Chapter 4

Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity supplied? https://i.imgur.com/P34Vv0a.png a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)

a. Panel (a)

Refer to Table 4-12. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament and the country club sets the ticket price at $20, then there will be a. a shortage of 300 tickets. b. a surplus of 300 tickets. c. 300 tickets sold. d. 600 tickets unsold.

a. a shortage of 300 tickets.

Equilibrium quantity must increase when demand a. increases and supply does not change, when demand does not change and supply increases, and when both demand and supply increase. b. increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease. c. decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply increase. d. decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.

a. increases and supply does not change, when demand does not change and supply increases, and when both demand and supply increase.

The market demand curve a. is the sum of all individual demand curves. b. is the demand curve for every product in an industry. c. shows the average quantity demanded by individual demanders at each price. d. is always flatter than an individual demand curve.

a. is the sum of all individual demand curves.

If the supply of a product decreases, then 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.

a. to increase and equilibrium quantity to decrease.

Refer to Table 4-11. The equilibrium price and quantity, respectively, are a. $2 and 50 units. b. $6 and 30 units. c. $6 and 60 units. d. $12 and 30 units.

b. $6 and 30 units.

If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise? a. Both the equilibrium price and quantity would increase. b. Both the equilibrium price and quantity would decrease. c. The equilibrium price would increase, and the equilibrium quantity would decrease. d. The equilibrium price would decrease, and the equilibrium quantity would increase.

b. Both the equilibrium price and quantity would decrease.

Suppose that demand for a good increases and, at the same time, supply of the good 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. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

b. Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.

Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market? a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. None of the above is correct.

b. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

Refer to Figure 4-27. Which of the four panels represents the market for winter coats as we progress from winter to spring? https://i.imgur.com/P34Vv0a.png a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)

b. Panel (b)

New cars are normal goods. What will happen to the equilibrium price of new cars if the price of gasoline rises, the price of steel falls, public transportation becomes cheaper and more comfortable, auto-workers accept lower wages, and automobile insurance becomes more expensive? a. Price will rise. b. Price will fall. c. Price will stay exactly the same. d. The price change will be ambiguous.

b. Price will fall.

Refer to Figure 4-14. Which of the following would explain a movement from E1 to E2? a. There is an improvement in the technology used to produce this good. b. The cost of an input to the production of this good increases. c. This good becomes very popular. d. The price of a substitute good decreases.

b. The cost of an input to the production of this good increases.

Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand C in the market for mattresses? a. a decrease in the price of mattresses b. a decrease in the price of custom wooden sleigh bed frames c. a change in consumer tastes away from wooden bedroom furniture d. a decrease in the number of people in the United States

b. a decrease in the price of custom wooden sleigh bed frames

A higher price for batteries would result in a(n) a. increase in the demand for flashlights. b. decrease in the demand for flashlights. c. increase in the demand for batteries. d. decrease in the demand for batteries.

b. decrease in the demand for flashlights.

Which of the following events must cause equilibrium quantity to fall? a. demand increases and supply decreases b. demand and supply both decrease c. demand decreases and supply increases d. demand and supply both increase

b. demand and supply both decrease

At the equilibrium price, the quantity of the good that buyers are willing and able to buy a. is greater than the quantity that sellers are willing and able to sell. b. exactly equals the quantity that sellers are willing and able to sell. c. is less than the quantity that sellers are willing and able to sell. d. Either a) or c) could be correct.

b. exactly equals the quantity that sellers are willing and able to sell.

If Max experiences a decrease in his income, then we would expect Max's demand for a. each good he purchases to remain unchanged. b. normal goods to decrease. c. luxury goods to increase. d. inferior goods to decrease.

b. normal goods to decrease.

A decrease in quantity demanded a. results in a movement downward and to the right along a demand curve. b. results in a movement upward and to the left along a demand curve. c. shifts the demand curve to the left. d. shifts the demand curve to the right.

b. results in a movement upward and to the left along a demand curve.

Refer to Table 4-11. If the price were $4, a a. surplus of 15 units would exist, and price would tend to fall. b. shortage of 25 units would exist, and price would tend to rise. c. surplus of 25 units would exist, and price would tend to fall. d. shortage of 40 units would exist, and price would tend to rise.

b. shortage of 25 units would exist, and price would tend to rise.

Matthew bakes apple pies that he sells at the local farmer's market. If the price of apples increases, the a. supply curve for Matthew's pies will increase. b. supply curve for Matthew's pies will decrease. c. demand curve for Matthew's pies will increase. d. demand curve for Matthew's pies will decrease.

b. supply curve for Matthew's pies will decrease.

Refer to Table 4-11. If the price were $8, a a. shortage of 20 units would exist, and price would tend to rise. b. surplus of 25 units would exist, and price would tend to fall. c. shortage of 25 units would exist, and price would tend to rise. d. surplus of 45 units would exist, and price would tend to fall.

b. surplus of 25 units would exist, and price would tend to fall.

If the supply of a product increases, then 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. to decrease and equilibrium quantity to increase.

Refer to Table 4-1. If the market consists of Michelle, Laura, and Hillary and the price falls by $1, the quantity demanded in the market increases by a. 2 units. b. 3 units. c. 4 units. d. 5 units.

d. 5 units.

Which of the following is not a characteristic of a perfectly competitive market? a. Different sellers sell identical products. b. There are many sellers. c. Sellers must accept the price the market determines. d. All of the above are characteristics of a perfectly competitive market.

d. All of the above are characteristics of a perfectly competitive market.

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded a. applies to most goods in the economy. b. is represented by a downward-sloping demand curve. c. is referred to as the law of demand. d. All of the above are correct.

d. All of the above are correct.

Refer to Figure 4-20. At a price of $15, a. quantity demanded exceeds quantity supplied. b. there is a shortage. c. there is an excess demand. d. All of the above are correct.

d. All of the above are correct.

The current price of blue jeans is $30 per pair, but the equilibrium price of blue jeans is $25 per pair. As a result, a. the quantity supplied of blue jeans exceeds the quantity demanded of blue jeans at the $30 price. b. the equilibrium quantity of blue jeans exceeds the quantity demanded at the $30 price. c. there is a surplus of blue jeans at the $30 price. d. All of the above are correct.

d. All of the above are correct.

Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market? 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. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity demanded? https://i.imgur.com/P34Vv0a.png a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)

d. Panel (d)

Refer to Figure 4-27. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south? https://i.imgur.com/P34Vv0a.png a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)

d. Panel (d)

Which of the following would shift the supply of Packers football jerseys to the right? a. The Packers make it to the Super Bowl. b. The price of the jerseys increases by $15. c. The cost to distribute the jerseys increases. d. The cost of the fabric used to make the jerseys decreases.

d. The cost of the fabric used to make the jerseys decreases.

Which of the following events would cause a movement upward and to the right along the supply curve for mangos? a. The number of sellers of mangos increases. b. There is an advance in technology that reduces the cost of producing mangos. c. The price of fertilizer decreases, and fertilizer is an input in the production of mangos. d. The price of mangos rises.

d. The price of mangos rises.

Which of the following demonstrates the law of supply? a. When leather became more expensive, belt producers decreased their supply of belts. b. When car production technology improved, car producers increased their supply of cars. c. When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters. d. When ketchup prices rose, ketchup sellers increased their quantity supplied of ketchup.

d. When ketchup prices rose, ketchup sellers increased their quantity supplied of ketchup.

If the demand for a product decreases, then 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.

d. and equilibrium quantity to both decrease.

In a perfectly competitive market, at the market price, buyers a. cannot buy all they want, and sellers cannot sell all they want. b. cannot buy all they want, but sellers can sell all they want. c. can buy all they want, but sellers cannot sell all they want. d. can buy all they want, and sellers can sell all they want.

d. can buy all they want, and sellers can sell all they want.

An early frost in the vineyards of Napa Valley would cause a(n) a. increase in the demand for wine, increasing price. b. increase in the supply of wine, decreasing price. c. decrease in the demand for wine, decreasing price. d. decrease in the supply of wine, increasing price.

d. decrease in the supply of wine, increasing price.

An increase in the price of a good will a. increase demand. b. decrease demand. c. increase quantity demanded. d. decrease quantity demanded.

d. decrease quantity demanded.

The difference between a supply schedule and a supply curve is that a supply schedule a. incorporates demand and a supply curve does not. b. incorporates profit and a supply curve does not. c. can shift, but a supply curve cannot shift. d. is a table, and a supply curve is drawn on a graph.

d. is a table, and a supply curve is drawn on a graph.

When supply and demand both increase, equilibrium a. price will increase. b. price will decrease. c. quantity may increase, decrease, or remain unchanged. d. price may increase, decrease, or remain unchanged.

d. price may increase, decrease, or remain unchanged.

Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 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.

d. surplus to exist and the market price of roses to decrease.

Which of the following might cause the supply curve for an inferior good to shift to the right? a. an increase in input prices b. a decrease in consumer income c. an improvement in production technology that makes production of the good more profitable d. a decrease in the number of sellers in the market

c. an improvement in production technology that makes production of the good more profitable

If the demand for a product increases, then 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 both to increase. d. and equilibrium quantity both to decrease.

c. and equilibrium quantity both to increase.

An improvement in production technology will a. increase a firm's costs and increase its supply. b. increase a firm's costs and decrease its supply. c. decrease a firm's costs and increase its supply. d. decrease a firm's costs and decrease its supply.

c. decrease a firm's costs and increase its supply.

Holding all other things constant, a higher price for ski lift tickets would a. increase the number of skiers. b. increase the price of skis. c. decrease the number of skis sold. d. decrease the demand for other winter recreational activities.

c. decrease the number of skis sold.

Refer to Table 4-3. If these are the only four buyers in the market, then when the price increases from $1.00 to $1.50, the market quantity demanded 16 a. decreases by 1.75 units. b. increases by 2 units. c. decreases by 7 units. d. decreases by 24 units.

c. decreases by 7 units.

The supply curve for stand up paddle boards a. shifts when the price of stand up paddle boards changes because the price of stand up paddle boards is measured on the vertical axis of the graph. b. shifts when the price of stand up paddle boards changes because the quantity supplied of stand up paddle boards is measured on the horizontal axis of the graph. c. does not shift when the price of stand up paddle boards changes because the price of stand up paddle boards is measured on the vertical axis of the graph. d. does not shift when the price of stand up paddle boards changes because the price of stand up paddle boards is measured on the horizontal axis of the graph.

c. does not shift when the price of stand up paddle boards changes because the price of stand up paddle boards is measured on the vertical axis of the graph.

If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in a(n) a. increase in the demand for Nooks. b. decrease in the demand for Nooks. c. increase in the demand for Kindles. d. decrease in the demand for Kindles.

c. increase in the demand for Kindles.

When a surplus exists in a market, sellers a. raise price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. b. raise price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated. c. lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. d. lower price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated.

c. lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated.

Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in the market for oranges in the United States? a. a freeze in Florida b. a technological advance that allows oranges to ripen faster c. a decrease in the price of apples d. an announcement by the FDA that oranges prevent heart disease

c. a decrease in the price of apples

Which of the following would most likely serve as an example of a monopoly? a. a bakery in a large city b. a bank in a large city c. a local cable television company d. a small group of corn farmers

c. a local cable television company

Which of the following demonstrates the law of demand? a. After Jon got a raise at work, he bought more pretzels at $1.50 per pretzel than he did before his raise. b. Melissa buys fewer muffins at $0.75 per muffin than at $1 per muffin, other things equal. c. Dave buys more donuts at $0.25 per donut than at $0.50 per donut, other things equal. d. Kendra buys fewer Snickers at $0.60 per Snickers after the price of Milky Ways falls to $0.50 per Milky Way.

c. Dave buys more donuts at $0.25 per donut than at $0.50 per donut, other things equal.

Which of the following events must result in a lower price in the market for Snickers? a. Demand for Snickers increases, and supply of Snickers decreases. b. Demand for Snickers and supply of Snickers both decrease. c. Demand for Snickers decreases, and supply of Snickers increases. d. Demand for Snickers and supply of Snickers both increase

c. Demand for Snickers decreases, and supply of Snickers increases.

Suppose that demand for a good decreases and, at the same time, supply of the good 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. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.

Refer to Table 4-3. Whose demand does not obey the law of demand? a. Bert's b. Ernie's c. Grover's d. Oscar's

c. Grover's

Refer to Figure 4-27. Which of the four panels represents the market for cars as a result of the adoption of new technology on assembly lines? https://i.imgur.com/P34Vv0a.png a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)

c. Panel (c)

Which of the following events would cause the price of oranges to fall? a. There is a shortage of oranges. b. The FDA announces that bananas cause strokes, and oranges and bananas are substitutes. c. The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges. d. All of the above are correct.

c. The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's

Which of these statements best represents the law of supply? a. When input prices increase, sellers produce less of the good. b. When production technology improves, sellers produce less of the good. c. When the price of a good decreases, sellers produce less of the good. d. When sellers' supplies of a good increase, the price of the good increases.

c. When the price of a good decreases, sellers produce less of the good.

Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs? a. an increase in the price of DVDs b. a decrease in the price of DVD players c. a change in consumer preferences toward watching movies in movie theaters rather than at home d. an expectation by buyers that their incomes will increase in the very near future

c. a change in consumer preferences toward watching movies in movie theaters rather than at home