Question 1

Price, which is determined by all buyers and sellers as they interact in the marketplace, allocates the economy's scarce resources.

Accepted Answer

A) True 
 B)False

Question 2

What would an early frost in the orchards of the Annapolis Valley cause?

Accepted Answer

A)  an increase in the demand for apples, increasing price 
B)  an increase in the supply of apples, decreasing price 
C)  a decrease in the demand for apples, decreasing price 
D)  a decrease in the supply of apples, increasing price 
A)  an increase in the demand for apples, increasing price 
B)  an increase in the supply of apples, decreasing price 
C)  a decrease in the demand for apples, decreasing price 
D)  a decrease in the supply of apples, increasing price

Question 3

The market demand is the average of all of the individual demands for a particular good or service.

Accepted Answer

A) True 
 B)False

Question 4

What is another term for equilibrium price?

Accepted Answer

A)  balancing price 
B)  market-clearing price 
C)  cooperative price 
D)  reservation price 
A)  balancing price 
B)  market-clearing price 
C)  cooperative price 
D)  reservation price

Question 5

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also a reduction 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 decrease, but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase, 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 decrease, but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

Question 6

The law of demand states that the quantity demanded of a product is positively related to price.

Accepted Answer

A) True 
 B)False

Question 7

Suppose cupcakes are currently selling for $8 per dozen. The equilibrium price of cupcakes is $10 per dozen. What would we expect?

Accepted Answer

A)  a shortage to exist and the market price of cupcakes to increase 
B)  a shortage to exist and the market price of cupcakes to decrease 
C)  a surplus to exist and the market price of cupcakes to increase 
D)  a surplus to exist and the market price of cupcakes to decrease 
A)  a shortage to exist and the market price of cupcakes to increase 
B)  a shortage to exist and the market price of cupcakes to decrease 
C)  a surplus to exist and the market price of cupcakes to increase 
D)  a surplus to exist and the market price of cupcakes to decrease

Question 8

What would happen to the equilibrium price and quantity of apples if the wages of apple pickers rose and the price of peaches rose?

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 9

What is the term for the behaviour of people as they interact with one another in markets?

Accepted Answer

A)  economics 
B)  interaction 
C)  demand and supply 
D)  social psychology 
A)  economics 
B)  interaction 
C)  demand and supply 
D)  social psychology

Question 10

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following will definitely cause equilibrium quantity to fall?

Accepted Answer

A)  demand increases and supply decreases 
B)  demand and supply both decrease 
C)  demand decreases and supply increases 
D)  demand and supply both increase 
A)  demand increases and supply decreases 
B)  demand and supply both decrease 
C)  demand decreases and supply increases 
D)  demand and supply both increase

Question 12

Figure 4-5  
-Refer to the Figure 4-5. Which of the four graphs represents the market for strawberries after new technology is introduced that helps speed up the harvesting time?

Accepted Answer

A)  graph A 
B)  graph B 
C)  graph C 
D)  graph D 
A)  graph A 
B)  graph B 
C)  graph C 
D)  graph D

Question 13

Which of the following would NOT be a determinant of demand?

Accepted Answer

A)  the price of related goods 
B)  income 
C)  expectations 
D)  the prices of the inputs used to produce the good 
A)  the price of related goods 
B)  income 
C)  expectations 
D)  the prices of the inputs used to produce the good

Question 14

Figure 4-10  
-Refer to the Figure 4-10. What is the movement from point B to point A on the graph called?

Accepted Answer

A)  a decrease in supply 
B)  an increase in supply 
C)  an increase in the quantity supplied 
D)  a decrease in the quantity supplied 
A)  a decrease in supply 
B)  an increase in supply 
C)  an increase in the quantity supplied 
D)  a decrease in the quantity supplied

Question 15

Peterborough is a small university city in Ontario. What happens to the market demand curve for fast food in Peterborough at the end of August each year?

Accepted Answer

A)  It shifts right. 
B)  It shifts left. 
C)  It remains constant but moves down the curve. 
D)  It remains constant but moves up the curve. 
A)  It shifts right. 
B)  It shifts left. 
C)  It remains constant but moves down the curve. 
D)  It remains constant but moves up the curve.

Question 16

Figure 4-7  
-Refer to the Figure 4-7. What does the movement from point A to point B on the graph show?

Accepted Answer

A)  a decrease in demand 
B)  an increase in demand 
C)  a decrease in quantity demanded 
D)  an increase in quantity demanded 
A)  a decrease in demand 
B)  an increase in demand 
C)  a decrease in quantity demanded 
D)  an increase in quantity demanded

Question 17

-Refer to the Table 4-1. If the price were $30, what would happen?

Accepted Answer

A)  A shortage of 90 units would exist and the price would tend to fall. 
B)  A surplus of 45 units would exist and the price would tend to rise. 
C)  A surplus of 45 units would exist and the price would tend to fall. 
D)  A shortage of 90 units would exist and the price would tend to rise. 
A)  A shortage of 90 units would exist and the price would tend to fall. 
B)  A surplus of 45 units would exist and the price would tend to rise. 
C)  A surplus of 45 units would exist and the price would tend to fall. 
D)  A shortage of 90 units would exist and the price would tend to rise.

Question 18

Figure 4-1  
-Refer to the Figure 4-1. What could cause the movement from S1 to S?

Accepted Answer

A)  a decrease in the price of the good 
B)  an improvement in technology 
C)  an increase in income 
D)  an increase in input prices 
A)  a decrease in the price of the good 
B)  an improvement in technology 
C)  an increase in income 
D)  an increase in input prices

Question 19

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

Accepted Answer

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

Question 20

-Refer to the Table 4-1. If the price were $120, what would happen?

Accepted Answer

A)  A surplus of 50 units would exist and the price would tend to fall. 
B)  A surplus of 10 units would exist and the price would tend to fall. 
C)  A surplus of 25 units would exist and the price would tend to fall. 
D)  A shortage of 25 units would exist and the price would tend to rise. 
A)  A surplus of 50 units would exist and the price would tend to fall. 
B)  A surplus of 10 units would exist and the price would tend to fall. 
C)  A surplus of 25 units would exist and the price would tend to fall. 
D)  A shortage of 25 units would exist and the price would tend to rise.

Price, which is determined by all buyers and sellers as they interact in the marketplace, allocates the economy's scarce resources.

What would an early frost in the orchards of the Annapolis Valley cause?

The market demand is the average of all of the individual demands for a particular good or service.

What is another term for equilibrium price?

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

The law of demand states that the quantity demanded of a product is positively related to price.

Suppose cupcakes are currently selling for $8 per dozen. The equilibrium price of cupcakes is $10 per dozen. What would we expect?

What would happen to the equilibrium price and quantity of apples if the wages of apple pickers rose and the price of peaches rose?

What is the term for the behaviour of people as they interact with one another in markets?

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

Which of the following will definitely cause equilibrium quantity to fall?

Figure 4-5 -Refer to the Figure 4-5. Which of the four graphs represents the market for strawberries after new technology is introduced that helps speed up the harvesting time?

Which of the following would NOT be a determinant of demand?

Figure 4-10 -Refer to the Figure 4-10. What is the movement from point B to point A on the graph called?

Peterborough is a small university city in Ontario. What happens to the market demand curve for fast food in Peterborough at the end of August each year?

Figure 4-7 -Refer to the Figure 4-7. What does the movement from point A to point B on the graph show?

-Refer to the Table 4-1. If the price were $30, what would happen?

Figure 4-1 -Refer to the Figure 4-1. What could cause the movement from S1 to S?

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

-Refer to the Table 4-1. If the price were $120, what would happen?

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

Price, which is determined by all buyers and sellers as they interact in the marketplace, allocates the economy's scarce resources.

What would an early frost in the orchards of the Annapolis Valley cause?

The market demand is the average of all of the individual demands for a particular good or service.

What is another term for equilibrium price?

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

The law of demand states that the quantity demanded of a product is positively related to price.

Suppose cupcakes are currently selling for $8 per dozen. The equilibrium price of cupcakes is $10 per dozen. What would we expect?

What would happen to the equilibrium price and quantity of apples if the wages of apple pickers rose and the price of peaches rose?

What is the term for the behaviour of people as they interact with one another in markets?

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

Which of the following will definitely cause equilibrium quantity to fall?

Figure 4-5 -Refer to the Figure 4-5. Which of the four graphs represents the market for strawberries after new technology is introduced that helps speed up the harvesting time?

Which of the following would NOT be a determinant of demand?

Figure 4-10 -Refer to the Figure 4-10. What is the movement from point B to point A on the graph called?

Peterborough is a small university city in Ontario. What happens to the market demand curve for fast food in Peterborough at the end of August each year?

Figure 4-7 -Refer to the Figure 4-7. What does the movement from point A to point B on the graph show?

-Refer to the Table 4-1. If the price were $30, what would happen?

Figure 4-1 -Refer to the Figure 4-1. What could cause the movement from S1 to S?

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

-Refer to the Table 4-1. If the price were $120, what would happen?

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