Question 1

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 B)
F) None of the above

Question 2

If,at the current price,there is a shortage of a good,then

Accepted Answer

A)  sellers are producing more than buyers wish to buy.
B)  the market must be in equilibrium.
C)  the price is below the equilibrium price.
D)  quantity demanded equals quantity supplied.E) A) and D)
F) A) and C)

Question 3

Beef is a normal good.You observe that both the equilibrium price and quantity of beef have fallen over time.Which of the following explanations would be most consistent with this observation?

Accepted Answer

A)  Consumers have experienced an increase in income,and beef-production technology has improved.
B)  The price of chicken has risen,and the price of steak sauce has fallen.
C)  New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy.
D)  The demand curve for beef must be positively sloped.E) A) and C)
F) B) and D)

Question 4

Figure 4-22 
-Refer to Figure 4-22.At a price of $24,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) A) and C)
F) None of the above

Question 5

What would happen to the equilibrium price and quantity of lattés if consumers' incomes rise and lattés are a normal good?

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

Question 6

Figure 4-21 
-Refer to Figure 4-21.What is the equilibrium price in this market?

Accepted Answer

A)  $0
B)  $5
C)  $10
D)  $20E) C) and D)
F) None of the above

Question 7

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto-workers accept lower wages,and automobile insurance becomes more expensive?

Accepted Answer

A)  Price will rise.
B)  Price will fall.
C)  Price will stay exactly the same.
D)  The price change will be ambiguous.E) A) and B)
F) B) and C)

Question 8

Figure 4-26 
-Refer to Figure 4-26.Which of the following movements would illustrate the effect in the market for golf balls of an increase in green fees?

Accepted Answer

A)  Point A to Point B
B)  Point C to Point B
C)  Point C to Point D
D)  Point A to Point DE) B) and C)
F) A) and D)

Question 9

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities. A to SB. D) SB to SA." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-25.All else equal,sellers expecting the price of paper to decrease next month when many college students leave campuses for the summer would cause a current move from

Accepted Answer

A)  x to y.
B)  y to x.
C)  SA to SB.
D)  SB to SA.E) A) and C)
F) B) and D)

Question 10

Consider the market for new DVDs.If DVD players became cheaper,buyers expected DVD prices to fall next year,used DVDs became more expensive,and DVD production technology improved,then the equilibrium price of a new DVD would

Accepted Answer

A)  rise.
B)  fall.
C)  stay the same.
D)  could rise,fall,or remain unchanged.E) B) and C)
F) A) and B)

Question 11

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto-workers negotiate higher wages?

Accepted Answer

A)  Price will fall,and the effect on quantity is ambiguous.
B)  Price will rise,and the effect on quantity is ambiguous.
C)  Quantity will fall,and the effect on price is ambiguous.
D)  Quantity will rise,and the effect on price is ambiguous.E) B) and D)
F) A) and D)

Question 12

Figure 4-26 
-Refer to Figure 4-26.Which of the following movements would illustrate the effect in the market for ballroom dancing lessons resulting from the introduction of a popular new television show called "Dancing with the Stars"?

Accepted Answer

A)  Point A to Point B
B)  Point C to Point B
C)  Point C to Point D
D)  Point A to Point DE) A) and C)
F) None of the above

Question 13

Figure 4-27

-Refer to Figure 4-27.Panel (d) shows which of the following?

Accepted Answer

A)  a decrease in demand and a decrease in quantity supplied
B)  a decrease in demand and a decrease in supply
C)  a decrease in quantity demanded and a decrease in quantity supplied
D)  a decrease in quantity demanded and a decrease in supplyE) A) and C)
F) B) and D)

Question 14

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. A to DB. B) DB to DA. C) x to y. D) y to x." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-24.All else equal,an increase in the income of buyers who consider turkey to be an inferior good would cause a move from

Accepted Answer

A)  DA to DB.
B)  DB to DA.
C)  x to y.
D)  y to x.E) A) and D)
F) C) and D)

Question 15

If,at the current price,there is a surplus of a good,then

Accepted Answer

A)  sellers are producing more than buyers wish to buy.
B)  the market must be in equilibrium.
C)  the price is below the equilibrium price.
D)  quantity demanded equals quantity supplied.E) A) and C)
F) None of the above

Question 16

During the last few decades in the United States,health officials have argued that eating too much beef might be harmful to human health.As a result,there has been a significant decrease in the amount of beef produced.Which of the following best explains the decrease in production?

Accepted Answer

A)  Beef producers,concerned about the health of their customers,decided to produce relatively less beef.
B)  Government officials,concerned about consumer health,ordered beef producers to produce relatively less beef.
C)  Individual consumers,concerned about their own health,decreased their demand for beef,which lowered the equilibrium price of beef,making it less attractive to produce.
D)  Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace.E) A) and C)
F) B) and C)

Question 17

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Accepted Answer

A)  decide which direction to shift the curve.
B)  decide whether the fires affected demand or supply.
C)  graph the shift to see the effect on equilibrium.
D)  None of the above is correct.E) None of the above
F) B) and D)

Question 18

Equilibrium price must decrease when demand

Accepted Answer

A)  increases and supply does not change,when demand does not change and supply decreases,and when demand decreases and supply increases simultaneously.
B)  increases and supply does not change,when demand does not change and supply decreases,and when demand increases and supply decreases simultaneously.
C)  decreases and supply does not change,when demand does not change and supply increases,and when demand decreases and supply increases simultaneously.
D)  decreases and supply does not change,when demand does not change and supply increases,and when demand increases and supply decreases simultaneously.E) C) and D)
F) B) and C)

Exam 4: The Market Forces of Supply and Demand: Supply and Demand Together

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24.All else equal,an increase in the income of buyers who consider turkey to be an inferior good would cause a move from

Correct Answer
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You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Correct Answer
verified

Figure 4-22 -Refer to Figure 4-22.At a price of $24,there is a

Correct Answer
verified

Figure 4-26 -Refer to Figure 4-26.Which of the following movements would illustrate the effect in the market for golf balls of an increase in green fees?

Correct Answer
verified

If,at the current price,there is a surplus of a good,then

Correct Answer
verified

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto-workers accept lower wages,and automobile insurance becomes more expensive?

Correct Answer
verified

Figure 4-27 -Refer to Figure 4-27.Panel (d) shows which of the following?

Correct Answer
verified

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?

Correct Answer
verified

Consider the market for new DVDs.If DVD players became cheaper,buyers expected DVD prices to fall next year,used DVDs became more expensive,and DVD production technology improved,then the equilibrium price of a new DVD would

Correct Answer
verified

Beef is a normal good.You observe that both the equilibrium price and quantity of beef have fallen over time.Which of the following explanations would be most consistent with this observation?

Correct Answer
verified

Figure 4-21 -Refer to Figure 4-21.What is the equilibrium price in this market?

Correct Answer
verified

Equilibrium price must decrease when demand

Correct Answer
verified

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto-workers negotiate higher wages?

Correct Answer
verified

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25.All else equal,sellers expecting the price of paper to decrease next month when many college students leave campuses for the summer would cause a current move from

Correct Answer
verified

What would happen to the equilibrium price and quantity of lattés if consumers' incomes rise and lattés are a normal good?

Correct Answer
verified

During the last few decades in the United States,health officials have argued that eating too much beef might be harmful to human health.As a result,there has been a significant decrease in the amount of beef produced.Which of the following best explains the decrease in production?

Correct Answer
verified

Figure 4-26 -Refer to Figure 4-26.Which of the following movements would illustrate the effect in the market for ballroom dancing lessons resulting from the introduction of a popular new television show called "Dancing with the Stars"?

Correct Answer
verified

If,at the current price,there is a shortage of a good,then

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand: Supply and Demand Together

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24.All else equal,an increase in the income of buyers who consider turkey to be an inferior good would cause a move from

Correct AnswerverifiedShow Answer

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Correct AnswerverifiedShow Answer

Figure 4-22 -Refer to Figure 4-22.At a price of $24,there is a

Correct AnswerverifiedShow Answer

Figure 4-26 -Refer to Figure 4-26.Which of the following movements would illustrate the effect in the market for golf balls of an increase in green fees?

Correct AnswerverifiedShow Answer

If,at the current price,there is a surplus of a good,then

Correct AnswerverifiedShow Answer

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto-workers accept lower wages,and automobile insurance becomes more expensive?

Correct AnswerverifiedShow Answer

Figure 4-27 -Refer to Figure 4-27.Panel (d) shows which of the following?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Consider the market for new DVDs.If DVD players became cheaper,buyers expected DVD prices to fall next year,used DVDs became more expensive,and DVD production technology improved,then the equilibrium price of a new DVD would

Correct AnswerverifiedShow Answer

Beef is a normal good.You observe that both the equilibrium price and quantity of beef have fallen over time.Which of the following explanations would be most consistent with this observation?

Correct AnswerverifiedShow Answer

Figure 4-21 -Refer to Figure 4-21.What is the equilibrium price in this market?

Correct AnswerverifiedShow Answer

Equilibrium price must decrease when demand

Correct AnswerverifiedShow Answer

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto-workers negotiate higher wages?

Correct AnswerverifiedShow Answer

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25.All else equal,sellers expecting the price of paper to decrease next month when many college students leave campuses for the summer would cause a current move from

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of lattés if consumers' incomes rise and lattés are a normal good?

Correct AnswerverifiedShow Answer

During the last few decades in the United States,health officials have argued that eating too much beef might be harmful to human health.As a result,there has been a significant decrease in the amount of beef produced.Which of the following best explains the decrease in production?

Correct AnswerverifiedShow Answer

Figure 4-26 -Refer to Figure 4-26.Which of the following movements would illustrate the effect in the market for ballroom dancing lessons resulting from the introduction of a popular new television show called "Dancing with the Stars"?

Correct AnswerverifiedShow Answer

If,at the current price,there is a shortage of a good,then

Correct AnswerverifiedShow Answer

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