Question 1

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

Accepted Answer

A)   increase in demand.
B)   decrease in demand.
C)   decrease in quantity demanded.
D)   increase in quantity demanded.E) None of the above
F) C) and D)

Question 2

Which of the following would cause an increase in demand for golf balls?

Accepted Answer

A)   a decrease in the price of golf balls
B)   an increase in the price of green fees
C)   an expectation by buyers that their incomes will increase in the very near future
D)   a change in consumer tastes away from golf and toward tennisE) B) and C)
F) A) and B)

Question 3

Differentiate between a change in quantity demanded and a change in demand.

Accepted Answer

A change in a good's own,current price i...

Question 4

When the price of a good is higher than the equilibrium price,

Accepted Answer

A)   a shortage will exist.
B)   buyers desire to purchase more than is produced.
C)   sellers desire to produce and sell more than buyers wish to purchase.
D)   quantity demanded exceeds quantity supplied.E) A) and B)
F) B) and D)

Question 5

The federal government's "Cash For Clunkers" program provided consumers up to $4,500 towards new,environmentally friendly automobiles when trading in a less fuel efficient vehicle.Discuss the effect of this move on the industry's demand curve.

Accepted Answer

The "Cash For Clunkers" program made con...

Question 6

An increase in the price of ice cream would cause a decrease in the demand for ice cream and an increase in the demand for frozen yogurt,a substitute.

Accepted Answer

A) True 
 B)False

Question 7

The supply curve shows:

Accepted Answer

A)   the same basic information as a demand curve.
B)   how the average cost of production varies with price.
C)   how the quantity supplied varies with price.
D)   how the quantity demanded varies with price.E) A) and D)
F) None of the above

Question 8

You lose your job and,as a result,you buy fewer iTunes music downloads.This shows that you consider iTunes music downloads to be a(n)

Accepted Answer

A)   luxury good.
B)   inferior good.
C)   normal good.
D)   complementary good.E) C) and D)
F) B) and D)

Question 9

If bad weather destroyed half of the current coffee crop,ceteris paribus,it would:

Accepted Answer

A)   increase the demand for coffee.
B)   decrease the demand for coffee.
C)   increase the demand for tea.
D)   decrease the demand for tea.E) None of the above
F) All of the above

Question 10

A technological advance that reduces the cost of producing computers will shift the supply curve of computers to the right.

Accepted Answer

A) True 
 B)False

Question 11

If a product's price increases,quantity:

Accepted Answer

A)   supplied increases.
B)   supplied decreases.
C)   supplied does not change, but supply does increase.
D)   demanded increases.E) B) and D)
F) A) and D)

Question 12

Exhibit 4-9 The diagram below represents the market for butter.  Refer to Exhibit 4-9.At a market price of $1,there exists a:

Accepted Answer

A)   shortage equal to 5,000 pounds of butter.
B)   surplus equal to 5,000 pounds of butter.
C)   shortage equal to 11,000 pounds of butter.
D)   surplus equal to 11,000 pounds of butter.E) C) and D)
F) B) and C)

Question 13

Two donut chains in your town are battling for customers.The manager of the Real Yum Donut Shop lowered donut prices.As a result,customers:

Accepted Answer

A)   increase the quantity demanded of Real Yum donuts.
B)   decrease the quantity demanded of Real Yum donuts.
C)   buy the same quantity of Real Yum donuts as before the price change.
D)   decrease their demand for Real Yum donuts.E) B) and C)
F) A) and B)

Question 14

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift of:

Accepted Answer

A)   the demand curve, as consumers try to economize because of the shortage.
B)   the demand curve and a rightward shift of the supply curve.
C)   the supply curve.
D)   the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.E) A) and B)
F) All of the above

Question 15

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

Accepted Answer

A)   a decrease in the price of electricity
B)   an increase in the price of air conditioners
C)   an increase in the price of heating oil
D)   a decrease in the price of natural gasE) C) and D)
F) B) and C)

Question 16

The law of demand refers to the:

Accepted Answer

A)   decrease in price that results as more units of a product are demanded.
B)   increase in price that results from an increase in demand for a good of limited supply.
C)   inverse relationship between the price of a good and the quantity demanded.
D)   increase in the quantity of a good made available when its price increases.E) B) and D)
F) A) and D)

Question 17

If a surplus exists in a market,then we know that the actual price is

Accepted Answer

A)   above the equilibrium price, and quantity supplied is greater than quantity demanded.
B)   above the equilibrium price, and quantity demanded is greater than quantity supplied.
C)   below the equilibrium price, and quantity demanded is greater than quantity supplied.
D)   below the equilibrium price, and quantity supplied is greater than quantity demanded.E) A) and D)
F) B) and D)

Question 18

A decrease in quantity demanded

Accepted Answer

A)   illustrated by a movement downward and to the right along a demand curve.
B)   illustrated by 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) A) and D)
F) B) and D)

Question 19

Along a supply curve:

Accepted Answer

A)   supply changes as price changes.
B)   quantity supplied changes as price changes.
C)   supply changes as technology changes.
D)   quantity supplied changes as technology changes.E) All of the above
F) C) and D)

Question 20

Which of the following changes would not shift the demand curve for a good or service?

Accepted Answer

A)   a change in income
B)   a change in the price of the good or service
C)   a change in expectations about the future price of the good or service
D)   a change in the price of a related good or serviceE) None of the above
F) A) and B)

Exam 4: Demand, Supply, and Market Equilibrium

Two donut chains in your town are battling for customers.The manager of the Real Yum Donut Shop lowered donut prices.As a result,customers:

Correct AnswerverifiedShow Answer

You lose your job and,as a result,you buy fewer iTunes music downloads.This shows that you consider iTunes music downloads to be a(n)

Correct AnswerverifiedShow Answer

A technological advance that reduces the cost of producing computers will shift the supply curve of computers to the right.

Correct AnswerverifiedShow Answer

The federal government's "Cash For Clunkers" program provided consumers up to $4,500 towards new,environmentally friendly automobiles when trading in a less fuel efficient vehicle.Discuss the effect of this move on the industry's demand curve.

Correct AnswerverifiedThe "Cash For Clunkers" program made con...View AnswerShow Answer

The supply curve shows:

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

Correct AnswerverifiedShow Answer

Along a supply curve:

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If a surplus exists in a market,then we know that the actual price is

Correct AnswerverifiedShow Answer

Which of the following would cause an increase in demand for golf balls?

Correct AnswerverifiedShow Answer

If bad weather destroyed half of the current coffee crop,ceteris paribus,it would:

Correct AnswerverifiedShow Answer

Exhibit 4-9 The diagram below represents the market for butter. Refer to Exhibit 4-9.At a market price of $1,there exists a:

Correct AnswerverifiedShow Answer

Which of the following changes would not shift the demand curve for a good or service?

Correct AnswerverifiedShow Answer

When the price of a good is higher than the equilibrium price,

Correct AnswerverifiedShow Answer

A decrease in quantity demanded

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Differentiate between a change in quantity demanded and a change in demand.

Correct AnswerverifiedA change in a good's own,current price i...View AnswerShow Answer

If a product's price increases,quantity:

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The law of demand refers to the:

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A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift of:

Correct AnswerverifiedShow Answer

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

Correct AnswerverifiedShow Answer

An increase in the price of ice cream would cause a decrease in the demand for ice cream and an increase in the demand for frozen yogurt,a substitute.

Correct AnswerverifiedShow Answer

Correct Answer
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The "Cash For Clunkers" program made con...
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A change in a good's own,current price i...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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