Question 1

Price ceilings are designed to protect sellers, while price floors are designed to protect buyers.

Accepted Answer

A) True 
 B)False

Question 2

A price above equilibrium always yields a surplus.

Accepted Answer

A) True 
 B)False

Question 3

Table 4-1
Use this table for the following questions.
   Quantity  Quantity  Price‾ Demanded ‾ Supplied‾$101,0005,50092,0005,00083,0004,50074,0004,00065,0003,50056,0003,00047,0002,50038,0002,00029,0001,500110,0001,000\begin{array}{ccc} & 	ext { Quantity } & 	ext { Quantity } \\underline { 	ext { Price} } &  \underline { 	ext { Demanded } } & \underline { 	ext { Supplied} } \\$ 10 & 1,000 & 5,500 \9 & 2,000 & 5,000 \8 & 3,000 & 4,500 \7 & 4,000 & 4,000 \6 & 5,000 & 3,500 \5 & 6,000 & 3,000 \4 & 7,000 & 2,500 \3 & 8,000 & 2,000 \2 & 9,000 & 1,500 \1 & 10,000 & 1,000\end{array} Price​$10987654321​ Quantity  Demanded ​1,0002,0003,0004,0005,0006,0007,0008,0009,00010,000​ Quantity  Supplied​5,5005,0004,5004,0003,5003,0002,5002,0001,5001,000​ 
-Refer to Table 4-1.At $10, what is the surplus?

Accepted Answer

A)   4,500
B)   3,000
C)   1,500
D)   0 E) A) and C)
F) B) and C)

Question 4

A supply curve can be thought of as

Accepted Answer

A)   a graphical display of "market potential."
B)   a graphical representation of the information in a supply schedule.
C)   showing the maximum quantities that firms are able to produce.
D)   a forecasting tool.
E)   All of the above are correct.F) B) and C)
G) A) and E)

Question 5

To construct a supply curve, an economist needs data on price and quantity.Each point on the supply curve is

Accepted Answer

A)   supply of the product.
B)   a quantity supplied at that price.
C)   the amount that people want to buy.
D)   the amount people want to sell to buyers of different incomes.
E)   All of the above are correct.F) A) and B)
G) C) and D)

Question 6

Both demand and supply curves usually have positive slopes.

Accepted Answer

A) True 
 B)False

Question 7

In some markets, demand can be approximated by
 Q = 50 - 5P + 10Y
where Q is quantity, P price per unit, and Y = buyers' income.Supply can be approximated by
 Q =-5 + 10P.
a.If Y = 20, what is equilibrium price and output?
b.If Y rises to 25, what is the new equilibrium price and output?

Accepted Answer

a.Equate the supply and demand equations...

Question 8

Normally, to the extent that a governmental control mechanism succeeds in affecting price, it can be expected to lead to a corresponding

Accepted Answer

A)   reduction in the volume of sales only if the price is forced down.
B)   reduction in the volume of sales if the price is forced down and an increase in the volume of sales if the price is forced up.
C)   decrease in the volume of sales whether the price is forced up or down.
D)   increase in the volume of sales whether the price is forced up or down.E) A) and D)
F) B) and D)

Question 9

Figure 4-4
 
-Assume that Figure 4-4 shows demand for MP₃ players.An increase in the price of music downloads changes demand from

Accepted Answer

A)   D₁ to D₂.
B)   D₂ to D₁.
C)   D₂ to D₃.
D)   D₁ to D₃.E) All of the above
F) A) and B)

Question 10

A supply schedule shows

Accepted Answer

A)   the "market potential" for a product.
B)   how much producers are willing and able to sell at different prices.
C)   possible combinations of output under different conditions.
D)   how much consumers would like to buy at different prices.
E)   All of the above are correct.F) B) and E)
G) B) and D)

Question 11

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.E) A) and B)
F) A) and C)

Question 12

Price ceilings will likely

Accepted Answer

A)   result in the accumulation of surpluses.
B)   increase the volume of transactions as we move along the demand curve.
C)   increase production as producers respond to higher consumer demand at the low ceiling price.
D)   result in the development of black markets.E) B) and D)
F) B) and C)

Question 13

The major drawback of a price ceiling is

Accepted Answer

A)   it causes a surplus.
B)   government regulations of this kind are difficult to enforce.
C)   it causes a shortage.
D)   There is no drawback.E) None of the above
F) A) and B)

Question 14

Table 4-1
Use this table for the following questions.
   Quantity  Quantity  Price‾ Demanded ‾ Supplied‾$101,0005,50092,0005,00083,0004,50074,0004,00065,0003,50056,0003,00047,0002,50038,0002,00029,0001,500110,0001,000\begin{array}{ccc} & 	ext { Quantity } & 	ext { Quantity } \\underline { 	ext { Price} } &  \underline { 	ext { Demanded } } & \underline { 	ext { Supplied} } \\$ 10 & 1,000 & 5,500 \9 & 2,000 & 5,000 \8 & 3,000 & 4,500 \7 & 4,000 & 4,000 \6 & 5,000 & 3,500 \5 & 6,000 & 3,000 \4 & 7,000 & 2,500 \3 & 8,000 & 2,000 \2 & 9,000 & 1,500 \1 & 10,000 & 1,000\end{array} Price​$10987654321​ Quantity  Demanded ​1,0002,0003,0004,0005,0006,0007,0008,0009,00010,000​ Quantity  Supplied​5,5005,0004,5004,0003,5003,0002,5002,0001,5001,000​ 
-Refer to Table 4-1.At $4, what is the shortage?

Accepted Answer

A)   0
B)   1,500
C)   3,000
D)   4,500
E)   6,000 F) A) and E)
G) All of the above

Question 15

A demand schedule's position is determined partly by the supply of a good.

Accepted Answer

A) True 
 B)False

Question 16

Figure 4-10
 
-The rising minimum wage allegedly has reduced the quantity demanded of teenage labor.However, demographics slightly reduced the supply of teenage labor.The U.S.Department of Labor reported that teenage unemployment is an increasing problem.Which graph in Figure 4-10 is consistent with these facts?

Accepted Answer

A)   1
B)   2
C)   3
D)   4E) A) and B)
F) C) and D)

Question 17

A change in the price of a good has no effect on the supply schedule.

Accepted Answer

A) True 
 B)False

Question 18

Figure 4-16
 
-Assume that Figure 4-16 shows the supply of orange juice.A decrease in the wage rate paid to workers in the orange juice industry will shift supply from

Accepted Answer

A)   S1 to S₂.
B)   S₂ to S1.
C)   S₃ to S₂.
D)   S₃ to S1.E) All of the above
F) C) and D)

Question 19

For more than a thousand years, the Catholic Church required its members to abstain from meat on Fridays.Catholics customarily ate fish on Friday.After 1966 abstinence from meat on Fridays was no longer required.Consequently, the

Accepted Answer

A)   demand curve for fish shifted to the right.
B)   demand curve for fish shifted to the left.
C)   demand for meat decreased.
D)   price of fish increased.E) B) and C)
F) A) and B)

Question 20

An important assumption that is made when constructing a demand schedule is that

Accepted Answer

A)   only price and quantity matter in determining demand.
B)   people always want a certain amount of a product.
C)   demand is too important to be left to the economists.
D)   all other determinants of demand are held constant.
E)   demand has a positive slope.F) B) and D)
G) A) and B)

Exam 4: Supply and Demand: An Initial Look

Figure 4-16 -Assume that Figure 4-16 shows the supply of orange juice.A decrease in the wage rate paid to workers in the orange juice industry will shift supply from

Correct Answer
verified

Correct Answer
verified

The major drawback of a price ceiling is

Correct Answer
verified

A change in the price of a good has no effect on the supply schedule.

Correct Answer
verified

A supply schedule shows

Correct Answer
verified

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

Correct Answer
verified

A supply curve can be thought of as

Correct Answer
verified

A price above equilibrium always yields a surplus.

Correct Answer
verified

Correct Answer
verified

Price ceilings will likely

Correct Answer
verified

A demand schedule's position is determined partly by the supply of a good.

Correct Answer
verified

In some markets, demand can be approximated by Q = 50 - 5P + 10Y where Q is quantity, P price per unit, and Y = buyers' income.Supply can be approximated by Q =-5 + 10P. a.If Y = 20, what is equilibrium price and output? b.If Y rises to 25, what is the new equilibrium price and output?

Correct Answer
verified
a.Equate the supply and demand equations...
View Answer

Price ceilings are designed to protect sellers, while price floors are designed to protect buyers.

Correct Answer
verified

Normally, to the extent that a governmental control mechanism succeeds in affecting price, it can be expected to lead to a corresponding

Correct Answer
verified

Figure 4-4 -Assume that Figure 4-4 shows demand for MP₃ players.An increase in the price of music downloads changes demand from

Correct Answer
verified

Correct Answer
verified

Both demand and supply curves usually have positive slopes.

Correct Answer
verified

For more than a thousand years, the Catholic Church required its members to abstain from meat on Fridays.Catholics customarily ate fish on Friday.After 1966 abstinence from meat on Fridays was no longer required.Consequently, the

Correct Answer
verified

To construct a supply curve, an economist needs data on price and quantity.Each point on the supply curve is

Correct Answer
verified

An important assumption that is made when constructing a demand schedule is that

Correct Answer
verified

Exam 4: Supply and Demand: An Initial Look

Figure 4-16 -Assume that Figure 4-16 shows the supply of orange juice.A decrease in the wage rate paid to workers in the orange juice industry will shift supply from

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The major drawback of a price ceiling is

Correct AnswerverifiedShow Answer

A change in the price of a good has no effect on the supply schedule.

Correct AnswerverifiedShow Answer

A supply schedule shows

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A supply curve can be thought of as

Correct AnswerverifiedShow Answer

A price above equilibrium always yields a surplus.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Price ceilings will likely

Correct AnswerverifiedShow Answer

A demand schedule's position is determined partly by the supply of a good.

Correct AnswerverifiedShow Answer

In some markets, demand can be approximated by Q = 50 - 5P + 10Y where Q is quantity, P price per unit, and Y = buyers' income.Supply can be approximated by Q =-5 + 10P. a.If Y = 20, what is equilibrium price and output? b.If Y rises to 25, what is the new equilibrium price and output?

Correct Answerverifieda.Equate the supply and demand equations...View AnswerShow Answer

Price ceilings are designed to protect sellers, while price floors are designed to protect buyers.

Correct AnswerverifiedShow Answer

Normally, to the extent that a governmental control mechanism succeeds in affecting price, it can be expected to lead to a corresponding

Correct AnswerverifiedShow Answer

Figure 4-4 -Assume that Figure 4-4 shows demand for MP₃ players.An increase in the price of music downloads changes demand from

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Both demand and supply curves usually have positive slopes.

Correct AnswerverifiedShow Answer

For more than a thousand years, the Catholic Church required its members to abstain from meat on Fridays.Catholics customarily ate fish on Friday.After 1966 abstinence from meat on Fridays was no longer required.Consequently, the

Correct AnswerverifiedShow Answer

To construct a supply curve, an economist needs data on price and quantity.Each point on the supply curve is

Correct AnswerverifiedShow Answer

An important assumption that is made when constructing a demand schedule is that

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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a.Equate the supply and demand equations...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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