Question 1

You lose your job and, as a result, you buy fewer pizzas. What does this show that you consider pizzas to be?

Accepted Answer

A)  a normal good 
B)  an inferior good 
C)  a luxury good 
D)  a complementary good 
A)  a normal good 
B)  an inferior good 
C)  a luxury good 
D)  a complementary good

Question 2

Figure 4-4  
-Refer to the Figure 4-4. At a price of $20, which of the following would happen?

Accepted Answer

A)  The price would decrease and the quantity would decrease. 
B)  Both price and quantity would remain unchanged. 
C)  The price would decrease and the quantity would increase. 
D)  The price would increase and the quantity would decrease. 
A)  The price would decrease and the quantity would decrease. 
B)  Both price and quantity would remain unchanged. 
C)  The price would decrease and the quantity would increase. 
D)  The price would increase and the quantity would decrease.

Question 3

Figure 4-8  
-Refer to the Figure 4-8. The graph shows the demand for cigarettes. Which most likely happened?

Accepted Answer

A)  The price of marijuana rose. 
B)  Mandatory health warnings were placed on cigarette packages. 
C)  Several foreign countries banned Canadian cigarettes in their countries. 
D)  A tax was placed on cigarettes. 
A)  The price of marijuana rose. 
B)  Mandatory health warnings were placed on cigarette packages. 
C)  Several foreign countries banned Canadian cigarettes in their countries. 
D)  A tax was placed on cigarettes.

Question 4

Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also an increase in input prices. What would we expect to occur in this market?

Accepted Answer

A)  The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous. 
B)  The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous. 
C)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
A)  The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous. 
B)  The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous. 
C)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.

Question 5

Figure 4-3  
-Refer to the Figure 4-3. In this market, what are the equilibrium price and quantity?

Accepted Answer

A)  $8 and 50 
B)  $10 and 50 
C)  $12 and 60 
D)  $14 and 30 
A)  $8 and 50 
B)  $10 and 50 
C)  $12 and 60 
D)  $14 and 30

Question 6

Sugar is a normal good. You observe that both the equilibrium price and quantity of sugar have risen over time. Which of the following would be most consistent with this observation?

Accepted Answer

A)  Consumers have experienced an increase in income and sugar-production technology has improved. 
B)  The price of artificial sweetener has risen and the price of coffee has fallen. 
C)  Consumer tastes have changed so as to prefer sugar less than before. 
D)  The demand curve for sugar must be positively sloped. 
A)  Consumers have experienced an increase in income and sugar-production technology has improved. 
B)  The price of artificial sweetener has risen and the price of coffee has fallen. 
C)  Consumer tastes have changed so as to prefer sugar less than before. 
D)  The demand curve for sugar must be positively sloped.

Question 7

What does the law of demand imply?

Accepted Answer

A)  When price rises, quantity demanded falls. 
B)  When price rises, quantity demanded rises also. 
C)  When price falls, quantity supplied rises. 
D)  When price falls, quantity supplied falls also. 
A)  When price rises, quantity demanded falls. 
B)  When price rises, quantity demanded rises also. 
C)  When price falls, quantity supplied rises. 
D)  When price falls, quantity supplied falls also.

Question 8

Which of the following is NOT a determinant of demand?

Accepted Answer

A)  tastes 
B)  technology 
C)  income 
D)  the price of related goods 
A)  tastes 
B)  technology 
C)  income 
D)  the price of related goods

Question 9

What will happen to the equilibrium price and quantity of landline phone services if new technologies lower the costs of providing such services and, at the same time, alternatives such as the Internet or smart phones have become more popular?

Accepted Answer

A)  price will fall and the effect on quantity is ambiguous 
B)  price will rise and the effect on quantity is ambiguous 
C)  quantity will fall and the effect on price is ambiguous 
D)  quantity will rise and the effect on price is ambiguous 
A)  price will fall and the effect on quantity is ambiguous 
B)  price will rise and the effect on quantity is ambiguous 
C)  quantity will fall and the effect on price is ambiguous 
D)  quantity will rise and the effect on price is ambiguous

Question 10

Figure 4-5  
-Refer to the Figure 4-5. Which of the following is shown in Graph C?

Accepted Answer

A)  a decrease in demand 
B)  a decrease in the number of sellers 
C)  an increase in supply 
D)  an increase in input prices 
A)  a decrease in demand 
B)  a decrease in the number of sellers 
C)  an increase in supply 
D)  an increase in input prices

Question 11

What relationship is shown by the supply schedule?

Accepted Answer

A)  between price and quantity supplied 
B)  between price and quantity demanded 
C)  between supply and quantity 
D)  between profit and price 
A)  between price and quantity supplied 
B)  between price and quantity demanded 
C)  between supply and quantity 
D)  between profit and price

Question 12

Suppose you make jewellery. If the price of silver falls, what would we expect you to do?

Accepted Answer

A)  be willing and able to produce less jewellery than before at each possible price 
B)  be willing and able to produce more jewellery than before at each possible price 
C)  face a greater demand for your jewellery 
D)  face a weaker demand for your jewellery 
A)  be willing and able to produce less jewellery than before at each possible price 
B)  be willing and able to produce more jewellery than before at each possible price 
C)  face a greater demand for your jewellery 
D)  face a weaker demand for your jewellery

Question 13

The behaviour of buyers and sellers drives markets toward equilibrium.

Accepted Answer

A) True 
 B)False

Question 14

Morgan tells you that the price of lattes at the coffee shop will be going up next week. How will you probably respond?

Accepted Answer

A)  by decreasing your current demand for lattes 
B)  by increasing your current demand for lattes 
C)  by not changing your current demand for lattes 
D)  by refusing to ever buy any more lattes at that shop 
A)  by decreasing your current demand for lattes 
B)  by increasing your current demand for lattes 
C)  by not changing your current demand for lattes 
D)  by refusing to ever buy any more lattes at that shop

Question 15

Which of the following would cause both the equilibrium price and equilibrium quantity of no-name cereal (an inferior good) to increase?

Accepted Answer

A)  an increase in consumer income 
B)  a decrease in consumer income 
C)  an increase in the wages for cereal plant workers 
D)  a decrease in harvest yields 
A)  an increase in consumer income 
B)  a decrease in consumer income 
C)  an increase in the wages for cereal plant workers 
D)  a decrease in harvest yields

Question 16

If two goods are complements, what happens if there is a decrease in the price of one good?

Accepted Answer

A)  It increases the quantity demanded of the other good. 
B)  It reduces the demand for the other good. 
C)  It reduces the quantity demanded of the other good. 
D)  It raises the demand for the other good. 
A)  It increases the quantity demanded of the other good. 
B)  It reduces the demand for the other good. 
C)  It reduces the quantity demanded of the other good. 
D)  It raises the demand for the other good.

Question 17

What is the downward-sloping line that relates prices and quantity demanded?

Accepted Answer

A)  demand schedule 
B)  demand curve 
C)  quantity demanded line 
D)  quantity demanded curve 
A)  demand schedule 
B)  demand curve 
C)  quantity demanded line 
D)  quantity demanded curve

Question 18

What type of market is a monopoly?

Accepted Answer

A)  with one seller 
B)  with few sellers 
C)  with one buyer 
D)  with many buyers 
A)  with one seller 
B)  with few sellers 
C)  with one buyer 
D)  with many buyers

Question 19

What are the signals that guide the allocation of resources in a market economy?

Accepted Answer

A)  laws 
B)  buyers and sellers 
C)  property rights 
D)  prices 
A)  laws 
B)  buyers and sellers 
C)  property rights 
D)  prices

Question 20

Market demand is given as Qd = 190 - 2P. Market supply is given as Qs = P + 10. What would result if the market price were $80?

Accepted Answer

A)  a shortage of 30 
B)  a surplus of 60 
C)  a surplus of 30 
D)  a shortage of 60 
A)  a shortage of 30 
B)  a surplus of 60 
C)  a surplus of 30 
D)  a shortage of 60

You lose your job and, as a result, you buy fewer pizzas. What does this show that you consider pizzas to be?

Figure 4-4 -Refer to the Figure 4-4. At a price of $20, which of the following would happen?

Figure 4-8 -Refer to the Figure 4-8. The graph shows the demand for cigarettes. Which most likely happened?

Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also an increase in input prices. What would we expect to occur in this market?

Figure 4-3 -Refer to the Figure 4-3. In this market, what are the equilibrium price and quantity?

Sugar is a normal good. You observe that both the equilibrium price and quantity of sugar have risen over time. Which of the following would be most consistent with this observation?

What does the law of demand imply?

Which of the following is NOT a determinant of demand?

What will happen to the equilibrium price and quantity of landline phone services if new technologies lower the costs of providing such services and, at the same time, alternatives such as the Internet or smart phones have become more popular?

Figure 4-5 -Refer to the Figure 4-5. Which of the following is shown in Graph C?

What relationship is shown by the supply schedule?

Suppose you make jewellery. If the price of silver falls, what would we expect you to do?

The behaviour of buyers and sellers drives markets toward equilibrium.

Morgan tells you that the price of lattes at the coffee shop will be going up next week. How will you probably respond?

Which of the following would cause both the equilibrium price and equilibrium quantity of no-name cereal (an inferior good) to increase?

If two goods are complements, what happens if there is a decrease in the price of one good?

What is the downward-sloping line that relates prices and quantity demanded?

What type of market is a monopoly?

What are the signals that guide the allocation of resources in a market economy?

Market demand is given as Qd = 190 - 2P. Market supply is given as Qs = P + 10. What would result if the market price were $80?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters

Exam 4: The Market Forces of Supply and Demand

You lose your job and, as a result, you buy fewer pizzas. What does this show that you consider pizzas to be?

Figure 4-4 -Refer to the Figure 4-4. At a price of $20, which of the following would happen?

Figure 4-8 -Refer to the Figure 4-8. The graph shows the demand for cigarettes. Which most likely happened?

Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also an increase in input prices. What would we expect to occur in this market?

Figure 4-3 -Refer to the Figure 4-3. In this market, what are the equilibrium price and quantity?

Sugar is a normal good. You observe that both the equilibrium price and quantity of sugar have risen over time. Which of the following would be most consistent with this observation?

What does the law of demand imply?

Which of the following is NOT a determinant of demand?

What will happen to the equilibrium price and quantity of landline phone services if new technologies lower the costs of providing such services and, at the same time, alternatives such as the Internet or smart phones have become more popular?

Figure 4-5 -Refer to the Figure 4-5. Which of the following is shown in Graph C?

What relationship is shown by the supply schedule?

Suppose you make jewellery. If the price of silver falls, what would we expect you to do?

The behaviour of buyers and sellers drives markets toward equilibrium.

Morgan tells you that the price of lattes at the coffee shop will be going up next week. How will you probably respond?

Which of the following would cause both the equilibrium price and equilibrium quantity of no-name cereal (an inferior good) to increase?

If two goods are complements, what happens if there is a decrease in the price of one good?

What is the downward-sloping line that relates prices and quantity demanded?

What type of market is a monopoly?

What are the signals that guide the allocation of resources in a market economy?

Market demand is given as Qd = 190 - 2P. Market supply is given as Qs = P + 10. What would result if the market price were $80?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters