ECO QUIZ 4

Review Test Submission: Q4, Quiz 4, Chapter 4 ·         Question 1
5 out of 5 points

	In a market economy, supply and demand determine
	Selected Answer: a. both the quantity of each good produced and the price at which it is sold. Answers: a. both the quantity of each good produced and the price at which it is sold. b. the quantity of each good produced but not the price at which it is sold. c. neither the quantity of each good produced nor the price at which it is sold. d. the price at which each good is sold but not the quantity of each good produced.

·         Question 2
5 out of 5 points

	Figure 4-19 Refer to Figure 4-19. If price in this market is currently $14, then there would be a(n)
	Selected Answer: c. excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. Answers: a. surplus of 40 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. b. surplus of 20 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. c. excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. d. excess supply of 20 units. The law of supply and demand predicts that the price will fall from $14 to a lower price.

·         Question 3
5 out of 5 points

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

·         Question 4
5 out of 5 points

	If, at the current price, there is a surplus of a good, then
	Selected Answer: d. sellers are producing more than buyers wish to buy. Answers: a. the price is below the equilibrium price. b. quantity demanded equals quantity supplied. c. the market must be in equilibrium. d. sellers are producing more than buyers wish to buy.

·         Question 5
5 out of 5 points

	In a given market, how are the equilibrium price and the market-clearing price related?
	Selected Answer: b. They are the same price. Answers: a. There is no relationship. b. They are the same price. c. The market-clearing price exceeds the equilibrium price. d. The equilibrium price exceeds the market-clearing price.

·         Question 6
5 out of 5 points

	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?
	Selected Answer: b. Price will fall. Answers: a. Price will stay exactly the same. b. Price will fall. c. The price change will be ambiguous. d. Price will rise.

·         Question 7
5 out of 5 points

	The following table contains a monthly demand schedule for large, single-topping, carry-out pizzas. Price Quantity Demanded $15 A $20 25 If the law of demand applies to these pizzas, then A could be
	Selected Answer: a. 30. Answers: a. 30. b. 0. c. 15. d. 25.

·         Question 8
5 out of 5 points

	When the price of peaches changes, the demand curve for peaches
	Selected Answer: b. does not shift because the price of peaches is measured on the vertical axis of the graph. Answers: a. shifts because the quantity demanded of peaches is measured on the horizontal axis of the graph. b. does not shift because the price of peaches is measured on the vertical axis of the graph. c. shifts because the price of peaches is measured on the vertical axis of the graph. d. does not shift because the price of peaches is measured on the horizontal axis of the graph.

·         Question 9
5 out of 5 points

	You lose your job and, as a result, you buy more frozen pizzas. For you, frozen pizza are a(n)
	Selected Answer: d. inferior good. Answers: a. luxury good. b. complementary good. c. normal good. d. inferior good.

·         Question 10
5 out of 5 points

	Table 4-3 Price Bert’s Quantity Demanded Ernie’s Quantity Demanded Grover’s Quantity Demanded Oscar’s Quantity Demanded $0.00 20 16 4 8 $0.50 18 12 6 6 $1.00 14 10 2 5 $1.50 12 8 0 4 $2.00 6 6 0 2 $2.50 0 4 0 0 Refer to Table 4-3. For whom is the good a normal good?
	Selected Answer: d. This cannot be determined from the table. Answers: a. Bert only b. Grover only c. Bert, Ernie, Grover, and Oscar d. This cannot be determined from the table.

·         Question 11
5 out of 5 points

	When quantity demanded decreases at every possible price, the demand curve has
	Selected Answer: b. shifted to the left. Answers: a. not shifted; rather, we have moved along the demand curve to a new point on the same curve. b. shifted to the left. c. shifted to the right. d. not shifted; rather, the demand curve has become flatter.

·         Question 12
5 out of 5 points

	In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of
	Selected Answer: c. supply and demand to allocate scarce resources. Answers: a. credit cards to allocate scarce resources. b. government to allocate scarce resources. c. supply and demand to allocate scarce resources. d. nature to allocate scarce resources.

·         Question 13
5 out of 5 points

	The market supply curve
	Selected Answer: a. represents the sum of the quantities supplied by all the sellers at each price of the good. Answers: a. represents the sum of the quantities supplied by all the sellers at each price of the good. b. represents the sum of the prices that all the sellers are willing to accept for a given quantity of the good. c. is found by vertically adding the individual supply curves. d. slopes downward.

·         Question 14
5 out of 5 points

	Table 4-7 Price Dairy Barn’s Gallons Supplied Dolly’s Dairy’s Gallons Supplied Four Queen’s Gallons Supplied Moo Roo’s Gallons Supplied $0 0 0 0 0 $2 3 4 2 1 $4 6 8 4 2 $6 9 12 6 3 $8 12 16 8 4 $10 15 20 10 5 Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price increases from $4 to $6, the market quantity supplied
	Selected Answer: c. increases by 10 gallons. Answers: a. decreases by 10 gallons. b. increases by 20 gallons. c. increases by 10 gallons. d. decreases by 20 gallons.

·         Question 15
0 out of 5 points

	Which of the following would shift the supply of Green Bay Packers football jerseys to the left?
	Selected Answer: a. The price of the jerseys increases by $15. Answers: a. The price of the jerseys increases by $15. b. The Green Bay Packers make it to the Super Bowl. c. The cost of the fabric used to make the jerseys increases. d. The technology of sewing machines use to make the jerseys improves.

·         Question 16
5 out of 5 points

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

·         Question 17
5 out of 5 points

	The supply curve for portable charcoal grills shifts
	Selected Answer: a. when a determinant of the supply of portable charcoal grills other than the price of portable charcoal grills changes. Answers: a. when a determinant of the supply of portable charcoal grills other than the price of portable charcoal grills changes. b. only when the number of sellers of portable charcoal grills changes. c. when any determinant of the supply of portable charcoal grills changes. d. only when production technology changes.

·         Question 18
5 out of 5 points

	Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?
	Selected Answer: c. There are many buyers and many sellers in all types of markets. Answers: a. Many of the lessons that we learn by studying supply and demand under perfect competition apply in more complicated markets as well. b. Perfectly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions. c. There are many buyers and many sellers in all types of markets. d. Some degree of competition is present in most markets.

·         Question 19
5 out of 5 points

	The market for ice cream is a
	Selected Answer: b. highly competitive market. Answers: a. monopolistic market. b. highly competitive market. c. highly organized market. d. Both b and c are correct.

·         Question 20
5 out of 5 points

	Assume a market is perfectly competitive. When a new producer enters the market, the
	Selected Answer: a. price in the market does not change. Answers: a. price in the market does not change. b. price in the market decreases. c. price in the market increases. d. market is no longer a competitive market.