The Exploration of Economics International Edition 5th Edition by Robert – Test Bank

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The Exploration of Economics International Edition 5th Edition by Robert L. Sexton – Test Bank

Chapter 5—Bringing Supply and Demand Together

TRUE/FALSE

1.If the market for Rolex watches is in equilibrium, the quantity of Rolex watches demanded will equal the quantity of Rolex watches supplied.

ANS: T PTS: 1

2.Price reductions will usually result whenever the quantity supplied exceeds the quantity demanded at the current price.

ANS: T PTS: 1

3.If the soccer ball market is in equilibrium at a price of $22 per ball, an increase in the supply of soccer balls will cause a shortage at that price.

ANS: F PTS: 1

4.If the demand for apples increases at the same time the supply of apples falls, the price of apples will tend to fall.

ANS: F PTS: 1

5.An increase in the equilibrium price and the equilibrium quantity would be caused by an increase in supply.

ANS: F PTS: 1

6.When both supply and demand shift in the same direction, the change in the equilibrium quantity traded will be in the same direction as the shifting curves.

ANS: T PTS: 1

7.The main purpose of government price controls is to keep prices from rising above their equilibrium levels.

ANS: F PTS: 1

8.Price floors get their name from the fact that they represent a minimum price below which the legal price cannot fall.

ANS: T PTS: 1

9.Price ceilings cause surpluses.

ANS: F PTS: 1

10.Either a price floor or a price ceiling will result in a smaller quantity exchanged than if the price was at its equilibrium level.

ANS: T PTS: 1

11.An increase in the expected future price of a good may act to increase the present price of the good.

ANS: T PTS: 1

12.If there is a ceiling price below the equilibrium level, a decrease in demand will worsen the shortage.

ANS: F PTS: 1

13.When a demand curve shifts, both the equilibrium price and quantity traded will change in the same direction as a result.

ANS: T PTS: 1

14.When a supply curve shifts, the equilibrium price will change in the opposite direction from the shift in supply and the quantity traded will change in the same direction as the shift in supply.

ANS: T PTS: 1

15.An increase in both the equilibrium price and the equilibrium quantity of a good could not have been caused by a shift in supply.

ANS: T PTS: 1

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