Question 1

A leftward shift of the market demand curve for HDTVs, ceteris paribus, causes equilibrium price to

Accepted Answer

A)   Increase and quantity to decrease.
B)   Decrease and quantity to decrease.
C)   Increase and quantity to increase.
D)   Decrease and quantity to increase.

Question 2

Which of the following events would cause a rightward shift in the market supply curve for automobiles?

Accepted Answer

A)   A technological improvement that reduces the cost of production.
B)   An increase in the wages of autoworkers.
C)   A higher sales tax on automobiles.
D)   A decrease in the number of sellers.

Question 3

Tickets to a sporting event go on sale and sell out almost instantly. This implies that

Accepted Answer

A)   There are too many tickets to the event.
B)   The price for the tickets is below the equilibrium price.
C)   The tickets must be very expensive.
D)   There is a surplus of tickets.

Question 4

Which of the following is a determinant of supply?

Accepted Answer

A)   Consumer tastes or preferences.
B)   The prices of the factors of production.
C)   Income.
D)   Number of buyers.

Question 5

Assume a series of forest fires reduces the supply of lumber, which is an input in the production of wooden bats. Baseballs and wooden bats are complements. If the price of wooden bats increases, we can expect the

Accepted Answer

A)   Demand for baseballs to decrease.
B)   Supply of baseballs to decrease.
C)   Demand for baseballs to increase.
D)   Supply of baseballs to increase.

Question 6

If the government required the actual market price to be fixed at $6 per unit in Figure 3.3,   Figure 3.3 Shifts of Supply and Demand

Accepted Answer

A)   A binding or effective price floor would result.
B)   A binding or effective price ceiling would result.
C)   A nonbinding or noneffective price ceiling would result.
D)   The market would reach equilibrium.

Question 7

Ceteris paribus, if buyers expect the price of airline tickets to fall in the future, then right now there should be

Accepted Answer

A)   An increase in the demand for airline tickets.
B)   A decrease in the supply of airline tickets.
C)   A decrease in the demand for airline tickets.
D)   No change in the supply of or demand for airline tickets because the price is not changing right now.

Question 8

If the prices of the factors used to produce a good change, both the demand curve and the supply curve of the good will shift.

Accepted Answer

A) True 
 B)False

Question 9

Business firms supply goods and services to ____ and purchase factors of production in ____.

Accepted Answer

A)   factor markets; product markets
B)   national markets; factor markets
C)   product markets; factor markets
D)   factor markets; national markets

Question 10

Market demand is determined by all of the following except

Accepted Answer

A)   The number of potential sellers.
B)   Income.
C)   Tastes.
D)   Expectations about future income.

Question 11

One In the News article in the text titled "Students Struggle to Find Final Four Tickets" described how professional scalpers use the Internet to sell hard-to-get tickets to concerts and sporting events. When scalpers resell tickets at prices closer to equilibrium,

Accepted Answer

A)   A market shortage is made larger, and the scalpers reap a profit.
B)   A market shortage is made smaller, and the scalpers reap a profit.
C)   A market shortage is made larger, and the original sellers reap a profit.
D)   A market surplus is made smaller, and the scalpers reap a profit.

Question 12

If there is a shortage at a given price, then

Accepted Answer

A)   That price is the equilibrium price.
B)   That price is greater than the equilibrium price.
C)   That price is less than the equilibrium price.
D)   There is no equilibrium price in the market.

Question 13

Assume two goods are substitutes. Ceteris paribus, a decrease in the price of one good will cause the equilibrium price of the other good to

Accepted Answer

A)   Increase and the equilibrium quantity of the other good to increase.
B)   Increase and the equilibrium quantity of the other good to decrease.
C)   Decrease and the equilibrium quantity of the other good to increase.
D)   Decrease and the equilibrium quantity of the other good to decrease.

Question 14

If the market wage for fast-food restaurants is $4 and the government enforces a minimum wage of $7, the unemployment rate will

Accepted Answer

A)   Increase as quantity of labor supply increases and quantity of labor demand decreases.
B)   Increase as quantity of labor supply decreases and quantity of labor demand increases.
C)   Increase as quantity of labor supply increases and quantity of labor demand increases.
D)   Not be affected by the minimum wage.

Question 15

Suppose there are a series of forest fires that affect the lumber industry while, at the same time, consumers demand more wooden furniture. The wooden furniture market would experience

Accepted Answer

A)   An increase in price and an indeterminate change in quantity.
B)   An increase in price and an increase in quantity.
C)   An increase in quantity and an indeterminate change in price.
D)   A decrease in price and an indeterminate change in quantity.

Question 16

As a result of a shortage,

Accepted Answer

A)   Consumers increase demand for the product.
B)   Producers reduce supply.
C)   Producers increase output and raise price.
D)   Government purchases decrease.

Question 17

A ballet performance had many empty seats. This implies that the

Accepted Answer

A)   Hall where the performance was being held was very large.
B)   Price of the tickets must have been very low because of the low demand.
C)   Ballet group was not very well known.
D)   Price of the tickets must have been above the equilibrium price.

Question 18

If a price is below equilibrium,

Accepted Answer

A)   A shortage will cause the price to fall and the quantity supplied to decrease.
B)   A shortage will cause the price to rise and the quantity supplied to increase.
C)   A surplus will cause the price to fall and the quantity supplied to decrease.
D)   A surplus will cause the price to fall and the quantity supplied to increase.

Question 19

Complete Table 3.1. Then answer the indicated question.   Table 3.1 Individual Demand and Supply Schedules
In Table 3.1, if the price is $4, the market will

Accepted Answer

A)   Be in equilibrium.
B)   Experience a surplus of 30 units.
C)   Experience a shortage of 22 units.
D)   Experience a surplus of 56 units.

Question 20

"Demand" is a statement of actual purchases.

Accepted Answer

A) True 
 B)False

Exam 3: Supply and Demand

If the market wage for fast-food restaurants is $4 and the government enforces a minimum wage of $7, the unemployment rate will

Correct AnswerverifiedShow Answer

Which of the following events would cause a rightward shift in the market supply curve for automobiles?

Correct AnswerverifiedShow Answer

Suppose there are a series of forest fires that affect the lumber industry while, at the same time, consumers demand more wooden furniture. The wooden furniture market would experience

Correct AnswerverifiedShow Answer

As a result of a shortage,

Correct AnswerverifiedShow Answer

Tickets to a sporting event go on sale and sell out almost instantly. This implies that

Correct AnswerverifiedShow Answer

Business firms supply goods and services to ____ and purchase factors of production in ____.

Correct AnswerverifiedShow Answer

If there is a shortage at a given price, then

Correct AnswerverifiedShow Answer

If the government required the actual market price to be fixed at $6 per unit in Figure 3.3, Figure 3.3 Shifts of Supply and Demand

Correct AnswerverifiedShow Answer

Market demand is determined by all of the following except

Correct AnswerverifiedShow Answer

Assume a series of forest fires reduces the supply of lumber, which is an input in the production of wooden bats. Baseballs and wooden bats are complements. If the price of wooden bats increases, we can expect the

Correct AnswerverifiedShow Answer

A ballet performance had many empty seats. This implies that the

Correct AnswerverifiedShow Answer

Complete Table 3.1. Then answer the indicated question. Table 3.1 Individual Demand and Supply Schedules In Table 3.1, if the price is $4, the market will

Correct AnswerverifiedShow Answer

If a price is below equilibrium,

Correct AnswerverifiedShow Answer

Assume two goods are substitutes. Ceteris paribus, a decrease in the price of one good will cause the equilibrium price of the other good to

Correct AnswerverifiedShow Answer

A leftward shift of the market demand curve for HDTVs, ceteris paribus, causes equilibrium price to

Correct AnswerverifiedShow Answer

Ceteris paribus, if buyers expect the price of airline tickets to fall in the future, then right now there should be

Correct AnswerverifiedShow Answer

One In the News article in the text titled "Students Struggle to Find Final Four Tickets" described how professional scalpers use the Internet to sell hard-to-get tickets to concerts and sporting events. When scalpers resell tickets at prices closer to equilibrium,

Correct AnswerverifiedShow Answer

Which of the following is a determinant of supply?

Correct AnswerverifiedShow Answer

"Demand" is a statement of actual purchases.

Correct AnswerverifiedShow Answer

If the prices of the factors used to produce a good change, both the demand curve and the supply curve of the good will shift.

Correct AnswerverifiedShow Answer

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Business firms supply goods and services to and purchase factors of production in .

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