Question 1

Figure 4-23 
-Refer to Figure 4-23. In this market for sunscreen, there is a decrease in the price of zinc oxide, an input into sunscreen, and more producers enter the market. The equilibrium price

Accepted Answer

A)   increases and the equilibrium quantity decreases.
B)   decreases and the equilibrium quantity increases.
C)   is ambiguous and the equilibrium quantity increases.
D)   decreases and the equilibrium quantity is ambiguous.E) None of the above
F) B) and C)

Question 2

If a good is normal, then an increase in income will result in an)

Accepted Answer

A)   increase in the demand for the good.
B)   decrease in the demand for the good.
C)   movement down and to the right along the demand curve for the good.
D)   movement up and to the left along the demand curve for the good.E) A) and B)
F) A) and C)

Question 3

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

Accepted Answer

A)   Both the equilibrium price and quantity would increase.
B)   Both the equilibrium price and quantity would decrease.
C)   The equilibrium price would increase, and the equilibrium quantity would decrease.
D)   The equilibrium price would decrease, and the equilibrium quantity would increase.E) C) and D)
F) A) and C) D

Question 4

An increase in the price of ink will shift the supply curve for pens to the left.

Accepted Answer

A) True 
 B)False

Question 5

Advances in production technology typically reduce firms' costs.

Accepted Answer

A) True 
 B)False

Question 6

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, the function for market supply can be written as QS=

Accepted Answer

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

Question 7

The forces that make market economies work are

Accepted Answer

A)   work and leisure.
B)   politics and religion.
C)   supply and demand.
D)   taxes and government spending.E) A) and B)
F) A) and C)

Question 8

An increase in quantity demanded

Accepted Answer

A)   results in a movement downward and to the right along a demand curve.
B)   results in a movement upward and to the left along a demand curve.
C)   shifts the demand curve to the left.
D)   shifts the demand curve to the right.E) B) and D)
F) A) and D)

Question 9

The market demand curve

Accepted Answer

A)   is the sum of all individual demand curves.
B)   is the demand curve for every product in an industry.
C)   shows the average quantity demanded by individual demanders at each price.
D)   is always flatter than an individual demand curve.E) A) and D)
F) A) and C)

Question 10

Figure 4-18 
-Refer to Figure 4-18. At what price would there be an excess supply of 200 units of the good?

Accepted Answer

A)   $15
B)   $20
C)   $30
D)   $35E) All of the above
F) A) and B)

Question 11

Which of the following might cause the demand curve for an inferior good to shift to the left?

Accepted Answer

A)   a decrease in income
B)   an increase in the price of a substitute
C)   an increase in the price of a complement
D)   None of the above is correct.E) A) and B)
F) All of the above

Question 12

Figure 4-27

-Refer to Figure 4-27. Which of the four panels represents the market for winter coats as we progress from winter to spring?

Accepted Answer

A)   Panel a) 
B)   Panel b) 
C)   Panel c) 
D)   Panel d) E) All of the above
F) None of the above B

Question 13

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities. 
-Refer to Figure 4-25. All else equal, an increase in the use of laptop computers for note-taking would cause a move from

Accepted Answer

A)   x to y.
B)   y to x.
C)   SA to SB.
D)   SB to SA.E) All of the above
F) None of the above

Question 14

Which of the following characteristics is required for a perfectly competitive market?

Accepted Answer

A)   The goods offered for sale are exactly the same.
B)   There are so many buyers and sellers that no single buyer or seller has any influence over the market price.
C)   It is difficult for new sellers to enter the market.
D)   Both a and b are correct.E) A) and D)
F) B) and C) D

Question 15

Table 4-3
 
-Refer to Table 4-3. For whom is the good a normal good?

Accepted Answer

A)   Bert only
B)   Grover only
C)   Bert, Ernie, Grover, and Oscar
D)   This cannot be determined from the table.E) A) and B)
F) A) and C)

Question 16

Table 4-3
 
-Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $1 is

Accepted Answer

A)   4 units.
B)   7.75 units.
C)   14 units.
D)   31 units.E) A) and C)
F) A) and B)

Question 17

Figure 4-27

-Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity demanded?

Accepted Answer

A)   Panel a) 
B)   Panel b) 
C)   Panel c) 
D)   Panel d) E) B) and D)
F) All of the above

Question 18

Figure 4-20 
-Refer to Figure 4-20. In this market, equilibrium price and quantity, respectively, are

Accepted Answer

A)   $15 and 400 units.
B)   $20 and 600 units.
C)   $25 and 500 units.
D)   $25 and 800 units.E) All of the above
F) C) and D)

Question 19

Figure 4-19 
-Refer to Figure 4-19. In this market, equilibrium price and quantity, respectively, are

Accepted Answer

A)   $10 and 30 units.
B)   $10 and 50 units.
C)   $10 and 70 units.
D)   $4 and 50 units.E) A) and D)
F) B) and C)

Question 20

Figure 4-8 
-Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless keyboards, a complementary good, increases. Which of the following changes would occur?

Accepted Answer

A)   a movement along D2 from point A to point B
B)   a movement along D2 from point B to point A
C)   a shift from D1 to D2
D)   a shift from D2 to D1E) B) and C)
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

Figure 4-23 -Refer to Figure 4-23. In this market for sunscreen, there is a decrease in the price of zinc oxide, an input into sunscreen, and more producers enter the market. The equilibrium price

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If a good is normal, then an increase in income will result in an)

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What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

Correct AnswerverifiedD

An increase in the price of ink will shift the supply curve for pens to the left.

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Advances in production technology typically reduce firms' costs.

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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, the function for market supply can be written as QS=

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The forces that make market economies work are

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An increase in quantity demanded

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The market demand curve

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Figure 4-18 -Refer to Figure 4-18. At what price would there be an excess supply of 200 units of the good?

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Which of the following might cause the demand curve for an inferior good to shift to the left?

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Figure 4-27 -Refer to Figure 4-27. Which of the four panels represents the market for winter coats as we progress from winter to spring?

Correct AnswerverifiedB

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, an increase in the use of laptop computers for note-taking would cause a move from

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Which of the following characteristics is required for a perfectly competitive market?

Correct AnswerverifiedD

Table 4-3 -Refer to Table 4-3. For whom is the good a normal good?

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Table 4-3 -Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $1 is

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Figure 4-27 -Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity demanded?

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Figure 4-20 -Refer to Figure 4-20. In this market, equilibrium price and quantity, respectively, are

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Figure 4-19 -Refer to Figure 4-19. In this market, equilibrium price and quantity, respectively, are

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Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless keyboards, a complementary good, increases. Which of the following changes would occur?

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B

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