Question 1

Graph 4-1
 
-In which panel(s)  in Graph 4-1 would there be a shortage for a good at the market price?

Accepted Answer

A)   panel a
B)   panel b
C)   panel a and panel b
D)   neither panel a nor panel bE) A) and B)
F) C) and D) B

Question 2

Why is the demand for luxury goods generally more elastic than for necessities?

Accepted Answer

A necessity is by definition a good or s...

Question 3

The concept of the slope is the best way to measure the responsiveness of demand to changes in its determinants.

Accepted Answer

A) True 
 B)False

Question 4

Tastes and expectations are not determinants of individual demand.

Accepted Answer

A) True 
 B)False

Question 5

The price of any good adjusts until quantity demanded equals quantity supplied.

Accepted Answer

A) True 
 B)False

Question 6

A demand curve is:

Accepted Answer

A)   the upward-sloping line relating the price of the good with the quantity demanded
B)   the upward-sloping line relating price with quantity supplied
C)   the downward-sloping line relating the price of the good with the quantity demanded
D)   the downward-sloping line relating price with quantity suppliedE) A) and B)
F) A) and C) C

Question 7

Water shortages caused by droughts can be lessened by:

Accepted Answer

A)   allowing price to equate the demand for water with the supply of water
B)   restricting water usage of consumers
C)   arresting anyone who wastes water
D)   imposing tight price controls on waterE) None of the above
F) A) and D)

Question 8

The law of demand states that, other things being equal, when the price of a good rises, the quantity demanded of the good falls.

Accepted Answer

A) True 
 B)False

Question 9

In Australia, a public transport operator might be a monopolist.

Accepted Answer

A) True 
 B)False

Question 10

For each of the following products and industries, determine whether the market structure is perfect competition, monopolistic competition, oligopoly or monopoly.
a. mobile phone services
b. soft drinks
c. local water
d. the automobile industry
e. fast food in a city
f. the textbook industry
g. television networks
h. market for second hand cars

Accepted Answer

a. The local telephone service is usuall...

Question 11

Suppose the equilibrium price of bananas is $5 and a price ceiling of $7 is implemented. This will result in:

Accepted Answer

A)   a shortage, as the price ceiling is above the equilibrium price
B)   a surplus, as the price ceiling is above the equilibrium price
C)   no change in the quantity of bananas sold
D)   the demand for bananas to exceed the supply of bananasE) C) and D)
F) B) and D)

Question 12

Demand for fish is higher in India than Australia because:

Accepted Answer

A)   the cost of supplying fish in India is lower than in Australia
B)   there are more buyers in the Australian market
C)   there are more buyers in the Indian market
D)   the cost of supplying fish in India is higher than in AustraliaE) B) and C)
F) None of the above

Question 13

A demand schedule shows how much will be demanded of a good in the future.

Accepted Answer

A) True 
 B)False

Question 14

Given the graph shown, what will be the result in the market if the price was $6, or $5 or $4?

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> At a price of $6 there will b...

Question 15

Graph 4-2
 
-According to Graph 4-2, a binding price ceiling would exist at:

Accepted Answer

A)   any price above $8.00
B)   any price below $6.00
C)   any price above $5.00
D)   any price below $8.00E) A) and B)
F) A) and C)

Question 16

Surpluses drive price up, whereas shortages drive price down.

Accepted Answer

A) True 
 B)False

Question 17

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following would not shift the demand curve for beef?

Accepted Answer

A)   a reduction in the price of cattle farm fencing
B)   a change in the incomes of beef consumers
C)   an effective advertising campaign by pork producers
D)   a widely publicised study that indicates beef increases one's cholesterolE) A) and D)
F) All of the above

Question 19

Taxes are employed by policy makers for two reasons. The first is to raise revenue. The second is to adjust market outcomes.

Accepted Answer

A) True 
 B)False

Question 20

Price controls are:

Accepted Answer

A)   usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers
B)   used to make markets more efficient
C)   nearly always effective in eliminating inequities
D)   established by firms with monopoly powerE) B) and D)
F) B) and C) A

Exam 4: The Market Forces of Supply and Demand

Graph 4-1 -In which panel(s) in Graph 4-1 would there be a shortage for a good at the market price?

Correct Answer
verified
B

Why is the demand for luxury goods generally more elastic than for necessities?

Correct Answer
verified
A necessity is by definition a good or s...
View Answer

The concept of the slope is the best way to measure the responsiveness of demand to changes in its determinants.

Correct Answer
verified

Tastes and expectations are not determinants of individual demand.

Correct Answer
verified

The price of any good adjusts until quantity demanded equals quantity supplied.

Correct Answer
verified

A demand curve is:

Correct Answer
verified
C

Water shortages caused by droughts can be lessened by:

Correct Answer
verified

The law of demand states that, other things being equal, when the price of a good rises, the quantity demanded of the good falls.

Correct Answer
verified

In Australia, a public transport operator might be a monopolist.

Correct Answer
verified

Correct Answer
verified
a. The local telephone service is usuall...
View Answer

Suppose the equilibrium price of bananas is $5 and a price ceiling of $7 is implemented. This will result in:

Correct Answer
verified

Demand for fish is higher in India than Australia because:

Correct Answer
verified

A demand schedule shows how much will be demanded of a good in the future.

Correct Answer
verified

Given the graph shown, what will be the result in the market if the price was $6, or $5 or $4?

Correct Answer
verified
At a price of $6 there will b...
View Answer

Graph 4-2 -According to Graph 4-2, a binding price ceiling would exist at:

Correct Answer
verified

Surpluses drive price up, whereas shortages drive price down.

Correct Answer
verified

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Correct Answer
verified

Which of the following would not shift the demand curve for beef?

Correct Answer
verified

Taxes are employed by policy makers for two reasons. The first is to raise revenue. The second is to adjust market outcomes.

Correct Answer
verified

Price controls are:

Correct Answer
verified
A

Exam 4: The Market Forces of Supply and Demand

Graph 4-1 -In which panel(s) in Graph 4-1 would there be a shortage for a good at the market price?

Correct AnswerverifiedB

Why is the demand for luxury goods generally more elastic than for necessities?

Correct AnswerverifiedA necessity is by definition a good or s...View AnswerShow Answer

The concept of the slope is the best way to measure the responsiveness of demand to changes in its determinants.

Correct AnswerverifiedShow Answer

Tastes and expectations are not determinants of individual demand.

Correct AnswerverifiedShow Answer

The price of any good adjusts until quantity demanded equals quantity supplied.

Correct AnswerverifiedShow Answer

A demand curve is:

Correct AnswerverifiedC

Water shortages caused by droughts can be lessened by:

Correct AnswerverifiedShow Answer

The law of demand states that, other things being equal, when the price of a good rises, the quantity demanded of the good falls.

Correct AnswerverifiedShow Answer

In Australia, a public transport operator might be a monopolist.

Correct AnswerverifiedShow Answer

Correct Answerverifieda. The local telephone service is usuall...View AnswerShow Answer

Suppose the equilibrium price of bananas is $5 and a price ceiling of $7 is implemented. This will result in:

Correct AnswerverifiedShow Answer

Demand for fish is higher in India than Australia because:

Correct AnswerverifiedShow Answer

A demand schedule shows how much will be demanded of a good in the future.

Correct AnswerverifiedShow Answer

Given the graph shown, what will be the result in the market if the price was $6, or $5 or $4?

Correct Answerverified At a price of $6 there will b...View AnswerShow Answer

Graph 4-2 -According to Graph 4-2, a binding price ceiling would exist at:

Correct AnswerverifiedShow Answer

Surpluses drive price up, whereas shortages drive price down.

Correct AnswerverifiedShow Answer

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Correct AnswerverifiedShow Answer

Which of the following would not shift the demand curve for beef?

Correct AnswerverifiedShow Answer

Taxes are employed by policy makers for two reasons. The first is to raise revenue. The second is to adjust market outcomes.

Correct AnswerverifiedShow Answer

Price controls are:

Correct AnswerverifiedA

Correct Answer
verified
B

Correct Answer
verified
A necessity is by definition a good or s...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a. The local telephone service is usuall...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
At a price of $6 there will b...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A