Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

A very hot summer in Atlanta will cause

Accepted Answer

A)  the demand curve for lemonade to shift to the left.
B)  the demand for air conditioners to decrease.
C)  the demand for jackets to decrease.
D)  a movement downward and to the right along the demand curve for tank tops.E) C) and D)
F) A) and B)

Question 3

Figure 4-18 
-Refer to Figure 4-18. At a price of $35, there would be

Accepted Answer

A)  a shortage, and the price would tend to rise from $35 to a higher price.
B)  a surplus, and the price would tend to rise from $35 to a higher price.
C)  excess demand, and the price would tend to fall from $35 to a lower price.
D)  excess supply, and the price would tend to fall from $35 to a lower price.E) A) and D)
F) C) and D)

Question 4

Figure 4-5 
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand A to Demand B in the market for oranges in the United States?

Accepted Answer

A)  a freeze in Florida
B)  a technological advance that allows oranges to ripen faster
C)  a decrease in the price of apples
D)  an announcement by the FDA that oranges prevent heart diseaseE) A) and B)
F) A) and C)

Question 5

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

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) None of the above
F) B) and D)

Question 6

When the price of a good or service changes,

Accepted Answer

A)  the supply curve shifts in the opposite direction.
B)  the demand curve shifts in the opposite direction.
C)  the demand curve shifts in the same direction.
D)  there is a movement along a given demand curve.E) A) and D)
F) A) and C)

Question 7

Equilibrium quantity must decrease when demand

Accepted Answer

A)  increases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.
B)  increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease.
C)  decreases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease.
D)  decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.E) None of the above
F) B) and C)

Question 8

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?

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) A) and D)
F) A) and B)

Question 9

Which of the following would not shift the supply curve for mp3 players?

Accepted Answer

A)  an increase in the price of mp3 players
B)  a decrease in the number of sellers of mp3 players
C)  an increase in the price of plastic, an input into the production of mp3 players
D)  an improvement in the technology used to produce mp3 playersE) A) and C)
F) A) and D)

Question 10

A decrease in supply shifts the supply curve to the left.

Accepted Answer

A) True 
 B)False

Question 11

Figure 4-22 
-Refer to Figure 4-22. At a price of $8, there is a

Accepted Answer

A)  surplus of 4 units.
B)  surplus of 8 units.
C)  shortage of 4 units.
D)  shortage of 8 units.E) B) and D)
F) None of the above

Question 12

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 $2 is

Accepted Answer

A)  0 units.
B)  3.5 units.
C)  12 units.
D)  14 units.E) C) and D)
F) B) and C)

Question 13

Economists normally

Accepted Answer

A)  do not try to explain people's tastes, but they do try to explain what happens when tastes change.
B)  believe that they must be able to explain people's tastes in order to explain what happens when tastes change.
C)  do not believe that people's tastes determine demand, so they ignore the subject of tastes.
D)  incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements.E) A) and B)
F) None of the above

Question 14

Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Accepted Answer

A) True 
 B)False

Question 15

A decrease in demand shifts the demand curve to the left.

Accepted Answer

A) True 
 B)False

Question 16

If the supply of a product increases, then we would expect equilibrium price

Accepted Answer

A)  to increase and equilibrium quantity to decrease.
B)  to decrease and equilibrium quantity to increase.
C)  and equilibrium quantity to both increase.
D)  and equilibrium quantity to both decrease.E) A) and B)
F) None of the above

Question 17

A market's equilibrium is the point at which the supply and demand curves intersect.

Accepted Answer

A) True 
 B)False

Question 18

In markets, prices move toward equilibrium because of

Accepted Answer

A)  the actions of buyers and sellers.
B)  government regulations placed on market participants.
C)  increased competition among sellers.
D)  buyers' ability to affect market outcomes.E) A) and B)
F) A) and C)

Question 19

What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the near future?

Accepted Answer

A)  The demand for shotgun-shell ammunition will increase.
B)  The demand for shotgun-shell ammunition will decrease.
C)  The demand for shotgun-shell ammunition will be unaffected.
D)  The supply of shotgun-shell ammunition will increase.E) B) and D)
F) A) and B)

Question 20

Figure 4-9
Panel (a) 
Panel (b)   
-Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (a) , the arrows are consistent with which of the following events?

Accepted Answer

A)  Tobacco and marijuana are complements, and the price of marijuana decreased.
B)  Tobacco is a "gateway drug," and the price of marijuana increased.
C)  The price of cigarettes increased.
D)  The arrows are consistent with all of these events.E) B) and D)
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

In markets, prices move toward equilibrium because of

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

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Equilibrium quantity must decrease when demand

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Figure 4-22 -Refer to Figure 4-22. At a price of $8, there is a

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Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand A to Demand B in the market for oranges in the United States?

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A market's equilibrium is the point at which the supply and demand curves intersect.

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If the supply of a product increases, then we would expect equilibrium price

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A decrease in demand shifts the demand curve to the left.

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A very hot summer in Atlanta will cause

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Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

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A decrease in supply shifts the supply curve to the left.

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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 4-9 Panel (a) Panel (b) -Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (a) , the arrows are consistent with which of the following events?

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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 $2 is

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If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?

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Economists normally

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Which of the following would not shift the supply curve for mp3 players?

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What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the near future?

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Figure 4-18 -Refer to Figure 4-18. At a price of $35, there would be

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When the price of a good or service changes,

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