Question 1

Which of the following events must cause equilibrium price to fall?

Accepted Answer

A)  demand increases and supply decreases
B)  demand and supply both decrease
C)  demand decreases and supply increases
D)  demand and supply both increaseE) B) and C)
F) A) and D)

Question 2

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities. A to SB. D) SB to SA." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-25.All else equal,an increase in the price of the pulp used in the paper production process would cause a move from

Accepted Answer

A)  x to y.
B)  y to x.
C)  SA to SB.
D)  SB to SA.E) A) and D)
F) B) and C)

Question 3

Which of the following would increase in response to a increase in the price of ironing boards?

Accepted Answer

A)  the quantity of irons demanded at each possible price of irons
B)  the equilibrium quantity of irons
C)  the equilibrium price of irons
D)  None of the above is correct.E) None of the above
F) C) and D)

Question 4

A decrease in input costs to firms in a market will result in a(n)

Accepted Answer

A)  decrease in equilibrium price and an increase in equilibrium quantity.
B)  decrease in equilibrium price and a decrease in equilibrium quantity.
C)  increase in equilibrium price and a decrease in equilibrium quantity.
D)  increase in equilibrium price and an increase in equilibrium quantity.E) A) and D)
F) B) and C)

Question 5

Figure 4-26 
-Refer to Figure 4-26.Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

Accepted Answer

A)  Point A to Point B
B)  Point C to Point B
C)  Point C to Point D
D)  Point A to Point DE) A) and C)
F) C) and D)

Question 6

Suppose roses are currently selling for $20 per dozen,but the equilibrium price of roses is $30 per dozen.We would expect a

Accepted Answer

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.E) B) and C)
F) All of the above

Question 7

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. A to DB. B) DB to DA. C) x to y. D) y to x." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-24.All else equal,a sale on chicken would cause a move from

Accepted Answer

A)  DA to DB.
B)  DB to DA.
C)  x to y.
D)  y to x.E) None of the above
F) A) and B)

Question 8

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. A to DB. B) DB to DA. C) x to y. D) y to x." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-24.All else equal,sellers expecting the price of turkey to rise in the future would cause a current move from

Accepted Answer

A)  DA to DB.
B)  DB to DA.
C)  x to y.
D)  y to x.E) C) and D)
F) All of the above

Question 9

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk,which is used to make lattés,and scientists discovered that lattés cause heart attacks?

Accepted Answer

A)  Both the equilibrium price and quantity would increase.
B)  Both the equilibrium price and quantity would decrease.
C)  The equilibrium price would decrease,and the effect on equilibrium quantity would be ambiguous.
D)  The equilibrium quantity would decrease,and the effect on equilibrium price would be ambiguous.E) A) and B)
F) A) and C)

Question 10

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?

Accepted Answer

A)  Price would fall,and the effect on quantity would be ambiguous.
B)  Price would rise,and the effect on quantity would be ambiguous.
C)  Quantity would fall,and the effect on price would be ambiguous.
D)  Quantity would rise,and the effect on price would be ambiguous.E) All of the above
F) A) and D)

Question 11

Figure 4-19 
-Refer to Figure 4-19.If there is currently a shortage of 20 units of the good,then the law of

Accepted Answer

A)  demand predicts that the price will rise by $2 to eliminate the shortage.
B)  supply predicts that the price will rise by $2 to eliminate the shortage.
C)  supply and demand predicts that the price will rise by $2 to eliminate the shortage.
D)  supply and demand predicts that the price will fall by $2 to eliminate the shortage.E) All of the above
F) None of the above

Question 12

If the demand for a product decreases,then we would expect equilibrium price

Accepted Answer

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.E) A) and C)
F) All of the above

Question 13

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

Accepted Answer

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.E) C) and D)
F) None of the above

Question 14

Figure 4-19 
-Refer to Figure 4-19.In this market,equilibrium price and quantity,respectively,are

Accepted Answer

A)  $10 and 30 units.
B)  $10 and 50 units.
C)  $10 and 70 units.
D)  $4 and 50 units.E) B) and D)
F) B) and C)

Question 15

Figure 4-21 
-Refer to Figure 4-21.What is the equilibrium quantity in this market?

Accepted Answer

A)  2.5 units
B)  5 units
C)  7.5 units
D)  10 unitsE) A) and C)
F) B) and C)

Question 16

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices.What would we expect to occur in this market?

Accepted Answer

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.E) None of the above
F) A) and C)

Question 17

Which of the following would cause price to increase?

Accepted Answer

A)  an increase in supply
B)  a decrease in demand
C)  a surplus of the good
D)  a shortage of the goodE) C) and D)
F) A) and B)

Question 18

Figure 4-22 
-Refer to Figure 4-22.What is the equilibrium price in this market?

Accepted Answer

A)  $8
B)  $12
C)  $16
D)  $20E) A) and B)
F) A) and C)

Question 19

Music compact discs are normal goods.What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties,compact disc players become cheaper,more firms start producing music compact discs,and music lovers experience an increase in income?

Accepted Answer

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.E) A) and B)
F) A) and D)

Question 20

Figure 4-20 
-Refer to Figure 4-20.In this market,equilibrium price and quantity,respectively,are

Accepted Answer

A)  $15 and 400 units.
B)  $20 and 600 units.
C)  $25 and 500 units.
D)  $25 and 800 units.E) All of the above
F) C) and D)

Exam 4: The Market Forces of Supply and Demand: Supply and Demand Together

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?

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Music compact discs are normal goods.What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties,compact disc players become cheaper,more firms start producing music compact discs,and music lovers experience an increase in income?

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Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24.All else equal,sellers expecting the price of turkey to rise in the future would cause a current move from

Correct AnswerverifiedShow Answer

A decrease in input costs to firms in a market will result in a(n)

Correct AnswerverifiedShow Answer

Figure 4-26 -Refer to Figure 4-26.Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

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Which of the following would cause price to increase?

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What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk,which is used to make lattés,and scientists discovered that lattés cause heart attacks?

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Figure 4-19 -Refer to Figure 4-19.If there is currently a shortage of 20 units of the good,then the law of

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Which of the following would increase in response to a increase in the price of ironing boards?

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Figure 4-21 -Refer to Figure 4-21.What is the equilibrium quantity in this market?

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What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

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Figure 4-22 -Refer to Figure 4-22.What is the equilibrium price in this market?

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Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices.What would we expect to occur in this market?

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Figure 4-20 -Refer to Figure 4-20.In this market,equilibrium price and quantity,respectively,are

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If the demand for a product decreases,then we would expect equilibrium price

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Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24.All else equal,a sale on chicken would cause a move from

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Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25.All else equal,an increase in the price of the pulp used in the paper production process would cause a move from

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Figure 4-19 -Refer to Figure 4-19.In this market,equilibrium price and quantity,respectively,are

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Which of the following events must cause equilibrium price to fall?

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Suppose roses are currently selling for $20 per dozen,but the equilibrium price of roses is $30 per dozen.We would expect a

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