Question 1

Which of the following would NOT affect an individual's demand curve?

Accepted Answer

A)  expectations 
B)  income 
C)  price of related goods 
D)  the number of buyers 
A)  expectations 
B)  income 
C)  price of related goods 
D)  the number of buyers

Question 2

If a surplus exists in a market, what do we know?

Accepted Answer

A)  The actual price is above equilibrium price, and quantity supplied is greater than quantity demanded. 
B)  The actual price is above equilibrium price, and quantity demanded is greater than quantity supplied. 
C)  The actual price is below equilibrium price, and quantity demanded is greater than quantity supplied. 
D)  The actual price is below equilibrium price, and quantity supplied is greater than quantity demanded. 
A)  The actual price is above equilibrium price, and quantity supplied is greater than quantity demanded. 
B)  The actual price is above equilibrium price, and quantity demanded is greater than quantity supplied. 
C)  The actual price is below equilibrium price, and quantity demanded is greater than quantity supplied. 
D)  The actual price is below equilibrium price, and quantity supplied is greater than quantity demanded.

Question 3

Market demand is given as Qd =150 - 3P. Market supply is given as Qs = 2P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Accepted Answer

A)  price will be $20 and quantity will be 40 
B)  price will be $30 and quantity will be 20 
C)  price will be $30 and quantity will be 60 
D)  price will be $40 and quantity will be 60 
A)  price will be $20 and quantity will be 40 
B)  price will be $30 and quantity will be 20 
C)  price will be $30 and quantity will be 60 
D)  price will be $40 and quantity will be 60

Question 4

Consider the following scenario: a new manufacturing process is introduced to make hockey skates. The new process is more efficient, lowers the cost of producing hockey skates, and allows more firms start producing hockey skates. At the same time, more individuals prefer hockey as a leisure activity and hockey league registration fees have gone down. What will happen to the equilibrium price and quantity?

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 5

If a shortage exists in a market, what do we know?

Accepted Answer

A)  The actual price is below equilibrium price, and quantity demanded is greater than quantity supplied. 
B)  The actual price is above equilibrium price, and quantity demanded is greater than quantity supplied. 
C)  The actual price is above equilibrium price, and quantity supplied is greater than quantity demanded. 
D)  The actual price is below equilibrium price, and quantity supplied is greater than quantity demanded. 
A)  The actual price is below equilibrium price, and quantity demanded is greater than quantity supplied. 
B)  The actual price is above equilibrium price, and quantity demanded is greater than quantity supplied. 
C)  The actual price is above equilibrium price, and quantity supplied is greater than quantity demanded. 
D)  The actual price is below equilibrium price, and quantity supplied is greater than quantity demanded.

Question 6

Figure 4-5  
-Refer to the Figure 4-5. Which of the four graphs represents the market for back to school clothes in late August?

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 7

Peter tells you that he thinks the price of chocolate bars, his favourite food, will decrease in the near future. How will he probably respond?

Accepted Answer

A)  by decreasing his current demand for chocolate bars 
B)  by not changing his current demand for chocolate bars 
C)  by increasing his current demand for chocolate bars 
D)  by currently refusing to buy any more chocolate bars 
A)  by decreasing his current demand for chocolate bars 
B)  by not changing his current demand for chocolate bars 
C)  by increasing his current demand for chocolate bars 
D)  by currently refusing to buy any more chocolate bars

Question 8

Figure 4-4  
-Refer to the Figure 4-4. If the price is $15, what would the quantity supplied be?

Accepted Answer

A)  400 
B)  600 
C)  700 
D)  800 
A)  400 
B)  600 
C)  700 
D)  800

Question 9

What would result from an increase in the number of scholarships issued for university education?

Accepted Answer

A)  an increase in the supply of education 
B)  a decrease in the supply of education 
C)  an increase in the demand for education 
D)  a decrease in the demand for education 
A)  an increase in the supply of education 
B)  a decrease in the supply of education 
C)  an increase in the demand for education 
D)  a decrease in the demand for education

Question 10

Market demand is given as Qd = 150 - P. Market supply is given as Qs = 4P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Accepted Answer

A)  price will be $30 and quantity will be 120 
B)  price will be $30 and quantity will be 150 
C)  price will be $50 and quantity will be 100 
D)  price will be $96 and quantity will be 25 
A)  price will be $30 and quantity will be 120 
B)  price will be $30 and quantity will be 150 
C)  price will be $50 and quantity will be 100 
D)  price will be $96 and quantity will be 25

Question 11

Aluminum is an important input in the production of bicycle frames. If the price of aluminum decreases, all else being equal, what would we expect?

Accepted Answer

A)  the supply of bicycle frames to be unaffected 
B)  the supply of bicycle frames to decrease 
C)  the supply of bicycle frames to increase 
D)  the supply of lead to increase 
A)  the supply of bicycle frames to be unaffected 
B)  the supply of bicycle frames to decrease 
C)  the supply of bicycle frames to increase 
D)  the supply of lead to increase

Question 12

Once the demand curve for a product or service is drawn, what is possible?

Accepted Answer

A)  It can shift either right or left. 
B)  It remains stable over time at a given price. 
C)  It can shift if the price changes. 
D)  It can only be accurate at one price. 
A)  It can shift either right or left. 
B)  It remains stable over time at a given price. 
C)  It can shift if the price changes. 
D)  It can only be accurate at one price.

Question 13

Which of the following determines a market supply curve but not an individual supply curve?

Accepted Answer

A)  number of sellers 
B)  expectations 
C)  input prices 
D)  technology 
A)  number of sellers 
B)  expectations 
C)  input prices 
D)  technology

Question 14

Workers at a fast food restaurant currently make minimum wage. If the provincial government increases the minimum wage by $1.00 an hour, what will likely happen?

Accepted Answer

A)  Demand for bicycle assembly workers will increase. 
B)  Supply of bicycles will shift to the right. 
C)  Supply of bicycles will shift to the left. 
D)  The firm must increase output to maintain profit levels. 
A)  Demand for bicycle assembly workers will increase. 
B)  Supply of bicycles will shift to the right. 
C)  Supply of bicycles will shift to the left. 
D)  The firm must increase output to maintain profit levels.

Question 15

Market demand is Qd = 200 - 4P. Market supply is Qs = 6P. In a perfectly competitive equilibrium, what will be the price?

Accepted Answer

A)  $20 
B)  $30 
C)  $50 
D)  $100 
A)  $20 
B)  $30 
C)  $50 
D)  $100

Question 16

Which of the following is NOT a determinant of demand?

Accepted Answer

A)  the price of an input 
B)  the price of a complementary good 
C)  the price of the good next month 
D)  the price of a substitute good 
A)  the price of an input 
B)  the price of a complementary good 
C)  the price of the good next month 
D)  the price of a substitute good

Question 17

What does a 10 percent increase in the price of cigarettes lead to?

Accepted Answer

A)  4 percent drop in smoking 
B)  6 percent drop in smoking 
C)  12 percent drop in smoking 
D)  18 percent drop in smoking 
A)  4 percent drop in smoking 
B)  6 percent drop in smoking 
C)  12 percent drop in smoking 
D)  18 percent drop in smoking

Question 18

What will happen to the demand curve for ice cream in a very hot summer in Guelph?

Accepted Answer

A)  It will shift to the left. 
B)  It will shift to the right. 
C)  It will remain stable but we would move down the curve. 
D)  It will remain stable but we would move up the curve. 
A)  It will shift to the left. 
B)  It will shift to the right. 
C)  It will remain stable but we would move down the curve. 
D)  It will remain stable but we would move up the curve.

Question 19

What is the sum of all individual demand curves for a product?

Accepted Answer

A)  total demand 
B)  consumption demand 
C)  summation demand 
D)  market demand 
A)  total demand 
B)  consumption demand 
C)  summation demand 
D)  market demand

Question 20

Suppose that health officials have argued that drinking too much coffee might be harmful to human health. As a result, there has been a significant decrease in the amount of coffee produced. Which of the following best explains the decrease in production?

Accepted Answer

A)  Coffee producers, concerned about the health of their customers, decided to produce relatively less coffee. 
B)  Government officials, concerned about consumer health, ordered coffee producers to produce relatively less coffee. 
C)  Individual consumers, concerned about their own health, decreased their demand for coffee, which lowered the relative price of coffee, making it less attractive to produce. 
D)  Anti-coffee protesters have made it difficult for both buyers and sellers of coffee to meet in the marketplace. 
A)  Coffee producers, concerned about the health of their customers, decided to produce relatively less coffee. 
B)  Government officials, concerned about consumer health, ordered coffee producers to produce relatively less coffee. 
C)  Individual consumers, concerned about their own health, decreased their demand for coffee, which lowered the relative price of coffee, making it less attractive to produce. 
D)  Anti-coffee protesters have made it difficult for both buyers and sellers of coffee to meet in the marketplace.

Which of the following would NOT affect an individual's demand curve?

If a surplus exists in a market, what do we know?

Market demand is given as Qd =150 - 3P. Market supply is given as Qs = 2P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

If a shortage exists in a market, what do we know?

Figure 4-5 -Refer to the Figure 4-5. Which of the four graphs represents the market for back to school clothes in late August?

Peter tells you that he thinks the price of chocolate bars, his favourite food, will decrease in the near future. How will he probably respond?

Figure 4-4 -Refer to the Figure 4-4. If the price is $15, what would the quantity supplied be?

What would result from an increase in the number of scholarships issued for university education?

Market demand is given as Qd = 150 - P. Market supply is given as Qs = 4P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Aluminum is an important input in the production of bicycle frames. If the price of aluminum decreases, all else being equal, what would we expect?

Once the demand curve for a product or service is drawn, what is possible?

Which of the following determines a market supply curve but not an individual supply curve?

Workers at a fast food restaurant currently make minimum wage. If the provincial government increases the minimum wage by $1.00 an hour, what will likely happen?

Market demand is Qd = 200 - 4P. Market supply is Qs = 6P. In a perfectly competitive equilibrium, what will be the price?

Which of the following is NOT a determinant of demand?

What does a 10 percent increase in the price of cigarettes lead to?

What will happen to the demand curve for ice cream in a very hot summer in Guelph?

What is the sum of all individual demand curves for a product?

Suppose that health officials have argued that drinking too much coffee might be harmful to human health. As a result, there has been a significant decrease in the amount of coffee produced. Which of the following best explains the decrease in production?

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

Which of the following would NOT affect an individual's demand curve?

If a surplus exists in a market, what do we know?

Market demand is given as Qd =150 - 3P. Market supply is given as Qs = 2P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

If a shortage exists in a market, what do we know?

Figure 4-5 -Refer to the Figure 4-5. Which of the four graphs represents the market for back to school clothes in late August?

Peter tells you that he thinks the price of chocolate bars, his favourite food, will decrease in the near future. How will he probably respond?

Figure 4-4 -Refer to the Figure 4-4. If the price is $15, what would the quantity supplied be?

What would result from an increase in the number of scholarships issued for university education?

Market demand is given as Qd = 150 - P. Market supply is given as Qs = 4P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Aluminum is an important input in the production of bicycle frames. If the price of aluminum decreases, all else being equal, what would we expect?

Once the demand curve for a product or service is drawn, what is possible?

Which of the following determines a market supply curve but not an individual supply curve?

Workers at a fast food restaurant currently make minimum wage. If the provincial government increases the minimum wage by $1.00 an hour, what will likely happen?

Market demand is Qd = 200 - 4P. Market supply is Qs = 6P. In a perfectly competitive equilibrium, what will be the price?

Which of the following is NOT a determinant of demand?

What does a 10 percent increase in the price of cigarettes lead to?

What will happen to the demand curve for ice cream in a very hot summer in Guelph?

What is the sum of all individual demand curves for a product?

Suppose that health officials have argued that drinking too much coffee might be harmful to human health. As a result, there has been a significant decrease in the amount of coffee produced. Which of the following best explains the decrease in production?

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