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Toàn bộ những gì bạn cần để qua môn kinh tế học, tài liệu này tập hợp những câu hỏi trắc nghiệm mới nhất của kinh tế vi mô năm 2018. Về nội dung tài liệu, với các khái niệm phổ biến và khái quát nhất về kinh tế vi mô cũng như những giải thích về các cơ chế hoạt động của nền kinh tế, bộ giáo trình bao gồm 23 phần cung cấp cho người đọc các kiến thức khá toàn diện và chuyên sâu về các nguyên lý kinh tế học như các lý thuyết cổ điển, các lý thuyết về phát triển: nền kinh tế trong dài hạn, các lý thuyết về vòng tròn kinh tế: nền kinh tế trong ngắn hạn, các yếu tố vi mô ẩn sau kinh tế vĩ mô, các tranh luận về chính sách vĩ mô… Tất cả đều được giải thích và đánh giá bởi một vị giáo sư kinh tế hàng đầu trên thế giới. Các khái niệm trong sách được định nghĩa rất rõ ràng, dễ nắm bắt, dễ hiểu, có tóm tắt các chương tạo điều kiện tốt nhất cho việc ôn tập.
202 Chapter /The Market Forces of Supply and Demand Chapter The Market Forces of Supply and Demand TRUE/FALSE Prices allocate a market economy’s scarce resources ANS: T DIF: REF: 4-0 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Market economies MSC: Definitional In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold ANS: T DIF: REF: 4-0 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Market economies MSC: Definitional A market is a group of buyers and sellers of a particular good or service ANS: T DIF: REF: 4-1 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Markets MSC: Definitional Sellers as a group determine the demand for a product, and buyers as a group determine the supply of a product ANS: F DIF: REF: 4-1 NAT: Analytic LOC: Supply and demand TOP: Demand | Supply MSC: Definitional A yard sale is an example of a market ANS: T DIF: REF: 4-1 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Markets MSC: Applicative A newspaper’s classified ads are an example of a market ANS: T DIF: REF: 4-1 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Markets MSC: Applicative Most markets in the economy are highly competitive ANS: T DIF: REF: 4-1 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Markets MSC: Definitional In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller ANS: T DIF: REF: 4-1 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Competitive markets MSC: Definitional In a competitive market, there are so few buyers and so few sellers that each has a significant impact on the market price ANS: F DIF: REF: 4-1 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Competitive markets MSC: Definitional 10 In a perfectly competitive market, the goods offered for sale are all exactly the same ANS: T DIF: REF: 4-1 NAT: Analytic LOC: Perfect competition TOP: Perfect competition MSC: Definitional 203 Chapter /The Market Forces of Supply and Demand 11 In a perfectly competitive market, buyers and sellers are price setters ANS: F DIF: REF: 4-1 NAT: Analytic LOC: Perfect competition TOP: MSC: Definitional 12 All goods and services are sold in perfectly competitive markets ANS: F DIF: REF: 4-1 NAT: Analytic LOC: Perfect competition MSC: Definitional TOP: Perfect competition Perfect competition 13 If a good or service has only one seller, then the seller is called a monopoly ANS: T DIF: REF: 4-1 NAT: Analytic LOC: Monopoly TOP: Monopoly MSC: Definitional 14 Monopolists are price takers ANS: F DIF: NAT: Analytic LOC: Monopoly REF: TOP: 4-1 Monopoly MSC: Interpretive 15 Local cable TV companies frequently are monopolists ANS: T DIF: REF: 4-1 NAT: Analytic LOC: Monopoly TOP: Monopoly MSC: Definitional 16 The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price ANS: T DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Quantity demanded MSC: Definitional 17 The law of demand is true for most goods in the economy ANS: T DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand MSC: Definitional TOP: Law of demand 18 The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and when the price falls, the quantity demanded falls ANS: F DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Law of demand MSC: Definitional 19 The demand curve is the upward-sloping line relating price and quantity demanded ANS: F DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Demand curve MSC: Definitional 20 Individual demand curves are summed horizontally to obtain the market demand curve ANS: T DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Market demand curve MSC: Definitional 21 The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant ANS: F DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Market demand curve MSC: Definitional 22 If something happens to alter the quantity demanded at any given price, then the demand curve shifts ANS: T DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Demand curve MSC: Definitional Chapter /The Market Forces of Supply and Demand 204 23 A movement upward and to the left along a given demand curve is called a decrease in demand ANS: F DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Demand curve MSC: Interpretive 24 An increase in demand shifts the demand curve to the left ANS: F DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand MSC: Definitional TOP: Demand curve 25 If the demand for a good falls when income falls, then the good is called an inferior good ANS: F DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Normal goods MSC: Definitional 26 When Mario's income decreases, he buys more pasta For Mario, pasta is a normal good ANS: F DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Inferior goods MSC: Applicative 27 A decrease in income will shift the demand curve for an inferior good to the right ANS: T DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Inferior goods MSC: Interpretive 28 An increase in the price of a substitute good will shift the demand curve for a good to the right ANS: T DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Substitutes MSC: Interpretive 29 Baseballs and baseball bats are substitute goods ANS: F DIF: REF: NAT: Analytic LOC: Supply and demand MSC: Applicative 4-2 TOP: Complements 30 A decrease in the price of a complement will shift the demand curve for a good to the left ANS: F DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Complements MSC: Interpretive 31 When an increase in the price of one good lowers the demand for another good, the two goods are called complements ANS: T DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Complements MSC: Definitional 32 Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows ANS: T DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Complements MSC: Applicative 33 If a person expects the price of socks to increase next month, then that person’s current demand for socks will increase ANS: T DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Expectations MSC: Applicative 205 Chapter /The Market Forces of Supply and Demand 34 A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way ANS: F DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Demand curve MSC: Interpretive 35 Whenever a determinant of demand other than price changes, the demand curve shifts ANS: T DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Demand curve MSC: Interpretive 36 An increase in the price of pizza will shift the demand curve for pizza to the left ANS: F DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Demand curve MSC: Applicative 37 Public service announcements, mandatory health warnings on cigarette packages, and the prohibition of cigarette advertising on television are all policies aimed at shifting the demand curve for cigarettes to the right ANS: F DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Demand curve MSC: Applicative 38 Most studies have found that tobacco and marijuana are complements rather than substitutes ANS: T DIF: REF: 4-2 NAT: Analytic LOC: Supply and demand TOP: Complements MSC: Applicative 39 The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price ANS: T DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Quantity supplied MSC: Definitional 40 When the price of a good is high, selling the good is profitable, and so the quantity supplied is large ANS: T DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Law of supply MSC: Definitional 41 When the price of a good is low, selling the good is profitable, and so the quantity supplied is large ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Law of supply MSC: Definitional 42 Price cannot fall so low that some sellers choose to supply a quantity of zero ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Quantity supplied MSC: Interpretive 43 The law of supply states that, other things equal, when the price of a good rises, the quantity supplied of the good falls ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Law of supply MSC: Definitional 44 The law of supply states that, other things equal, when the price of a good falls, the quantity supplied falls as well ANS: T DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Law of supply MSC: Definitional Chapter /The Market Forces of Supply and Demand 206 45 If a higher price means a greater quantity supplied, then the supply curve slopes upward ANS: T DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Supply curve MSC: Definitional 46 Individual supply curves are summed vertically to obtain the market supply curve ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Market supply curve MSC: Definitional 47 The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers’ decisions about how much to sell ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Market supply curve MSC: Definitional 48 If something happens to alter the quantity supplied at any given price, then we move along the fixed supply curve to a new quantity supplied ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Supply curve MSC: Interpretive 49 A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Supply | Quantity supplied MSC: Interpretive 50 A decrease in supply shifts the supply curve to the left ANS: T DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand MSC: Definitional TOP: Supply curve 51 A reduction in an input price will cause a change in quantity supplied, but not a change in supply ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Input prices MSC: Interpretive 52 An increase in the price of ink will shift the supply curve for pens to the left ANS: T DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Input prices MSC: Applicative 53 If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Technology MSC: Interpretive 54 Advances in production technology typically reduce firms’ costs ANS: T DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: MSC: Interpretive 55 Technology If a company making frozen orange juice expects the price of its product to be higher next month, it will supply more to the market this month ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Expectations MSC: Applicative 207 Chapter /The Market Forces of Supply and Demand 56 When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Expectations MSC: Interpretive 57 An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Supply curve MSC: Interpretive 58 Whenever a determinant of supply other than price changes, the supply curve shifts ANS: T DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Supply curve MSC: Interpretive 59 A decrease in the price of pizza will shift the supply curve for pizza to the left ANS: F DIF: REF: 4-3 NAT: Analytic LOC: Supply and demand TOP: Supply curve MSC: Applicative 60 Supply and demand together determine the price and quantity of a good sold in a market ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Supply and demand TOP: Equilibrium MSC: Definitional 61 A market’s equilibrium is the point at which the supply and demand curves intersect ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Supply and demand TOP: Equilibrium MSC: Definitional 62 At the equilibrium price, quantity demanded is equal to quantity supplied ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Equilibrium MSC: Definitional 63 The equilibrium price is the same as the market-clearing price ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Equilibrium MSC: Definitional 64 At the equilibrium price, buyers have bought all they want to buy, but sellers have not sold all they want to sell ANS: F DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Equilibrium MSC: Definitional 65 The actions of buyers and sellers naturally move markets toward equilibrium ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Equilibrium MSC: Definitional 66 When the market price is above the equilibrium price, the quantity of the good demanded exceeds the quantity supplied ANS: F DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Equilibrium MSC: Definitional 67 When the market price is above the equilibrium price, suppliers are unable to sell all they want to sell ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Equilibrium MSC: Definitional 68 A surplus is the same as an excess demand ANS: F DIF: REF: NAT: Analytic LOC: Supply and demand MSC: Definitional 4-4 TOP: Surplus Chapter /The Market Forces of Supply and Demand 208 69 Sellers respond to a surplus by cutting their prices ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Supply and demand MSC: Definitional 70 Price will rise to eliminate a surplus ANS: F DIF: NAT: Analytic LOC: Equilibrium REF: TOP: 4-4 Surplus TOP: Surplus MSC: Interpretive 71 When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus and market price will likely rise in the future to eliminate the surplus ANS: F DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Surplus MSC: Interpretive 72 When the market price is below the equilibrium price, the quantity of the good demanded exceeds the quantity supplied ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Equilibrium MSC: Definitional 73 When the market price is below the equilibrium price, suppliers are unable to sell all they want to sell ANS: F DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Equilibrium MSC: Definitional 74 A shortage is the same as an excess demand ANS: T DIF: REF: NAT: Analytic LOC: Supply and demand MSC: Definitional 4-4 75 Sellers respond to a shortage by cutting their prices ANS: F DIF: REF: 4-4 NAT: Analytic LOC: Supply and demand MSC: Definitional 76 Price will rise to eliminate a shortage ANS: T DIF: NAT: Analytic LOC: Equilibrium REF: TOP: 4-4 Shortage TOP: Shortage TOP: Shortage MSC: Interpretive 77 When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage and market price will likely rise in the future to eliminate the shortage ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Shortage MSC: Interpretive 78 Surpluses drive price up while shortages drive price down ANS: F DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Shortage | Surplus MSC: Interpretive 79 A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Shortage | Surplus MSC: Interpretive 80 In a market, the price of any good adjusts until quantity demanded equals quantity supplied ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Equilibrium MSC: Interpretive 81 When a supply curve or a demand curve shifts, the equilibrium price and equilibrium quantity change ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Equilibrium TOP: Equilibrium MSC: Definitional 209 Chapter /The Market Forces of Supply and Demand 82 Demand refers to the amount buyers wish to buy, whereas the quantity demanded refers to the position of the demand curve ANS: F DIF: REF: 4-4 NAT: Analytic LOC: Supply and demand TOP: Demand | Quantity demanded MSC: Definitional 83 Supply refers to the position of the supply curve, whereas the quantity supplied refers to the amount suppliers wish to sell ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Supply and demand TOP: Supply | Quantity supplied MSC: Definitional 84 It is not possible for demand and supply to shift at the same time ANS: F DIF: REF: 4-4 NAT: Analytic LOC: Supply and demand TOP: MSC: Interpretive Supply | Demand 85 A decrease in demand will cause a decrease in price, which will cause a decrease in supply ANS: F DIF: REF: 4-4 NAT: Analytic LOC: Supply and demand TOP: Equilibrium MSC: Interpretive 86 An increase in demand will cause an increase in price, which will cause an increase in quantity supplied ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Supply and demand TOP: Equilibrium MSC: Interpretive 87 An increase in supply will cause a decrease in price, which will cause an increase in demand ANS: F DIF: REF: 4-4 NAT: Analytic LOC: Supply and demand TOP: Equilibrium MSC: Interpretive 88 A decrease in supply will cause an increase in price, which will cause a decrease in quantity demanded ANS: T DIF: REF: 4-4 NAT: Analytic LOC: Supply and demand TOP: Equilibrium MSC: Interpretive 89 In a market economy, prices are the signals that guide the allocation of scarce resources ANS: T DIF: REF: 4-5 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Market economies MSC: Definitional SHORT ANSWER a What is the difference between a "change in demand" and a "change in quantity demanded?" Graph your answer b For each of the following changes, determine whether there will be a change in quantity demanded or a change in demand i a change in the price of a related good ii a change in tastes iii a change in the number of buyers iv a change in price v a change in consumer expectations vi a change in income ANS: a b A change in demand refers to a shift of the demand curve A change in quantity demanded refers to a movement along a fixed demand curve A change in price causes a change in quantity demanded All of the other changes listed shift the demand curve Chapter /The Market Forces of Supply and Demand 210 A change in quantity demanded price A change in demand price D D quantity DIF: REF: LOC: Supply and demand MSC: Interpretive 4-2 D' quantity NAT: TOP: Analytic Demand | Quantity demanded a b What is the difference between a "change in supply" and a "change in quantity supplied?" Graph your answer For each of the following changes, determine whether there will be a change in quantity supplied or a change in supply i a change in input costs ii a change in producer expectations iii a change in price iv a change in technology v a change in the number of sellers ANS: a b A change in supply refers to a shift of the supply curve A change in quantity supplied refers to a movement along a fixed supply curve A change in price causes a change in quantity supplied All of the other changes listed shift the supply curve A change in quantity supplied price A change in supply price S S quantity DIF: REF: LOC: Supply and demand MSC: Interpretive 4-3 S' quantity NAT: TOP: Analytic Supply | Quantity supplied 211 Chapter /The Market Forces of Supply and Demand a Price Quantity Demanded Per Month 6,000 8,000 10,000 12,000 14,000 $5 $4 $3 $2 $1 b c d Given the table below, graph the demand and supply curves for flashlights Make certain to label the equilibrium price and equilibrium quantity Quantity Supplied Per Month 10,000 8,000 6,000 4,000 2,000 What is the equilibrium price and the equilibrium quantity? Suppose the price is currently $5 What problem would exist in the market? What would you expect to happen to price? Show this on your graph Suppose the price is currently $2 What problem would exist in the market? What would you expect to happen to price? Show this on your graph ANS: a price S Surplus of 4000 4.5 Pe 3.5 2.5 Shortage of 8000 1.5 D 0.5 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 11000 12000 quantity Qe b c d The equilibrium price (Pe) is $4 and the equilibrium quantity (Qe) is 8,000 A surplus of 4,000 flashlights would be the problem in the market, and we would expect the price to fall A shortage of 8,000 flashlights would be the problem in the market, and we would expect the price to rise DIF: REF: LOC: Supply and demand MSC: Applicative 4-4 NAT: TOP: Analytic Equilibrium | Shortage | Surplus Fill in the table below, showing whether equilibrium price and equilibrium quantity go up, go down, stay the same, or change ambiguously No Change in Supply No Change in Demand An Increase in Demand A Decrease in Demand An Increase in Supply A Decrease in Supply 277 Chapter /The Market Forces of Supply and Demand 100 Which of the following would increase in response to a decrease in the price of ironing boards? a b c d the quantity of irons demanded at each possible price of irons the equilibrium quantity of irons the equilibrium price of irons All of the above are correct ANS: D NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Applicative 101 Saddle shoes are not popular right now, so very few are being produced If saddle shoes become popular, then how will this affect the market for saddle shoes? a b c d The supply curve for saddle shoes will shift right, which will create a shortage at the current price That will increase price, which will decrease quantity demanded and increase quantity supplied The new market equilibrium will be at a higher price and higher quantity The supply curve for saddle shoes will shift right, which will create a surplus at the current price That will decrease price, which will increase quantity demanded and decrease quantity supplied The new market equilibrium will be at a lower price and higher quantity The demand curve for saddle shoes will shift right, which will create a shortage at the current price That will increase price, which will decrease quantity demanded and increase quantity supplied The new market equilibrium will be at a higher price and higher quantity The demand curve for saddle shoes will shift right, which will create a surplus at the current price That will decrease price, which will increase quantity demanded and decrease quantity supplied The new market equilibrium will be at a lower price and higher quantity ANS: C NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 102 If the supply of a product increases, then we would expect a b c d equilibrium price to increase and equilibrium quantity to decrease equilibrium price to decrease and equilibrium quantity to increase equilibrium price and equilibrium quantity both to increase equilibrium price and equilibrium quantity both to decrease ANS: B NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive 103 If the supply of a product decreases, then we would expect a b c d equilibrium price to increase and equilibrium quantity to decrease equilibrium price to decrease and equilibrium quantity to increase equilibrium price and equilibrium quantity both to increase equilibrium price and equilibrium quantity both to decrease ANS: A NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive 104 A decrease in input costs to firms in a market will result in a b c d a decrease in equilibrium price and an increase in equilibrium quantity a decrease in equilibrium price and a decrease in equilibrium quantity an increase in equilibrium price and a decrease in equilibrium quantity an increase in equilibrium price and an increase in equilibrium quantity ANS: A NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive 105 Suppose there is an earthquake that destroys several corn canneries Which of the following would not be a direct result of this event? a b c d Sellers would not be able to produce and sell as much as before at each relevant price The supply would decrease Buyers would not be willing to buy as much as before at each relevant price The equilibrium price would rise ANS: C NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Applicative Chapter /The Market Forces of Supply and Demand 278 106 An early frost in the vineyards of Napa Valley would cause a b c d an increase in the demand for wine, increasing price an increase in the supply of wine, decreasing price a decrease in the demand for wine, decreasing price a decrease in the supply of wine, increasing price ANS: D NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Applicative 107 The market for diamond rings is closely linked to the market for high-quality diamonds If a large quantity of high-quality diamonds enters the market, then a b c d the supply curve for diamond rings will shift right, which will create a shortage at the current price That will increase price, which will decrease quantity demanded and increase quantity supplied The new market equilibrium will be at a higher price and higher quantity the supply curve for diamond rings will shift right, which will create a surplus at the current price That will decrease price, which will increase quantity demanded and decrease quantity supplied The new market equilibrium will be at a lower price and higher quantity the demand curve for diamond rings will shift right, which will create a shortage at the current price That will increase price, which will decrease quantity demanded and increase quantity supplied The new market equilibrium will be at a higher price and higher quantity the demand curve for diamond rings will shift right, which will create a surplus at the current price That will decrease price, which will increase quantity demanded and decrease quantity supplied The new market equilibrium will be at a lower price and higher quantity ANS: B NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 108 When supply and demand both increase, equilibrium a b c d price will increase price will decrease quantity may increase, decrease, or remain unchanged price may increase, decrease, or remain unchanged ANS: D NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive 109 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 b c d Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous ANS: B NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive 110 A weaker demand together with a stronger supply would necessarily result in a b c d a lower price a higher price an increase in equilibrium quantity a decrease in equilibrium quantity ANS: A NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive 111 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 b c d Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous ANS: C NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive 279 Chapter /The Market Forces of Supply and Demand 112 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 b c d Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous ANS: D NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive 113 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? a b c d Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous ANS: A NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive 114 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? a b c d Price would fall and the effect on quantity would be ambiguous Price would rise and the effect on quantity would be ambiguous Quantity would fall and the effect on price would be ambiguous Quantity would rise and the effect on price would be ambiguous ANS: A NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Applicative 115 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? a b c d Price will fall and the effect on quantity is ambiguous Price will rise and the effect on quantity is ambiguous Quantity will fall and the effect on price is ambiguous Quantity will rise and the effect on price is ambiguous ANS: D NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 116 What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold? a b c d Price will rise Price will fall Price will stay exactly the same The price change will be ambiguous ANS: D NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 117 New oak tables are normal goods What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the price of wood saws increased? a b c d Price will fall and the effect on quantity is ambiguous Price will rise and the effect on quantity is ambiguous Quantity will fall and the effect on price is ambiguous Quantity will rise and the effect on price is ambiguous ANS: B NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical Chapter /The Market Forces of Supply and Demand 280 118 What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you? a b c d Price will fall and the effect on quantity is ambiguous Price will rise and the effect on quantity is ambiguous Quantity will fall and the effect on price is ambiguous Quantity will rise and the effect on price is ambiguous ANS: B NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 119 Pens are normal goods What will happen to the equilibrium price of pens if the price of pencils rises, consumers experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to rise in the near future, the population increases, fewer firms manufacture pens, and the wages of pen-makers increase? a b c d Price will rise Price will fall Price will stay exactly the same The price change will be ambiguous ANS: A NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 120 What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls, and more firms decide to manufacture traditional film? a b c d Price will fall and the effect on quantity is ambiguous Price will rise and the effect on quantity is ambiguous Quantity will fall and the effect on price is ambiguous Quantity will rise and the effect on price is ambiguous ANS: A NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 121 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 b c d Price will rise Price will fall Price will stay exactly the same The price change will be ambiguous ANS: B NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 122 What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages? a b c d Price will fall and the effect on quantity is ambiguous Price will rise and the effect on quantity is ambiguous Quantity will fall and the effect on price is ambiguous Quantity will rise and the effect on price is ambiguous ANS: C NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 123 Consider the market for new DVDs If DVD players became cheaper, buyers expected DVD prices to fall next year, used DVDs became more expensive, and DVD production technology improved, then we could safely conclude that the equilibrium price of a new DVD would a b c d rise fall stay the same We couldn't be sure what it might 281 Chapter /The Market Forces of Supply and Demand ANS: D NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 124 Which of the following events will definitely cause equilibrium quantity to fall? a b c d demand increases and supply decreases demand and supply both decrease demand decreases and supply increases demand and supply both increase ANS: B NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive 125 Equilibrium quantity will unambiguously decrease when a b c d demand increases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease demand increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease demand decreases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease demand decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease ANS: D NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 126 Which of the following events will definitely cause equilibrium quantity to rise? a b c d demand increases and supply decreases demand and supply both decrease demand decreases and supply increases demand and supply both increase ANS: D NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive 127 Equilibrium quantity will unambiguously increase when a b c d demand increases and supply does not change, when demand does not change and supply increases, and when both demand and supply increase demand increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease demand decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply increase demand decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease ANS: A NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 128 Which of the following events will definitely cause equilibrium price to fall? a b c d demand increases and supply decreases demand and supply both decrease demand decreases and supply increases demand and supply both increase ANS: C NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive Chapter /The Market Forces of Supply and Demand 282 129 Equilibrium price will unambiguously decrease when a b c d demand increases and supply does not change, when demand does not change and supply decreases, and when demand decreases and supply increases simultaneously demand increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously demand decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously demand decreases and supply does not change, when demand does not change and supply increases, and when demand increases and supply decreases simultaneously ANS: C NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 130 Which of the following events will definitely cause equilibrium price to rise? a b c d demand increases and supply decreases demand and supply both decrease demand decreases and supply increases demand and supply both increase ANS: A NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Interpretive 131 Equilibrium price will unambiguously increase when a b c d demand increases and supply does not change, when demand does not change and supply decreases, and when demand decreases and supply increases simultaneously demand increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously demand decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously demand decreases and supply does not change, when demand does not change and supply increases, and when demand increases and supply decreases simultaneously ANS: B NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical 132 Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes (an inferior good) to increase? a b c d an increase in consumer income a decrease in consumer income greater government restrictions on agricultural chemicals fewer government restrictions on agricultural chemicals ANS: B NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Applicative 133 Beef is a normal good You observe that both the equilibrium price and quantity of beef have fallen over time Which of the following explanations would be most consistent with this observation? a b c d Consumers have experienced an increase in income and beef-production technology has improved The price of chicken has risen and the price of steak sauce has fallen New medical evidence has been released that indicates a negative correlation between a person’s beef consumption and his or her longevity The demand curve for beef must be positively sloped ANS: C NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Applicative 283 Chapter /The Market Forces of Supply and Demand 134 During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health As a result, there has been a significant decrease in the amount of beef produced Which of the following best explains the decrease in production? a b c d Beef producers, concerned about the health of their customers, decided to produce relatively less beef Government officials, concerned about consumer health, ordered beef producers to produce relatively less beef Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the equilibrium price of beef, making it less attractive to produce Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace ANS: C NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Applicative 135 Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts? a b c d an increase in the price of wool shirts and a decrease in the price of raw cotton a decrease in the price of wool shirts and a decrease in the price of raw cotton an increase in the price of wool shirts and an increase in the price of raw cotton a decrease in the price of wool shirts and an increase in the price of raw cotton ANS: B NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Applicative 136 Which of the following events would cause the price of oranges to fall? a b c d There is a shortage of oranges An article is published in which it is claimed that tangerines cause a serious disease, and oranges and tangerines are substitutes The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation’s oranges All of the above are correct ANS: C NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Applicative 137 Which of the following events would definitely result in a higher price in the market for Snickers? a b c d Demand for Snickers increases and supply of Snickers decreases Demand for Snickers and supply of Snickers both decrease Demand for Snickers decreases and supply of Snickers increases Demand for Snickers and supply of Snickers both increase ANS: A NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Applicative 138 Which of the following sets of events would most likely cause an increase in the price of a new house? a b c d higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the future ANS: A NAT: Analytic DIF: LOC: Equilibrium REF: TOP: 4-4 Equilibrium MSC: Analytical Chapter /The Market Forces of Supply and Demand 284 Sec05 - The Market Forces of Supply and Demand - Conclusion: How Prices Allocate Resources MULTIPLE CHOICE In any economic system, scarce resources have to be allocated among competing uses Market economies harness the forces of a b c d government to allocate scarce resources supply and demand to allocate scarce resources credit cards to allocate scarce resources nature to allocate scarce resources ANS: B DIF: REF: 4-5 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Market economies MSC: Definitional The signals that guide the allocation of resources in a market economy are a b c d surpluses and shortages quantities government policies prices ANS: D DIF: REF: 4-5 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Market economies MSC: Definitional Who gets scarce resources in a market economy? a b c d the government whoever the government decides gets them whoever wants them whoever is willing and able to pay the price ANS: D DIF: REF: 4-5 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Market economies MSC: Definitional There is no shortage of scarce resources in a market economy because a b c d the government makes shortages illegal resources are abundant in market economies prices adjust to eliminate shortages quantity supplied is always greater than quantity demanded in market economies ANS: C DIF: REF: 4-5 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Market economies MSC: Definitional In a market economy, who or what determines who produces each good and how much is produced? a b c d the government lawyers lotteries prices ANS: D DIF: REF: 4-5 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Market economies MSC: Definitional Which of these statements does not apply to market economies? a b c d Prices prevent decentralized decision making from degenerating into chaos Prices coordinate the actions of millions of people with varying abilities and desires Prices ensure that anyone who wants a product can get it Prices ensure that what needs to get done does in fact get done 285 Chapter /The Market Forces of Supply and Demand ANS: C DIF: REF: 4-5 NAT: Analytic LOC: Markets, market failure, and externalities TOP: Market economies MSC: Interpretive ... the price of coffee changes because the price of coffee is measured on the vertical axis of the graph does not shift when the price of coffee changes because the quantity supplied of coffee is... the price of coffee is measured on the vertical axis of the graph shifts when the price of coffee changes because the quantity supplied of coffee is measured on the horizontal axis of the graph... Supply and demand 4- 3 TOP: Law of supply The law of supply states that, other things equal, a b c d when the price of a good falls, the supply of the good rises when the price of a good rises,