Question 1

Suppose a consumer can choose to consume either apples or oranges. Which of the following results when the price of each fruit increases by 15 percent?​

Accepted Answer

A)  The consumer substitutes apples for oranges.
B)  The income effect of this price change is positive.
C)  The substitution effect of this price change is zero.
D)  The consumer demands more of both the goods.
E)  The consumer substitutes oranges for apples.F) A) and B)
G) D) and E)

Question 2

Markets reduce transactions costs:​

Accepted Answer

A)  by decreasing the time spent searching for information about goods and services.
B)  only when they have a highly structured set of rules like the New York Stock Exchange.
C)  because each market uses the same set of rules for buying and selling goods and services.
D)  only when the government coordinates the plans of many buyers and sellers.
E)  when prices are set by the sellers and are not determined by negotiation between the buyers and the sellers.F) B) and C)
G) A) and E)

Question 3

Which of the following will indicate a shortage of a product in the market to suppliers?​

Accepted Answer

A)  The quantity supplied exceeds the quantity demanded at a particular price.
B)  The quantity demanded decreases substantially.
C)  The stock of inventories of most suppliers increases.
D)  The quantity demanded exceeds the quantity supplied at a particular price.
E)  The price of the product declines to an all-time low.F) A) and B)
G) All of the above

Question 4

Which of the following is the best example of a pair of complements?​

Accepted Answer

A)  Milk and coffee
B)  Coffee and tea
C)  CDs and DVDs
D)  Hiking boots and athletic shoes
E)  Paperback books and hard cover booksF) A) and E)
G) B) and C)

Question 5

The following figure shows the market for a good. Which of the following is most likely to shift demand from D' to D?​ ​
Figure 4.6

Accepted Answer

A)  An increase in the price of a substitute good
B)  An increase in the number of consumers
C)  A decrease in the price of a complementary good
D)  A decline in consumers' incomes if it is a normal good
E)  An increase in consumers' incomes if it is a normal goodF) A) and B)
G) B) and D)

Question 6

Identify the effect of a reduction in the price of steel on the equilibrium price and quantity of automobiles, for a given demand curve.​

Accepted Answer

A)  An increase in both equilibrium price and equilibrium quantity
B)  A decrease in both equilibrium price and equilibrium quantity
C)  An increase in equilibrium price and a decrease in equilibrium quantity
D)  A decrease in equilibrium price and an increase in equilibrium quantity
E)  An increase in equilibrium price but no change in equilibrium quantity​F) A) and E)
G) A) and D)

Question 7

Consider the market for wheat that is initially in equilibrium. In which of the following situations will the equilibrium price of wheat increase and the change in the equilibrium quantity of wheat be indeterminate?​

Accepted Answer

A)  If supply and demand both decline
B)  If supply and demand both rise
C)  If supply declines and demand rises
D)  If supply rises and demand declines
E)  If supply remains constant and demand risesF) A) and B)
G) A) and C)

Question 8

If demand decreases, then quantity supplied will increase.​

Accepted Answer

A) True 
 B)False

Question 9

Suppose the market for beef cattle was initially in equilibrium .An increase in the price of the fodder used to feed cattle would cause:​

Accepted Answer

A)  the demand for beef cattle to increase, driving the price of beef upward.
B)  the supply of beef cattle to decline, driving the price of beef upward in the long run.
C)  the supply of beef to increase, placing downward pressure on the price of beef in the long run.
D)  both supply and demand to fall, leaving the price of beef virtually unchanged.
E)  the supply of beef to increase, driving the price of beef down and increasing demand.F) A) and E)
G) A) and D)

Question 10

Which of the following is likely to shift the demand curve for a normal good to the right?​

Accepted Answer

A)  A decrease in income, if the good is a normal good
B)  An increase in the price of a complementary good
C)  A decrease in the good's price, if the good is normal
D)  An increase in the good's price, if the good is inferior
E)  An expectation of a shortage in the futureF) A) and B)
G) C) and D)

Question 11

The following figure shows the demand curves for baby formula. Which of the following changes is likely to happen if the price of baby formula increases?​ ​
Figure 4.1
1 to D2 B) A movement along demand curve D1 from point a to point b C) A shift in the demand curve from D2 to D1 D) A movement along the demand curve D2 from point d to point c E) A movement from point b on the demand curve D1 to point c on the demand curve D2" class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)  A shift in the demand curve from D1 to D2
B)  A movement along demand curve D1 from point a to point b
C)  A shift in the demand curve from D2 to D1
D)  A movement along the demand curve D2 from point d to point c
E)  A movement from point b on the demand curve D1 to point c on the demand curve D2F) A) and B)
G) None of the above

Question 12

Suppose a market is in equilibrium. If a price floor is set in this market below the equilibrium price it is likely that:​

Accepted Answer

A)  quantity demanded will increase.
B)  a surplus will arise.
C)  a shortage will arise.
D)  the quantity sold will rise.
E)  the market will remain in equilibrium.F) A) and E)
G) B) and C)

Question 13

Which of the following is most likely to cause the demand for ice cream, a normal good, to decrease?​

Accepted Answer

A)  A decrease in the price of ice cream
B)  A decrease in the price of milk
C)  A warmer weather
D)  An increase in the number of consumers
E)  A decrease in consumer incomeF) None of the above
G) A) and B)

Question 14

The impact of a $200 increase in income on quantity of housing demanded would be called an income effect.​

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would shift the supply curve of a good to the left?​

Accepted Answer

A)  An increase in the price of that good
B)  A decrease in the price of an alternative good
C)  An improvement in technology used in producing the good
D)  An increase in the cost of an important resource used to produce the good
E)  An increase in the number of producers of the goodF) A) and E)
G) B) and E)

Question 16

Classified ads and job web sites reduce the transaction costs of finding a new job.​

Accepted Answer

A) True 
 B)False

Question 17

The law of demand states that:​

Accepted Answer

A)  other things remaining constant, price and quantity demanded are positively related.
B)  price is the only factor that influences the quantity that people are willing and able to buy.
C)  other things remaining constant, quantity demanded varies inversely with price.
D)  other things remaining constant, the demand curve shifts whenever the price of a good changes.
E)  by producing a product, firms create a demand for it.F) A) and E)
G) A) and D)

Question 18

For which of the following goods or services is the income effect of a price change likely to be the greatest?​

Accepted Answer

A)  Vitamin capsules
B)  Gasoline
C)  Laundry
D)  Chocolates
E)  College textbooksF) C) and E)
G) B) and D)

Question 19

The table given below shows the quantity supplied and the quantity demanded for a good at different prices. If the price of the good described in the table given below is $1.50, then:​ ​
Table 4.1
​

Accepted Answer

A)  there is a shortage in the market.
B)  there is a surplus in the market.
C)  the market is in equilibrium.
D)  the supply of the good increases by 30 units.
E)  the demand for the good increases by 30 units.F) C) and D)
G) B) and E)

Question 20

Which of the following is likely to shift the market supply curve for corn in the short run?​

Accepted Answer

A)  A change in the price of corn
B)  A change in the price of pesticides
C)  A change in the number of corn consumers
D)  A change in the expectations of consumers about the future price of corn
E)  A change in the money income of corn consumersF) A) and D)
G) A) and C)

Exam 4: Demand, Supply, and Markets

Consider the market for wheat that is initially in equilibrium. In which of the following situations will the equilibrium price of wheat increase and the change in the equilibrium quantity of wheat be indeterminate?​

Correct AnswerverifiedShow Answer

Which of the following is likely to shift the demand curve for a normal good to the right?​

Correct AnswerverifiedShow Answer

Suppose the market for beef cattle was initially in equilibrium .An increase in the price of the fodder used to feed cattle would cause:​

Correct AnswerverifiedShow Answer

For which of the following goods or services is the income effect of a price change likely to be the greatest?​

Correct AnswerverifiedShow Answer

The impact of a $200 increase in income on quantity of housing demanded would be called an income effect.​

Correct AnswerverifiedShow Answer

Identify the effect of a reduction in the price of steel on the equilibrium price and quantity of automobiles, for a given demand curve.​

Correct AnswerverifiedShow Answer

Which of the following will indicate a shortage of a product in the market to suppliers?​

Correct AnswerverifiedShow Answer

Which of the following is most likely to cause the demand for ice cream, a normal good, to decrease?​

Correct AnswerverifiedShow Answer

The law of demand states that:​

Correct AnswerverifiedShow Answer

Which of the following would shift the supply curve of a good to the left?​

Correct AnswerverifiedShow Answer

Classified ads and job web sites reduce the transaction costs of finding a new job.​

Correct AnswerverifiedShow Answer

Markets reduce transactions costs:​

Correct AnswerverifiedShow Answer

Suppose a consumer can choose to consume either apples or oranges. Which of the following results when the price of each fruit increases by 15 percent?​

Correct AnswerverifiedShow Answer

If demand decreases, then quantity supplied will increase.​

Correct AnswerverifiedShow Answer

The table given below shows the quantity supplied and the quantity demanded for a good at different prices. If the price of the good described in the table given below is $1.50, then:​ ​ Table 4.1 ​

Correct AnswerverifiedShow Answer

The following figure shows the demand curves for baby formula. Which of the following changes is likely to happen if the price of baby formula increases?​ ​ Figure 4.1

Correct AnswerverifiedShow Answer

Which of the following is likely to shift the market supply curve for corn in the short run?​

Correct AnswerverifiedShow Answer

Suppose a market is in equilibrium. If a price floor is set in this market below the equilibrium price it is likely that:​

Correct AnswerverifiedShow Answer

The following figure shows the market for a good. Which of the following is most likely to shift demand from D' to D?​ ​ Figure 4.6

Correct AnswerverifiedShow Answer

Which of the following is the best example of a pair of complements?​

Correct AnswerverifiedShow Answer

Consider the market for wheat that is initially in equilibrium. In which of the following situations will the equilibrium price of wheat increase and the change in the equilibrium quantity of wheat be indeterminate?

Correct Answer
verified

Which of the following is likely to shift the demand curve for a normal good to the right?

Correct Answer
verified

Suppose the market for beef cattle was initially in equilibrium .An increase in the price of the fodder used to feed cattle would cause:

Correct Answer
verified

For which of the following goods or services is the income effect of a price change likely to be the greatest?

Correct Answer
verified

The impact of a $200 increase in income on quantity of housing demanded would be called an income effect.

Correct Answer
verified

Identify the effect of a reduction in the price of steel on the equilibrium price and quantity of automobiles, for a given demand curve.

Correct Answer
verified

Which of the following will indicate a shortage of a product in the market to suppliers?

Correct Answer
verified

Which of the following is most likely to cause the demand for ice cream, a normal good, to decrease?

Correct Answer
verified

The law of demand states that:

Correct Answer
verified

Which of the following would shift the supply curve of a good to the left?

Correct Answer
verified

Classified ads and job web sites reduce the transaction costs of finding a new job.

Correct Answer
verified

Markets reduce transactions costs:

Correct Answer
verified

Suppose a consumer can choose to consume either apples or oranges. Which of the following results when the price of each fruit increases by 15 percent?

Correct Answer
verified

If demand decreases, then quantity supplied will increase.

Correct Answer
verified

The table given below shows the quantity supplied and the quantity demanded for a good at different prices. If the price of the good described in the table given below is $1.50, then: Table 4.1

Correct Answer
verified

The following figure shows the demand curves for baby formula. Which of the following changes is likely to happen if the price of baby formula increases? Figure 4.1

Correct Answer
verified

Which of the following is likely to shift the market supply curve for corn in the short run?

Correct Answer
verified

Suppose a market is in equilibrium. If a price floor is set in this market below the equilibrium price it is likely that:

Correct Answer
verified

The following figure shows the market for a good. Which of the following is most likely to shift demand from D' to D? Figure 4.6

Correct Answer
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Which of the following is the best example of a pair of complements?

Correct Answer
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