AP Micro: Chapter 4 Self-Assessment

d

In a free market, who determines how much of a good will be sold and the price at which it is sold? a. suppliers b. demanders c. the government d. suppliers and demanders together

a

Refer to Figure 4-10. Which of the four graphs represents the market for pizza delivery in a college town in September? a. A b. B c. C d. D

b

Refer to Figure 4-2. The movement from D to D1 is called a. an increase in demand. b. a decrease in demand. c. a decrease in quantity demanded. d. an increase in quantity demanded.

c

Refer to Figure 4-6. The movement from S to S1 is called a. a decrease in supply. b. a decrease in quantity supplied. c. an increase in supply. d. an increase in quantity supplied.

d

Refer to Figure 4-8. If price in this market is currently $14, there would be a a. shortage of 20 units and price would tend to rise. b. surplus of 20 units and price would tend to fall. c. shortage of 40 units and price would tend to rise. d. surplus of 40 units and price would tend to fall.

a

Refer to Figure 4-8. If price in this market is currently $8, quantity supplied would be a. 40 and quantity demanded would be 60. b. 60 and quantity demanded would be 40. c. 50 and quantity demanded would be 50. d. 70 and quantity demanded would be 30.

b

Refer to Figure 4-9. If price is $15, quantity supplied would be a. 200. b. 400. c. 500. d. 700.

d

Suppose roses are currently selling for $40.00 per dozen. The equilibrium price of roses is $30.00 per dozen. We would expect a a. shortage to exist and the market price of roses to increase. b. shortage to exist and the market price of roses to decrease. c. surplus to exist and the market price of roses to increase. d. surplus to exist and the market price of roses to decrease.

b

Suppose that Carolyn receives a pay increase. We would expect a. Carolyn's demand for normal goods to remain unchanged. b. Carolyn's demand for inferior goods to decrease. c. Carolyn's demand for luxury goods to decrease. d. Carolyn's demand for normal goods to decrease.

b

Suppose that demand increases AND supply decreases. What would happen in the market for the good? a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b. Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. c. Both equilibrium price and quantity would increase. d. Both equilibrium price and quantity would decrease.

b

Suppose that the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for a. hair gel to increase. b. razors to increase. c. combs to increase. d. hair dye for men to increase.

c

Buyers and sellers who have no influence on market price are referred to as a. price makers. b. market pawns. c. price takers. d. powerless.

a

A monopoly is a market a. with one seller. b. with few sellers. c. with one buyer. d. where the government sets the price.

d

Alyssa rents 5 movies per month when the price is $3.00 each and 7 movies per month when the price is $2.50. Alyssa has demonstrated the a. law of price. b. law of supply. c. actions of an irrational consumer. d. law of demand.

c

Beef is a normal good. You observe that both the equilibrium price and quantity of beef has fallen over time. Which of the following would be most consistent with this observation? a. Consumers have experienced an increase in income and beef-production technology has improved. b. The price of chicken has risen and the price of steak sauce has fallen. c. Consumer tastes have changed so as to prefer beef less than before. d. The demand curve for beef must be positively sloped.

b

If a seller is supplying a product that is slightly different from that of many close competitors and is able to charge a different price than competitors, then the seller a. is a monopolist. b. is participating in a monopolistically competitive market. c. will eventually have to decrease the price. d. is producing a homogeneous product.

a

If a study by the AMA found that brown sugar caused weight loss while white sugar caused weight gain we would see a. an increase in demand for brown sugar and a decrease in demand for white sugar. b. no change in either demand because weight loss is not a nonprice determinant of demand. c. an increase in demand for brown sugar, but no change in the demand for white sugar. d. a decrease in the demand for white sugar, but no change in the demand for brown sugar.

a

If a surplus exists in a market we know that the actual price is a. above equilibrium price and quantity supplied is greater than quantity demanded. b. above equilibrium price and quantity demanded is greater than quantity supplied. c. below equilibrium price and quantity demanded is greater than quantity supplied. d. below equilibrium price and quantity supplied is greater than quantity demanded.

c

If the demand for a product increases, we would expect equilibrium price a. to increase and equilibrium quantity to decrease. b. to decrease and equilibrium quantity to increase. c. and equilibrium quantity to both increase. d. and equilibrium quantity to both decrease.

b

If the number of sellers in a market increases, the a. demand in that market will increase. b. supply in that market will increase. c. supply in that market will decrease. d. demand in that market will decrease.

b

If the price of a good is low a. firms would increase profit by increasing output. b. quantity supplied could be zero. c. the supply curve for the good will shift to the left. d. firms should raise the price of the product.

a

If there is a shortage of farm laborers, we would expect a. the wages of farm laborers to increase. b. the wages of farm laborers to decrease. c. the prices of farm commodities to decrease. d. a decrease in the demand for substitutes for farm labor.

b

Suppose that the incomes of buyers in a particular market for a normal good decline and there is also a reduction in input prices. What would we expect to occur in this market? a. The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous. b. The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous. c. Both equilibrium price and equilibrium quantity would increase. d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

d

The positive relationship between price and quantity supplied is called a. a market. b. a change in supply. c. the demand curve. d. the law of supply.

c

The side of the market that deals with the willingness and ability to produce and sell is a. demand. b. competition. c. supply. d. a monopoly.

a

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell? a. Price will fall and the effect on quantity is ambiguous. b. Price will rise and the effect on quantity is ambiguous. c. Quantity will fall and the effect on price is ambiguous. d. Quantity will rise and the effect on price is ambiguous.

b

When it comes to people's tastes, economists generally believe that a. tastes are based on forces beyond the realm of economics. b. tastes are based on historical and psychological forces. c. tastes can only be studied through well-constructed, real-life models. d. since tastes do not directly affect demand, there is little need to explain people's tastes.

c

Which of the following is NOT a characteristic of a perfectly competitive market? a. similar products b. numerous sellers c. market power d. numerous buyers

a

Which of the following would be most likely to increase the price of a new house? a. Higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future. b. Lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future. c. Lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future. d. Lower wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the future.

b

You love peanut butter. You hear on the news that 50 % of the peanut crop in the South has been wiped out, which will cause the price to double by the end of the year. As a result, a. your demand for peanut butter will increase by the end of the year. b. your demand for peanut butter increases today. c. your demand for peanut butter falls as you look for a substitute good. d. you decide to give up peanut butter completely.