Question 1

At an equilibrium price, quantity demanded

Accepted Answer

A)  exceeds quantity supplied.
B)  equals quantity supplied.
C)  is less than quantity supplied.
D)  Any of the above is possible.

Question 2

Any factor that shifts the demand curve to the left but does not affect the supply curve will lower the equilibrium price and raise the equilibrium quantity.

Accepted Answer

A) True 
 B)False

Question 3

When the market price is above equilibrium then ____ and when the market price is below equilibrium, then ____.

Accepted Answer

A)  quantity demanded is greater than quantity supplied; quantity supplied is greater than quantity demanded.
B)  quantity supplied is greater than quantity demanded; quantity supplied is greater than quantity demanded.
C)  quantity supplied is greater than quantity demanded; quantity demanded is greater than quantity supplied
D)  the market is in equilibrium; the market is in equilibrium.

Question 4

Figure 4-4 
-An increase in demand will have what effect on equilibrium price and quantity?

Accepted Answer

A)  Price will increase; quantity will decrease.
B)  Price will decrease; quantity will increase.
C)  Both price and quantity will increase.
D)  Both price and quantity will decrease.

Question 5

Tampering with the price mechanism

Accepted Answer

A)  can be efficient for a while.
B)  cannot be attempted in a market economy.
C)  can enhance societal welfare if done properly.
D)  often produces undesired side effects.

Question 6

A decrease in price of a certain good most likely will lead to

Accepted Answer

A)  an increase in quantity demanded and an increase in the demand for that good.
B)  an increase in quantity demanded but no change in the demand for that good.
C)  an increase in demand but no change in quantity demanded.
D)  no change in demand and no change in quantity demanded.

Question 7

If we observe a market where the quantity supplied exceeds the quantity demanded, but the market price does not fall, then one explanation for this observation is

Accepted Answer

A)  the market has a price ceiling in place.
B)  consumers don't really like this product.
C)  the market has a price floor in place.
D)  sellers must produce a minimum quantity of the good, regardless of the demand for the product.

Question 8

The position of a demand curve is unaffected by changes in the price of the good.

Accepted Answer

A) True 
 B)False

Question 9

Rent controls and controls on other prices often aggravate the very problem they are intended to solve.

Accepted Answer

A) True 
 B)False

Question 10

Price supports increase the supply of affordable milk for U.S.families.

Accepted Answer

A) True 
 B)False

Question 11

If the price of a good rises, supply will

Accepted Answer

A)  increase.
B)  decrease.
C)  not change.
D)  the answer depends upon the demand in the market.

Question 12

Governments of market-oriented economies never tamper with the price mechanism.

Accepted Answer

A) True 
 B)False

Question 13

The interest rate is the price borrowers pay to borrow money.Key interest rates are controlled by the Federal Reserve System.If the Federal Reserve acts to reduce interest rates, economists would expect the quantity of money demanded to

Accepted Answer

A)  increase.
B)  decrease.
C)  not change.
D)  not change, although the demand schedule itself will shift outward.

Question 14

1 B) P2 C) P3 D) There is no equilibrium price in the diagram." class="answers-bank-image d-inline" rel="preload" >
-Which price in Figure 4-21 is equilibrium?

Accepted Answer

A)  P1
B)  P2
C)  P3
D)  There is no equilibrium price in the diagram.

Question 15

-In Figure 4-18, there would be a shortage of T-shirts if the price were

Accepted Answer

A)  $10 and the market price will rise.
B)  $8 and the market will tend toward equilibrium.
C)  below $8 and the shortage persists.
D)  between $8 and $6 and the shortage will get larger.

Question 16

American consumers learn that grape consumption can reduce the incidence of heart disease.Everything else being equal, this will cause the

Accepted Answer

A)  price of grapes to fall and decrease the quantity supplied.
B)  supply of grapes to fall and the quantity demanded to increase.
C)  quantity supplied of grapes to fall.
D)  demand curve for grapes to shift to the right and increase the quantity supplied.

Question 17

An upward-sloping supply curve shows that

Accepted Answer

A)  buyers are willing to pay more for a scarce product.
B)  suppliers are willing to increase production of their goods if they can receive higher prices for them.
C)  buyers are unaffected by sellers' costs of production.
D)  the price of a product is not influenced by the price buyers are willing to pay.
E)  at higher prices, an envy effect begins to affect the demand curve.

Question 18

Drawing the supply curve and the demand curve on the same graph helps show how price is determined.

Accepted Answer

A) True 
 B)False

Question 19

A shift of the demand curve for a good occurs whenever new technologies make inputs used in producing that good available at lower prices.

Accepted Answer

A) True 
 B)False

Question 20

The unemployment of some groups, such as low-skill workers, may increase as a result of the imposition of a minimum wage.

Accepted Answer

A) True 
 B)False

Exam 4: Supply and Demand: an Initial Look

-In Figure 4-18, there would be a shortage of T-shirts if the price were

Correct AnswerverifiedShow Answer

Governments of market-oriented economies never tamper with the price mechanism.

Correct AnswerverifiedShow Answer

The unemployment of some groups, such as low-skill workers, may increase as a result of the imposition of a minimum wage.

Correct AnswerverifiedShow Answer

Rent controls and controls on other prices often aggravate the very problem they are intended to solve.

Correct AnswerverifiedShow Answer

An upward-sloping supply curve shows that

Correct AnswerverifiedShow Answer

Tampering with the price mechanism

Correct AnswerverifiedShow Answer

Drawing the supply curve and the demand curve on the same graph helps show how price is determined.

Correct AnswerverifiedShow Answer

The interest rate is the price borrowers pay to borrow money.Key interest rates are controlled by the Federal Reserve System.If the Federal Reserve acts to reduce interest rates, economists would expect the quantity of money demanded to

Correct AnswerverifiedShow Answer

Price supports increase the supply of affordable milk for U.S.families.

Correct AnswerverifiedShow Answer

American consumers learn that grape consumption can reduce the incidence of heart disease.Everything else being equal, this will cause the

Correct AnswerverifiedShow Answer

Any factor that shifts the demand curve to the left but does not affect the supply curve will lower the equilibrium price and raise the equilibrium quantity.

Correct AnswerverifiedShow Answer

If we observe a market where the quantity supplied exceeds the quantity demanded, but the market price does not fall, then one explanation for this observation is

Correct AnswerverifiedShow Answer

-Which price in Figure 4-21 is equilibrium?

Correct AnswerverifiedShow Answer

The position of a demand curve is unaffected by changes in the price of the good.

Correct AnswerverifiedShow Answer

When the market price is above equilibrium then ____ and when the market price is below equilibrium, then ____.

Correct AnswerverifiedShow Answer

At an equilibrium price, quantity demanded

Correct AnswerverifiedShow Answer

A decrease in price of a certain good most likely will lead to

Correct AnswerverifiedShow Answer

Figure 4-4 -An increase in demand will have what effect on equilibrium price and quantity?

Correct AnswerverifiedShow Answer

If the price of a good rises, supply will

Correct AnswerverifiedShow Answer

A shift of the demand curve for a good occurs whenever new technologies make inputs used in producing that good available at lower prices.

Correct AnswerverifiedShow Answer

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When the market price is above equilibrium then and when the market price is below equilibrium, then .

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