-4  Refer to Exhibit 4-4.A change from Point A to Point D represents a(n) :

Accepted Answer

A)   increase in demand.
B)   decrease in demand.
C)   decrease in quantity demanded.
D)   increase in quantity demanded.

Question 10

Two goods are substitutes when a decrease in the price of one good

Accepted Answer

A)   decreases the demand for the other good.
B)   decreases the quantity demanded of the other good.
C)   increases the demand for the other good.
D)   increases the quantity demanded of the other good.

Question 11

Assuming that coffee and tea are substitutes,a decrease in the price of coffee will result in

Accepted Answer

A)   A leftward shift in the demand for tea.
B)   A downward movement along the demand curve for tea.
C)   A rightward shift in the demand for tea.
D)   An upward movement along the demand curve for tea.

Question 12

Which of the following is true?

Accepted Answer

A)   According to the law of supply, the higher the price of the good, the greater the quantity supplied.
B)   An individual supply curve is a graphical representation that shows the negative relationship between the price and the quantity an individual is willing and able to supply.
C)   The market supply curve is the vertical summation of the individual firm supply curves.
D)   An increase in supply is illustrated by an upward shift in the supply curve.

Question 13

Which of the following reflects the law of supply?

Accepted Answer

A)   
B)   
C)   
D)

Question 14

Which of the following is the correct way to describe equilibrium in a market?

Accepted Answer

A)   At equilibrium, demand equals supply.
B)   At equilibrium, quantity demanded equals quantity supplied.
C)   At equilibrium, market forces no longer apply.
D)   At equilibrium, the "fairest" price for output is achieved.

Question 15

Which of the following would not cause a change in the supply of milk?

Accepted Answer

A)   an increase in government subsidies to dairy farmers
B)   an increase in the price of milk
C)   the discovery of growth hormones to stimulate the milk production of cows
D)   an increase in the cost of feed for cows

Question 16

Either technological progress or cost increasing new government regulations will increase supply.

Accepted Answer

A) True 
 B)False

Question 17

Downward shifts are

Accepted Answer

A)   increases in both demand and supply.
B)   decreases in both demand and supply.
C)   increases in demand and decreases in supply.
D)   increases in supply and decreases in demand.

Question 18

A supply schedule shows:

Accepted Answer

A)   projected sales as ad spending varies.
B)   how many units producers are willing and able to sell at various prices.
C)   possible combinations of output as input prices vary.
D)   how many units consumers would like to buy at various prices.

Question 19

Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus.Last week Antonio's supplier of pepperoni informed him of a 25% increase in price.Which variable determining the position of the supply curve has changed and what effect does it have on supply?

Accepted Answer

A)   future expectations; supply decreases
B)   future expectations; supply increases
C)   input prices; supply decreases
D)   input prices; supply increases

Question 20

Skateboards International of Long Beach,California,was able to sell 20,000 skateboards at a price of $60 in 2008.In 2009,it is able to sell only 12,000 of the same skateboards at a price of $60.Evidently,Skateboard International has experienced a(n) :

Accepted Answer

A)   increase in quantity supplied.
B)   increase in demand.
C)   increase in supply.
D)   decrease in demand.

Exam 4: Demand, Supply, and Market Equilibrium

Skateboards International of Long Beach,California,was able to sell 20,000 skateboards at a price of $60 in 2008.In 2009,it is able to sell only 12,000 of the same skateboards at a price of $60.Evidently,Skateboard International has experienced a(n) :

Correct AnswerverifiedShow Answer

Exhibit 4-4 Refer to Exhibit 4-4.A change from Point A to Point D represents a(n) :

Correct AnswerverifiedShow Answer

Which of the following reflects the law of supply?

Correct AnswerverifiedShow Answer

Downward shifts are

Correct AnswerverifiedShow Answer

Suppose the price of gasoline and other petroleum products decline sharply.Which of the following will most likely occur as a result of the lower petroleum prices?

Correct AnswerverifiedShow Answer

Which of the following explains why the quantity of a good demanded decreases when its price increases?

Correct AnswerverifiedShow Answer

Which of the following is the correct way to describe equilibrium in a market?

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Which of the following is true?

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Each of the following is a determinant of demand except

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All of the following would shift a product's demand curve except a(n) :

Correct AnswerverifiedShow Answer

Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus.Last week Antonio's supplier of pepperoni informed him of a 25% increase in price.Which variable determining the position of the supply curve has changed and what effect does it have on supply?

Correct AnswerverifiedShow Answer

Assuming that coffee and tea are substitutes,a decrease in the price of coffee will result in

Correct AnswerverifiedShow Answer

Sellers who were originally willing to supply 800 units of a good at $4 per unit are now willing to supply 800 units at $3 per unit.That change would be described as:

Correct AnswerverifiedShow Answer

Which of the following would not cause a change in the supply of milk?

Correct AnswerverifiedShow Answer

Either an increase in the number of buyers or an increase in tastes or preferences for a good or service will increase the market demand for that good or service.

Correct AnswerverifiedShow Answer

Other things constant,an increase in the price of beef will:

Correct AnswerverifiedShow Answer

A supply schedule shows:

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Either technological progress or cost increasing new government regulations will increase supply.

Correct AnswerverifiedShow Answer

Which of the following is true of a demand curve?

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Two goods are substitutes when a decrease in the price of one good

Correct AnswerverifiedShow Answer

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