Question 1

What will result from an increase in resource costs to firms in a market?

Accepted Answer

A)  a decrease in equilibrium price and an increase in equilibrium quantity 
B)  a decrease in equilibrium price and a decrease in equilibrium quantity 
C)  an increase in equilibrium price and no change in equilibrium quantity 
D)  an increase in equilibrium price and a decrease in equilibrium quantity 
A)  a decrease in equilibrium price and an increase in equilibrium quantity 
B)  a decrease in equilibrium price and a decrease in equilibrium quantity 
C)  an increase in equilibrium price and no change in equilibrium quantity 
D)  an increase in equilibrium price and a decrease in equilibrium quantity

Question 2

What might be the reason when quantity demanded has increased at every price?

Accepted Answer

A)  The number of buyers in the market has decreased. 
B)  Income has increased and this good is an inferior good. 
C)  The consumer prefers another good more than this good. 
D)  The price of a substitute good has increased. 
A)  The number of buyers in the market has decreased. 
B)  Income has increased and this good is an inferior good. 
C)  The consumer prefers another good more than this good. 
D)  The price of a substitute good has increased.

Question 3

Market demand is given as Qd = 200 - 2P. Market supply is given as Qs = 2P + 40. What would result if the market price were $80?

Accepted Answer

A)  a shortage of 80 
B)  a surplus of 80 
C)  a surplus of 160 
D)  a shortage of 160 
A)  a shortage of 80 
B)  a surplus of 80 
C)  a surplus of 160 
D)  a shortage of 160

Question 4

Suppose you make jewellery. If the price of silver increases, 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 5

Market demand is given as Qd = 200 - 4P. Market supply is given as Qs = 6P. What would result if the market price were $15?

Accepted Answer

A)  a shortage of 50 
B)  a surplus of 50 
C)  a surplus of 200 
D)  a shortage of 200 
A)  a shortage of 50 
B)  a surplus of 50 
C)  a surplus of 200 
D)  a shortage of 200

Question 6

Figure 4-3  
-Refer to the Figure 4-3. If the price in this market is currently $14, what would happen?

Accepted Answer

A)  There would be a shortage of 20 units so producers would increase production. 
B)  There would be a surplus of 20 units and the price would tend to fall. 
C)  There would be a shortage of 40 units so producers would increase production. 
D)  There would be a surplus of 40 units and the price would tend to fall. 
A)  There would be a shortage of 20 units so producers would increase production. 
B)  There would be a surplus of 20 units and the price would tend to fall. 
C)  There would be a shortage of 40 units so producers would increase production. 
D)  There would be a surplus of 40 units and the price would tend to fall.

Question 7

A market is a group of buyers and sellers of a particular product.

Accepted Answer

A) True 
 B)False

Question 8

What is step one in the three-step program for analyzing changes in equilibrium?

Accepted Answer

A)  Decide in which direction the curve shifts. 
B)  Decide whether the event shifts the supply or demand curve. 
C)  Use the supply-and-demand diagram to see how the shift changes the original equilibrium. 
D)  Analyze how equilibrium price and quantity have changed. 
A)  Decide in which direction the curve shifts. 
B)  Decide whether the event shifts the supply or demand curve. 
C)  Use the supply-and-demand diagram to see how the shift changes the original equilibrium. 
D)  Analyze how equilibrium price and quantity have changed.

Question 9

Which of the following is NOT a characteristic of a perfectly competitive market?

Accepted Answer

A)  identical products 
B)  numerous sellers 
C)  price makers 
D)  numerous buyers 
A)  identical products 
B)  numerous sellers 
C)  price makers 
D)  numerous buyers

Question 10

Recent pine beetle infestations that are destroying trees in the western provinces are expected to cause the price of lumber to rise in the next six months. As a result, what can we expect to happen to the supply of lumber?

Accepted Answer

A)  It will fall in six months, but not now. 
B)  It will increase in six months when the price goes up. 
C)  It will fall now. 
D)  It will increase now to meet as much demand as possible. 
A)  It will fall in six months, but not now. 
B)  It will increase in six months when the price goes up. 
C)  It will fall now. 
D)  It will increase now to meet as much demand as possible.

Question 11

Rebecca likes country music concerts today more than she did yesterday. What does this reveal about Rebecca's circumstances?

Accepted Answer

A)  Rebecca must now perceive country music concerts as a luxury. 
B)  Rebecca must have received an increase in income. 
C)  Rebecca must be now willing to pay more than before for country music concerts. 
D)  Rebecca must now perceive country music concerts as a normal good. 
A)  Rebecca must now perceive country music concerts as a luxury. 
B)  Rebecca must have received an increase in income. 
C)  Rebecca must be now willing to pay more than before for country music concerts. 
D)  Rebecca must now perceive country music concerts as a normal good.

Question 12

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?

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 13

Suppose that Carolyn receives a pay increase. What would we expect?

Accepted Answer

A)  Carolyn's demand for normal goods to remain unchanged. 
B)  Carolyn's demand for inferior goods to decrease. 
C)  Carolyn's demand for luxury goods to decrease. 
D)  Carolyn's demand for normal goods to decrease. 
A)  Carolyn's demand for normal goods to remain unchanged. 
B)  Carolyn's demand for inferior goods to decrease. 
C)  Carolyn's demand for luxury goods to decrease. 
D)  Carolyn's demand for normal goods to decrease.

Question 14

Suppose you wish to analyze the change in the equilibrium price of lumber as a result of pine beetle infestations that are destroying trees in the West. What would your first step be?

Accepted Answer

A)  to identify the new equilibrium point 
B)  to decide whether the fires affect the quantity demanded 
C)  to decide whether the fires affect the price 
D)  to decide whether the fires shift demand or supply 
A)  to identify the new equilibrium point 
B)  to decide whether the fires affect the quantity demanded 
C)  to decide whether the fires affect the price 
D)  to decide whether the fires shift demand or supply

Question 15

Figure 4-2  
-Refer to the Figure 4-2. What would happen at a price of $15?

Accepted Answer

A)  There would be a shortage of 200 units. 
B)  There would be a shortage of 400 units. 
C)  There would be a surplus of 200 units. 
D)  There would be a surplus of 400 units. 
A)  There would be a shortage of 200 units. 
B)  There would be a shortage of 400 units. 
C)  There would be a surplus of 200 units. 
D)  There would be a surplus of 400 units.

Question 16

-Refer to the Table 4-1. What would the equilibrium price and quantity be?

Accepted Answer

A)  $60 and 20 
B)  $90 and 50 
C)  $120 and 30 
D)  $150 and 10 
A)  $60 and 20 
B)  $90 and 50 
C)  $120 and 30 
D)  $150 and 10

Question 17

Which of the following would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

Accepted Answer

A)  an increase in supply and demand 
B)  an increase in supply and a decrease in demand 
C)  a decrease in supply and an increase in demand 
D)  a decrease in supply and demand 
A)  an increase in supply and demand 
B)  an increase in supply and a decrease in demand 
C)  a decrease in supply and an increase in demand 
D)  a decrease in supply and demand

Question 18

Which of the following best describes a perfectly competitive market?

Accepted Answer

A)  A seller who charges more than the going price can increase her profit. 
B)  If a seller charges more than the going price, buyers will go elsewhere. 
C)  A seller often charges less than the going price to increase sales and profit. 
D)  A buyer can influence the price of the product. 
A)  A seller who charges more than the going price can increase her profit. 
B)  If a seller charges more than the going price, buyers will go elsewhere. 
C)  A seller often charges less than the going price to increase sales and profit. 
D)  A buyer can influence the price of the product.

Question 19

What would happen to the equilibrium price and quantity of golf club memberships if the price of landscaping and grass maintenance went up, the price of golf clubs increased, fewer golf courses decided to offer memberships, and health officials announced that playing golf was good for you?

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)  effect on both price and quantity 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)  effect on both price and quantity is ambiguous

Question 20

What is market demand?

Accepted Answer

A)  It is a vertical summation of individual demand curves. 
B)  It is a horizontal summation of individual demand curves. 
C)  It is not responsive to change in tastes and preferences. 
D)  It is determined solely by the number of buyers and sellers in the market. 
A)  It is a vertical summation of individual demand curves. 
B)  It is a horizontal summation of individual demand curves. 
C)  It is not responsive to change in tastes and preferences. 
D)  It is determined solely by the number of buyers and sellers in the market.

What will result from an increase in resource costs to firms in a market?

What might be the reason when quantity demanded has increased at every price?

Market demand is given as Qd = 200 - 2P. Market supply is given as Qs = 2P + 40. What would result if the market price were $80?

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

Market demand is given as Qd = 200 - 4P. Market supply is given as Qs = 6P. What would result if the market price were $15?

Figure 4-3 -Refer to the Figure 4-3. If the price in this market is currently $14, what would happen?

A market is a group of buyers and sellers of a particular product.

What is step one in the three-step program for analyzing changes in equilibrium?

Which of the following is NOT a characteristic of a perfectly competitive market?

Recent pine beetle infestations that are destroying trees in the western provinces are expected to cause the price of lumber to rise in the next six months. As a result, what can we expect to happen to the supply of lumber?

Rebecca likes country music concerts today more than she did yesterday. What does this reveal about Rebecca's circumstances?

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?

Suppose that Carolyn receives a pay increase. What would we expect?

Suppose you wish to analyze the change in the equilibrium price of lumber as a result of pine beetle infestations that are destroying trees in the West. What would your first step be?

Figure 4-2 -Refer to the Figure 4-2. What would happen at a price of $15?

-Refer to the Table 4-1. What would the equilibrium price and quantity be?

Which of the following would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

Which of the following best describes a perfectly competitive market?

What would happen to the equilibrium price and quantity of golf club memberships if the price of landscaping and grass maintenance went up, the price of golf clubs increased, fewer golf courses decided to offer memberships, and health officials announced that playing golf was good for you?

What is market demand?

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

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Exam 4: The Market Forces of Supply and Demand

What will result from an increase in resource costs to firms in a market?

What might be the reason when quantity demanded has increased at every price?

Market demand is given as Qd = 200 - 2P. Market supply is given as Qs = 2P + 40. What would result if the market price were $80?

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

Market demand is given as Qd = 200 - 4P. Market supply is given as Qs = 6P. What would result if the market price were $15?

Figure 4-3 -Refer to the Figure 4-3. If the price in this market is currently $14, what would happen?

A market is a group of buyers and sellers of a particular product.

What is step one in the three-step program for analyzing changes in equilibrium?

Which of the following is NOT a characteristic of a perfectly competitive market?

Recent pine beetle infestations that are destroying trees in the western provinces are expected to cause the price of lumber to rise in the next six months. As a result, what can we expect to happen to the supply of lumber?

Rebecca likes country music concerts today more than she did yesterday. What does this reveal about Rebecca's circumstances?

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?

Suppose that Carolyn receives a pay increase. What would we expect?

Suppose you wish to analyze the change in the equilibrium price of lumber as a result of pine beetle infestations that are destroying trees in the West. What would your first step be?

Figure 4-2 -Refer to the Figure 4-2. What would happen at a price of $15?

-Refer to the Table 4-1. What would the equilibrium price and quantity be?

Which of the following would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

Which of the following best describes a perfectly competitive market?

What would happen to the equilibrium price and quantity of golf club memberships if the price of landscaping and grass maintenance went up, the price of golf clubs increased, fewer golf courses decided to offer memberships, and health officials announced that playing golf was good for you?

What is market demand?

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

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