Question 1

Which of the following will not shift the market supply curve for corn?

Accepted Answer

A)  a change in the price of corn
B)  a change in the price of soybeans
C)  a change in the price of herbicides and pesticides
D)  a change in storage technology
E)  a change in the number of acres planted in cornF) B) and D)
G) All of the above

Question 2

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes. If these attempts are successful, what will happen to the equilibrium price and quantity of potatoes?

Accepted Answer

A)  Price will increase and quantity decrease.
B)  Price will increase and quantity increase.
C)  Price will decrease and quantity increase.
D)  Price will decrease and quantity decrease.
E)  No change in equilibrium price and quantity will occur.F) B) and E)
G) B) and D)

Question 3

Exhibit 4-14 1 and the supply by S1. Equilibrium price is P2 and equilibrium quantity is Q1. What will the new equilibrium price and quantity be if there is an increase in the birth rate? A) P2 and Q1 B) P1 and Q2 C) P3 and Q4 D) P2 and Q2 E) P4 and Q3" class="answers-bank-image d-inline" rel="preload" > 
-Refer to exhibit 4-14. The market demand curve is given by D1 and the supply by S1. Equilibrium price is P2 and equilibrium quantity is Q1. What will the new equilibrium price and quantity be if there is an increase in the birth rate?

Accepted Answer

A)  P2 and Q1
B)  P1 and Q2
C)  P3 and Q4
D)  P2 and Q2
E)  P4 and Q3F) B) and E)
G) B) and C)

Question 4

An increase in the demand for peanut butter could be caused by a(n)

Accepted Answer

A)  decrease in consumer income
B)  increase in the supply of peanut butter
C)  decrease in the price of bread
D)  drought in Georgia that destroyed 30 percent of the peanut crop
E)  decrease in the price of bolognaF) C) and D)
G) B) and E)

Question 5

Exhibit 4-7  
-Exhibit 4-7 shows a demand curve for dog ownership. If your local government passes an anti-dog-litter law that raises the personal cost of owning a dog from C to C', the quantity of dogs demanded will

Accepted Answer

A)  drop to zero
B)  stay the same
C)  decrease
D)  increase
E)  The answer can only be determined with numbers to analyze.F) A) and B)
G) None of the above

Question 6

There are three consumers in the market for playing cards: Don, John, and Ron. At a price of $2 per pack, the quantities demanded by each are 3, 2, and 1, respectively. At a price of $1.50 per pack, the quantities demanded by each are 4, 5, and 3, respectively. Which of the following is true?

Accepted Answer

A)  The market demand curve for playing cards does not obey the law of demand.
B)  The price decrease causes the quantity demanded in this market to increase by 6.
C)  The price decrease causes John's demand curve to shift the most.
D)  At a price of $1 per pack, the quantity demanded in this market must be 20.
E)  Don's behavior does not obey the law of demand.F) D) and E)
G) C) and E)

Question 7

Suppose a market is in equilibrium and then a price floor is established below the equilibrium price. Which of the following will happen?

Accepted Answer

A)  quantity demanded will increase
B)  a surplus will develop
C)  a shortage will develop
D)  the quantity sold will rise
E)  the market will remain in equilibriumF) B) and E)
G) B) and D)

Question 8

Exhibit 4-4  
-In Exhibit 4-4, suppose a price floor is established at $20.00. What is the result?

Accepted Answer

A)  a shortage of 10 units
B)  a surplus of 10 units
C)  a shortage of 20 units
D)  a surplus of 20 units
E)  there is no change from the situation that exists at the equilibrium priceF) A) and E)
G) None of the above

Question 9

Exhibit 4-11  
-Refer to Exhibit 4-11. If the price increases from P to P', the result will be a(n)

Accepted Answer

A)  shortage
B)  equilibrium
C)  clearing of the market
D)  surplus
E)  excess quantity demandedF) A) and B)
G) C) and E)

Question 10

A price floor set below the equilibrium price will result in a surplus.

Accepted Answer

A) True 
 B)False

Question 11

The market for chewing gum is competitive with a current price of 50 cents per pack and quantity of 100,000 packs. Which of the following events would lead to a new equilibrium price of 40 cents and quantity of 80,000 packs?

Accepted Answer

A)  an increase in the price of other kinds of candy
B)  an increase in the price of the ingredients used to make chewing gum
C)  a decrease in the number of young people in the population
D)  an agreement by workers in the chewing gum industry to work for lower wages
E)  an improvement in chewing gum production technologyF) B) and C)
G) All of the above

Question 12

Which of the following is true of the relationship between price and quantity supplied?

Accepted Answer

A)  There is always an inverse relationship.
B)  More is supplied at lower prices.
C)  Producers work harder and sell more when the price decreases.
D)  There is a direct relationship between price and quantity supplied.
E)  It is always true that a higher price leads to a decrease in quantity supplied.F) D) and E)
G) A) and E)

Question 13

In which of the following situations will the effect upon the equilibrium price of wheat be indeterminate?

Accepted Answer

A)  supply decreases and demand increases
B)  demand decreases and supply increases
C)  demand remains constant and supply increases
D)  supply decreases and demand decreases
E)  supply remains constant and demand increasesF) C) and D)
G) B) and C)

Question 14

If people believe that prices are going to be higher in the future then they are today, they will

Accepted Answer

A)  wait until the future to purchase the things they wand
B)  decrease their demand now
C)  increase their demand now
D)  increase their supply now
E)  save more today so they have the income to buy more in the futureF) A) and D)
G) All of the above

Question 15

The demand for a product is the amount that

Accepted Answer

A)  buyers purchase in the market
B)  buyers are willing to purchase at a given price
C)  sellers are willing to sell at a particular price
D)  buyers are willing and able to purchase at alternative prices
E)  buyers are able to purchase at a specific priceF) None of the above
G) A) and E)

Question 16

The recent increase in popularity of professional basketball has resulted in

Accepted Answer

A)  a decrease in the price of tickets to basketball games
B)  an increase in the pay earned by top pro basketball players
C)  increased competition among pro basketball teams
D)  a rise in the price of college basketball tickets
E)  the bankruptcy of some pro basketball teamsF) A) and D)
G) B) and E)

Question 17

Other things equal, the supply of index cards is likely to be affected by all of the following except one. Which is the exception?

Accepted Answer

A)  the price of wood pulp used in the production of index cards
B)  the technology in the index card production process
C)  the price of index cards
D)  the price of packaging material (a substitute in production) 
E)  the future price of index cards expected by producersF) A) and B)
G) A) and C)

Question 18

Tickets to the Michigan-Notre Dame football game are usually sold out in advance of game day. This suggests that

Accepted Answer

A)  the price of the tickets must be very high or else people would not consider them valuable
B)  the price is set below the equilibrium level
C)  the football stadium is relatively small
D)  everyone who attends the game will enjoy it
E)  the price is determined primarily by the fixed supply of ticketsF) A) and B)
G) C) and D)

Question 19

If demand decreases, then quantity supplied will increase.

Accepted Answer

A) True 
 B)False

Question 20

If good B is a complement to good A, then a decrease in the price of B

Accepted Answer

A)  increases the quantity demanded of A
B)  decreases the demand for A
C)  increases the demand for A
D)  decreases the quantity demanded of A
E)  will cause the demand for B to increaseF) D) and E)
G) None of the above

Exam 4: Demand Supply and Markets

There are three consumers in the market for playing cards: Don, John, and Ron. At a price of $2 per pack, the quantities demanded by each are 3, 2, and 1, respectively. At a price of $1.50 per pack, the quantities demanded by each are 4, 5, and 3, respectively. Which of the following is true?

Correct AnswerverifiedShow Answer

If people believe that prices are going to be higher in the future then they are today, they will

Correct AnswerverifiedShow Answer

A price floor set below the equilibrium price will result in a surplus.

Correct AnswerverifiedShow Answer

Tickets to the Michigan-Notre Dame football game are usually sold out in advance of game day. This suggests that

Correct AnswerverifiedShow Answer

Exhibit 4-11 -Refer to Exhibit 4-11. If the price increases from P to P', the result will be a(n)

Correct AnswerverifiedShow Answer

Exhibit 4-14 -Refer to exhibit 4-14. The market demand curve is given by D1 and the supply by S1. Equilibrium price is P2 and equilibrium quantity is Q1. What will the new equilibrium price and quantity be if there is an increase in the birth rate?

Correct AnswerverifiedShow Answer

An increase in the demand for peanut butter could be caused by a(n)

Correct AnswerverifiedShow Answer

Suppose a market is in equilibrium and then a price floor is established below the equilibrium price. Which of the following will happen?

Correct AnswerverifiedShow Answer

If good B is a complement to good A, then a decrease in the price of B

Correct AnswerverifiedShow Answer

The recent increase in popularity of professional basketball has resulted in

Correct AnswerverifiedShow Answer

Which of the following will not shift the market supply curve for corn?

Correct AnswerverifiedShow Answer

Which of the following is true of the relationship between price and quantity supplied?

Correct AnswerverifiedShow Answer

Exhibit 4-7 -Exhibit 4-7 shows a demand curve for dog ownership. If your local government passes an anti-dog-litter law that raises the personal cost of owning a dog from C to C', the quantity of dogs demanded will

Correct AnswerverifiedShow Answer

The demand for a product is the amount that

Correct AnswerverifiedShow Answer

Other things equal, the supply of index cards is likely to be affected by all of the following except one. Which is the exception?

Correct AnswerverifiedShow Answer

If demand decreases, then quantity supplied will increase.

Correct AnswerverifiedShow Answer

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes. If these attempts are successful, what will happen to the equilibrium price and quantity of potatoes?

Correct AnswerverifiedShow Answer

The market for chewing gum is competitive with a current price of 50 cents per pack and quantity of 100,000 packs. Which of the following events would lead to a new equilibrium price of 40 cents and quantity of 80,000 packs?

Correct AnswerverifiedShow Answer

In which of the following situations will the effect upon the equilibrium price of wheat be indeterminate?

Correct AnswerverifiedShow Answer

Exhibit 4-4 -In Exhibit 4-4, suppose a price floor is established at $20.00. What is the result?

Correct AnswerverifiedShow Answer

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Exhibit 4-14 -Refer to exhibit 4-14. The market demand curve is given by D₁ and the supply by S₁. Equilibrium price is P₂ and equilibrium quantity is Q₁. What will the new equilibrium price and quantity be if there is an increase in the birth rate?

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