Question 1

Some producers are chatting over a beer.Which one of the following quotations refers to a leftward shift of the supply curve?

Accepted Answer

A) "Wage increases have forced us to raise our prices." 
B) "Our new, sophisticated equipment will enable us to undercut our competitors." 
C) "Raw material prices have sky-rocketed;we will have to pass the cost on to our customers." 
D) "We anticipate a big increase in demand.Our product price should rise, so we are planning for an increase in output." 
E) Both A and C. 
A) "Wage increases have forced us to raise our prices." 
B) "Our new, sophisticated equipment will enable us to undercut our competitors." 
C) "Raw material prices have sky-rocketed;we will have to pass the cost on to our customers." 
D) "We anticipate a big increase in demand.Our product price should rise, so we are planning for an increase in output." 
E) Both A and C.

Question 2

If A and B are complements and the cost of a factor of production used in the production of A decreases,then the price of

Accepted Answer

A) both A and B will rise. 
B) both A and B will fall. 
C) A will fall and the price of B will rise. 
D) A will rise and the price of B will fall. 
E) A will fall and the price of B will remain unchanged. 
A) both A and B will rise. 
B) both A and B will fall. 
C) A will fall and the price of B will rise. 
D) A will rise and the price of B will fall. 
E) A will fall and the price of B will remain unchanged.

Question 3

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium.Pepsi is a substitute for coffee;cream is a complement of coffee.Consider the market for coffee.Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.A new study comes out,revealing that drinking Pepsi increases your ability to study.The equilibrium quantity of coffee

Accepted Answer

A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases or decreases depending on the relative shifts of the supply and demand curves. 
A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases or decreases depending on the relative shifts of the supply and demand curves.

Question 4

Some sales managers are talking shop.Which one of the following quotations refers to a leftward shift of the demand curve?

Accepted Answer

A) "Since our competitors raised their prices, our sales have doubled." 
B) "It has been an unusually mild winter;our sales of wool scarves are down from last year." 
C) "We decided to cut our prices, and the increase in our sales has been remarkable." 
D) "The Green movement has sparked an increase in our sales of biodegradable products." 
E) None of the above. 
A) "Since our competitors raised their prices, our sales have doubled." 
B) "It has been an unusually mild winter;our sales of wool scarves are down from last year." 
C) "We decided to cut our prices, and the increase in our sales has been remarkable." 
D) "The Green movement has sparked an increase in our sales of biodegradable products." 
E) None of the above.

Question 5

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium.Pepsi is a substitute for coffee;cream is a complement of coffee.Consider the market for coffee.Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.If there is an increase in the wages of farm workers who harvest coffee beans,the equilibrium quantity of coffee

Accepted Answer

A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases or decreases depending on the relative shifts of the supply and demand curves. 
A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases or decreases depending on the relative shifts of the supply and demand curves.

Question 6

The supply curve of a good slopes upward to the right because of

Accepted Answer

A) technological improvements over time. 
B) the law of supply. 
C) the law of demand. 
D) the existence of substitutes in production. 
E) the fact that prices tend to rise over time. 
A) technological improvements over time. 
B) the law of supply. 
C) the law of demand. 
D) the existence of substitutes in production. 
E) the fact that prices tend to rise over time.

Question 7

Suppose we observe a fall in the price of good A and an increase in the quantity of good A bought and sold.Which one of the following is a likely explanation?

Accepted Answer

A) The law of supply is violated. 
B) The demand for A decreased. 
C) The demand for A increased. 
D) The supply of A increased. 
E) The supply of A decreased. 
A) The law of supply is violated. 
B) The demand for A decreased. 
C) The demand for A increased. 
D) The supply of A increased. 
E) The supply of A decreased.

Question 8

Use the figure below to answer the following questions.
   
Figure 3.5.1
-If the demand curve is D2 in Figure 3.5.1,

Accepted Answer

A) the equilibrium price is P2 and the equilibrium quantity is Q2. 
B) the equilibrium price is P2 and the equilibrium quantity is Q0. 
C) there is a shortage in the amount of Q2 - Q0. 
D) a rise in price will shift the demand curve to D3. 
E) price will rise. 
A) the equilibrium price is P2 and the equilibrium quantity is Q2. 
B) the equilibrium price is P2 and the equilibrium quantity is Q0. 
C) there is a shortage in the amount of Q2 - Q0. 
D) a rise in price will shift the demand curve to D3. 
E) price will rise.

Question 9

Some sales managers are talking shop.Which one of the following quotations refers to a rightward shift of the demand curve?

Accepted Answer

A) "Since our competitors raised their prices, our sales have doubled." 
B) "It has been an unusually harsh winter;our sales of wool scarves are up from last year." 
C) "We decided to cut our prices, and the increase in our sales has been remarkable." 
D) "The Green movement has sparked an increase in our sales of biodegradable products." 
E) All of the above except C. 
A) "Since our competitors raised their prices, our sales have doubled." 
B) "It has been an unusually harsh winter;our sales of wool scarves are up from last year." 
C) "We decided to cut our prices, and the increase in our sales has been remarkable." 
D) "The Green movement has sparked an increase in our sales of biodegradable products." 
E) All of the above except C.

Question 10

Use the figure below to answer the following questions.
   
Figure 3.4.2
-Complete the following sentence.A surplus

Accepted Answer

A) exists if the price is above the equilibrium price. 
B) is the amount by which the quantity demanded exceeds the quantity supplied. 
C) is the amount by which the quantity demanded exceeds the equilibrium quantity. 
D) is the amount by which the quantity supplied exceeds the equilibrium quantity. 
E) will lead to rising prices. 
A) exists if the price is above the equilibrium price. 
B) is the amount by which the quantity demanded exceeds the quantity supplied. 
C) is the amount by which the quantity demanded exceeds the equilibrium quantity. 
D) is the amount by which the quantity supplied exceeds the equilibrium quantity. 
E) will lead to rising prices.

Question 11

Which one of the following would not shift the supply curve of good X to the right?

Accepted Answer

A) a fall in the price of the factors of production used in producing X 
B) an improvement in technology used in the production of X 
C) a rise in the price of X 
D) an increase in the price of Y, a complement in production of X 
E) a fall in the price of Y, a substitute in production of X 
A) a fall in the price of the factors of production used in producing X 
B) an improvement in technology used in the production of X 
C) a rise in the price of X 
D) an increase in the price of Y, a complement in production of X 
E) a fall in the price of Y, a substitute in production of X

Question 12

If Canadians suddenly develop a strong urge to escape the cold winter by taking vacations in Hawaii,the

Accepted Answer

A) price of a vacation in Hawaii rises and the quantity demanded of Hawaiian vacations decreases. 
B) price of a skiing vacation in the mountains rises. 
C) initial result of the change is a surplus of vacations in Hawaii, leading to a price rise. 
D) price of airline tickets falls as ticket agents make deals in response to this change. 
E) price of luggage will rise, because luggage and vacations are complements. 
A) price of a vacation in Hawaii rises and the quantity demanded of Hawaiian vacations decreases. 
B) price of a skiing vacation in the mountains rises. 
C) initial result of the change is a surplus of vacations in Hawaii, leading to a price rise. 
D) price of airline tickets falls as ticket agents make deals in response to this change. 
E) price of luggage will rise, because luggage and vacations are complements.

Question 13

If we observe an increase in the equilibrium quantity of good A,we know that

Accepted Answer

A) either the demand for A has increased or the supply of A has decreased or both. 
B) either the demand for A has increased or the supply of A has increased or both. 
C) either the demand for A has decreased or the supply of A has increased or both. 
D) either the demand for A has decreased or the supply of A has decreased or both. 
E) none of the above. 
A) either the demand for A has increased or the supply of A has decreased or both. 
B) either the demand for A has increased or the supply of A has increased or both. 
C) either the demand for A has decreased or the supply of A has increased or both. 
D) either the demand for A has decreased or the supply of A has decreased or both. 
E) none of the above.

Question 14

A decrease in quantity demanded is represented by a

Accepted Answer

A) rightward shift of the supply curve. 
B) rightward shift of the demand curve. 
C) leftward shift of the demand curve. 
D) movement upward and to the left along the demand curve. 
E) movement downward and to the right along the demand curve. 
A) rightward shift of the supply curve. 
B) rightward shift of the demand curve. 
C) leftward shift of the demand curve. 
D) movement upward and to the left along the demand curve. 
E) movement downward and to the right along the demand curve.

Question 15

Use the table below to answer the following questions.
Table 3.5.1
The Market for Car-Seat Heaters
  
-Refer to Table 3.5.1.The equilibrium price is $________ and the equilibrium quantity is ________ heaters per month.

Accepted Answer

A) 80;500 
B) 80;300 
C) 50;450 
D) 50;350 
E) 60;400 
A) 80;500 
B) 80;300 
C) 50;450 
D) 50;350 
E) 60;400

Question 16

Use the figure below to answer the following questions.
   
Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2,which represents the market for beans.If the price of peas,a substitute for beans in production,rises,what is the new beans equilibrium,ceteris paribus?

Accepted Answer

A) 8 
B) 3 
C) 9 
D) 5 
E) 6 
A) 8 
B) 3 
C) 9 
D) 5 
E) 6

Question 17

Use the figure below to answer the following questions.
   
Figure 3.2.2
-Refer to Figure 3.2.2. Which one of the following represents a decrease in quantity demanded?

Accepted Answer

A) a shift from D1 to D2 
B) a shift from D2 to D1 
C) a movement from A to B 
D) a movement from B to A 
E) none of the above 
A) a shift from D1 to D2 
B) a shift from D2 to D1 
C) a movement from A to B 
D) a movement from B to A 
E) none of the above

Question 18

Use the table below to answer the following questions.
Table 3.5.3
Demand and supply schedules for designer sport t-shirts at CoolU
  
-Refer to Table 3.5.3.The equilibrium price is $________ and the equilibrium quantity is ________ t-shirts per month.

Accepted Answer

A) 6;200 
B) 7;220 
C) 8;180 
D) 8;220 
E) 8;200 
A) 6;200 
B) 7;220 
C) 8;180 
D) 8;220 
E) 8;200

Question 19

Use the figure below to answer the following questions.
   
Figure 3.4.2
-A shortage will exist if

Accepted Answer

A) the price is above the equilibrium price. 
B) the price is below the equilibrium price. 
C) there are not enough producers. 
D) there are not enough consumers. 
E) demand decreases. 
A) the price is above the equilibrium price. 
B) the price is below the equilibrium price. 
C) there are not enough producers. 
D) there are not enough consumers. 
E) demand decreases.

Question 20

Use the table below to answer the following questions.
Table 3.5.1
The Market for Car-Seat Heaters
  
-Refer to Table 3.5.1.If the price is set at $80,there will be a

Accepted Answer

A) shortage of 200 units and price will rise. 
B) shortage of 200 units and demand will fall. 
C) surplus of 200 units and demand will rise. 
D) surplus of 200 units and supply will fall. 
E) surplus of 200 units and price will fall. 
A) shortage of 200 units and price will rise. 
B) shortage of 200 units and demand will fall. 
C) surplus of 200 units and demand will rise. 
D) surplus of 200 units and supply will fall. 
E) surplus of 200 units and price will fall.

Exam 3: Demand and Supply

Some producers are chatting over a beer.Which one of the following quotations refers to a leftward shift of the supply curve?

If A and B are complements and the cost of a factor of production used in the production of A decreases,then the price of

Some sales managers are talking shop.Which one of the following quotations refers to a leftward shift of the demand curve?

The supply curve of a good slopes upward to the right because of

Suppose we observe a fall in the price of good A and an increase in the quantity of good A bought and sold.Which one of the following is a likely explanation?

Use the figure below to answer the following questions. Figure 3.5.1 -If the demand curve is D2 in Figure 3.5.1,

Some sales managers are talking shop.Which one of the following quotations refers to a rightward shift of the demand curve?

Use the figure below to answer the following questions. Figure 3.4.2 -Complete the following sentence.A surplus

Which one of the following would not shift the supply curve of good X to the right?

If Canadians suddenly develop a strong urge to escape the cold winter by taking vacations in Hawaii,the

If we observe an increase in the equilibrium quantity of good A,we know that

A decrease in quantity demanded is represented by a

Use the table below to answer the following questions. Table 3.5.1 The Market for Car-Seat Heaters -Refer to Table 3.5.1.The equilibrium price is $________ and the equilibrium quantity is ________ heaters per month.

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2,which represents the market for beans.If the price of peas,a substitute for beans in production,rises,what is the new beans equilibrium,ceteris paribus?

Use the figure below to answer the following questions. Figure 3.2.2 -Refer to Figure 3.2.2. Which one of the following represents a decrease in quantity demanded?

Use the table below to answer the following questions. Table 3.5.3 Demand and supply schedules for designer sport t-shirts at CoolU -Refer to Table 3.5.3.The equilibrium price is $________ and the equilibrium quantity is ________ t-shirts per month.

Use the figure below to answer the following questions. Figure 3.4.2 -A shortage will exist if

Use the table below to answer the following questions. Table 3.5.1 The Market for Car-Seat Heaters -Refer to Table 3.5.1.If the price is set at $80,there will be a

What Is Economics?

The Economic Problem

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: The Keynesian Model

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Use the figure below to answer the following questions. Figure 3.5.1 -If the demand curve is D₂ in Figure 3.5.1,

Use the table below to answer the following questions. Table 3.5.1 The Market for Car-Seat Heaters -Refer to Table 3.5.1.The equilibrium price is $ and the equilibrium quantity is heaters per month.

Use the table below to answer the following questions. Table 3.5.3 Demand and supply schedules for designer sport t-shirts at CoolU -Refer to Table 3.5.3.The equilibrium price is $ and the equilibrium quantity is t-shirts per month.