Question 1

Which of the following would most likely serve as an example of a monopoly?

Accepted Answer

A)  a restaurant in a large city
B)  a dry cleaners in a large city
C)  a local gas station
D)  a local electrical companyE) A) and B)
F) C) and D)

Question 2

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 3

Figure 4-15 
-Refer to Figure 4-15. Equilibrium price and quantity are, respectively,

Accepted Answer

A)  $15 and 200 units.
B)  $25 and 600 units.
C)  $25 and 400 units.
D)  $35 and 200 units.E) A) and B)
F) A) and C)

Question 4

Most studies have found that tobacco and marijuana are complements rather than substitutes.

Accepted Answer

A) True 
 B)False

Question 5

If a person expects the price of pumpkins to increase next month, then that person's current demand for pumpkins will increase.

Accepted Answer

A) True 
 B)False

Question 6

In a market economy, supply and demand are important because they

Accepted Answer

A)  play a critical role in the allocation of the economy's scarce resources.
B)  determine how much of each good gets produced.
C)  can be used to predict the impact on the economy of various events and policies.
D)  All of the above are correct.E) A) and C)
F) A) and B)

Question 7

The current price of neckties is $30, but the equilibrium price of neckties is $25. As a result,

Accepted Answer

A)  the quantity supplied of neckties exceeds the quantity demanded of neckties at the $30 price.
B)  the equilibrium quantity of neckties exceeds the quantity demanded at the $30 price.
C)  there is a surplus of neckties at the $30 price.
D)  All of the above are correct.E) B) and C)
F) All of the above

Question 8

Most studies indicate that tobacco and marijuana tend to be

Accepted Answer

A)  substitutes.
B)  complements.
C)  unrelated because one good is legal while the other one is illegal.
D)  inferior goods.E) None of the above
F) A) and C)

Question 9

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 10

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, the equilibrium price rises, but the effect on the equilibrium quantity is ambiguous.

Accepted Answer

A) True 
 B)False

Question 11

Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs. As a result of this information, today's demand curve for Mustangs

Accepted Answer

A)  shifts to the right.
B)  shifts to the left.
C)  shifts either to the right or to the left, but we cannot determine the direction of the shift from the given information.
D)  will not shift; rather, the demand curve for Mustangs will shift to the right next month.E) A) and B)
F) None of the above

Question 12

Which of the following would increase in response to a decrease in the price of ironing boards?

Accepted Answer

A)  the quantity of irons demanded at each possible price of irons
B)  the equilibrium quantity of irons
C)  the equilibrium price of irons
D)  All of the above are correct.E) All of the above
F) None of the above

Question 13

Suppose scientists provide evidence that chocolate pudding increases the bad cholesterol levels of those who eat it. We would expect to see

Accepted Answer

A)  no change in the demand for chocolate pudding.
B)  a decrease in the demand for chocolate pudding.
C)  an increase in the demand for chocolate pudding.
D)  a decrease in the supply of chocolate pudding.E) A) and B)
F) A) and C)

Question 14

A market demand curve shows how the total quantity demanded of a good varies as

Accepted Answer

A)  income varies.
B)  price varies.
C)  price of the nearest substitute good varies.
D)  supply varies.E) B) and D)
F) B) and C)

Question 15

Prices allocate a market economy's scarce resources.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following sets of events must cause an increase in the price of a new house?

Accepted Answer

A)  higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future
B)  lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future
C)  lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future
D)  higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the futureE) C) and D)
F) A) and C)

Question 17

Figure 4-17 
-Refer to Figure 4-17. At a price of $20, which of the following statements is not correct?

Accepted Answer

A)  The market is in equilibrium.
B)  Equilibrium price is equal to equilibrium quantity.
C)  There is no pressure for price to change.
D)  The quantity of the good that is bought and sold is 600 units.E) None of the above
F) A) and B)

Question 18

Table 4-3
   Price  Bet’s  Quantity  Denanded  Ernie’s  Quentity  Denanded  Gruver’s  Qurntity  Denanded  Oscar’s  Quantity  Demanded $0.00201648$0.50181266$1.00141025$1.5012804$2.006602$2.500400\begin{array} { | c | c | c | c | c | } \hline 	ext { Price } & \begin{array} { c } 	ext { Bet&#x27;s } \	ext { Quantity } \	ext { Denanded }\end{array} & \begin{array} { c } 	ext { Ernie&#x27;s } \	ext { Quentity } \	ext { Denanded }\end{array} & \begin{array} { c } 	ext { Gruver&#x27;s } \	ext { Qurntity } \	ext { Denanded }\end{array} & \begin{array} { c } 	ext { Oscar&#x27;s } \	ext { Quantity } \	ext { Demanded }\end{array} \\hline \$ 0.00 & 20 & 16 & 4 & 8 \\hline \$ 0.50 & 18 & 12 & 6 & 6 \\hline \$ 1.00 & 14 & 10 & 2 & 5 \\hline \$ 1.50 & 12 & 8 & 0 & 4 \\hline \$ 2.00 & 6 & 6 & 0 & 2 \\hline \$ 2.50 & 0 & 4 & 0 & 0 \\hline\end{array} Price $0.00$0.50$1.00$1.50$2.00$2.50​ Bet’s  Quantity  Denanded ​2018141260​ Ernie’s  Quentity  Denanded ​161210864​ Gruver’s  Qurntity  Denanded ​462000​ Oscar’s  Quantity  Demanded ​865420​​ 
-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) B) and C)
F) A) and B)

Question 19

Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor, Toysorama, is mass-producing an excellent copy and plans to flood the market with their $5 doll in six weeks. Funsters should

Accepted Answer

A)  "fight fire with fire" by decreasing supply of its doll for six weeks and then increasing the supply.
B)  increase the supply of its doll now before the other doll hits the market.
C)  increase the price of its doll now.
D)  discontinue its doll.E) B) and D)
F) A) and B)

Question 20

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

Accepted Answer

A)  income
B)  tastes
C)  price
D)  expectationsE) C) and D)
F) A) 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 Answer
verified

Which of the following would increase in response to a decrease in the price of ironing boards?

Correct Answer
verified

In a market economy, supply and demand are important because they

Correct Answer
verified

Figure 4-17 -Refer to Figure 4-17. At a price of $20, which of the following statements is not correct?

Correct Answer
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The current price of neckties is $30, but the equilibrium price of neckties is $25. As a result,

Correct Answer
verified

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Correct Answer
verified

Suppose scientists provide evidence that chocolate pudding increases the bad cholesterol levels of those who eat it. We would expect to see

Correct Answer
verified

Most studies indicate that tobacco and marijuana tend to be

Correct Answer
verified

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, the equilibrium price rises, but the effect on the equilibrium quantity is ambiguous.

Correct Answer
verified

Correct Answer
verified

Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs. As a result of this information, today's demand curve for Mustangs

Correct Answer
verified

If a person expects the price of pumpkins to increase next month, then that person's current demand for pumpkins will increase.

Correct Answer
verified

Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor, Toysorama, is mass-producing an excellent copy and plans to flood the market with their $5 doll in six weeks. Funsters should

Correct Answer
verified

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

Correct Answer
verified

Most studies have found that tobacco and marijuana are complements rather than substitutes.

Correct Answer
verified

Which of the following would most likely serve as an example of a monopoly?

Correct Answer
verified

Prices allocate a market economy's scarce resources.

Correct Answer
verified

Which of the following sets of events must cause an increase in the price of a new house?

Correct Answer
verified

Figure 4-15 -Refer to Figure 4-15. Equilibrium price and quantity are, respectively,

Correct Answer
verified

A market demand curve shows how the total quantity demanded of a good varies as

Correct Answer
verified

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

Which of the following would increase in response to a decrease in the price of ironing boards?

Correct AnswerverifiedShow Answer

In a market economy, supply and demand are important because they

Correct AnswerverifiedShow Answer

Figure 4-17 -Refer to Figure 4-17. At a price of $20, which of the following statements is not correct?

Correct AnswerverifiedShow Answer

The current price of neckties is $30, but the equilibrium price of neckties is $25. As a result,

Correct AnswerverifiedShow Answer

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Correct AnswerverifiedShow Answer

Suppose scientists provide evidence that chocolate pudding increases the bad cholesterol levels of those who eat it. We would expect to see

Correct AnswerverifiedShow Answer

Most studies indicate that tobacco and marijuana tend to be

Correct AnswerverifiedShow Answer

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, the equilibrium price rises, but the effect on the equilibrium quantity is ambiguous.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs. As a result of this information, today's demand curve for Mustangs

Correct AnswerverifiedShow Answer

If a person expects the price of pumpkins to increase next month, then that person's current demand for pumpkins will increase.

Correct AnswerverifiedShow Answer

Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor, Toysorama, is mass-producing an excellent copy and plans to flood the market with their $5 doll in six weeks. Funsters should

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Most studies have found that tobacco and marijuana are complements rather than substitutes.

Correct AnswerverifiedShow Answer

Which of the following would most likely serve as an example of a monopoly?

Correct AnswerverifiedShow Answer

Prices allocate a market economy's scarce resources.

Correct AnswerverifiedShow Answer

Which of the following sets of events must cause an increase in the price of a new house?

Correct AnswerverifiedShow Answer

Figure 4-15 -Refer to Figure 4-15. Equilibrium price and quantity are, respectively,

Correct AnswerverifiedShow Answer

A market demand curve shows how the total quantity demanded of a good varies as

Correct AnswerverifiedShow Answer

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