Question 1

Use the figure below to answer the following questions.
   
Figure 3.4.2
-Which one of the following correctly describes how price adjustment eliminates a surplus?

Accepted Answer

A) As the price rises, the quantity demanded decreases and the quantity supplied increases. 
B) As the price rises, the quantity demanded increases and the quantity supplied decreases. 
C) As the price falls, the quantity demanded decreases and the quantity supplied increases. 
D) As the price falls, the quantity demanded increases and the quantity supplied decreases. 
E) As the price falls, the demand for substitutes decreases, which eliminates the surplus. 
A) As the price rises, the quantity demanded decreases and the quantity supplied increases. 
B) As the price rises, the quantity demanded increases and the quantity supplied decreases. 
C) As the price falls, the quantity demanded decreases and the quantity supplied increases. 
D) As the price falls, the quantity demanded increases and the quantity supplied decreases. 
E) As the price falls, the demand for substitutes decreases, which eliminates the surplus.

Question 2

Suppose we observe a rise in the price of good A and a decrease 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 3

Use the table below to answer the following questions.
Table 3.1.1
  
-Refer to Table 3.1.1.In 2012,the relative price of cola in terms of tea is

Accepted Answer

A) 1.00. 
B) 1.20. 
C) 0.83. 
D) 1.25. 
E) unknown without more information. 
A) 1.00. 
B) 1.20. 
C) 0.83. 
D) 1.25. 
E) unknown without more information.

Question 4

If A and B are substitutes in production and the price of A falls,the supply of B

Accepted Answer

A) increases and the price of B rises. 
B) increases and the price of B falls. 
C) decreases and the price of B falls. 
D) decreases and the price of B rises. 
E) does not change. 
A) increases and the price of B rises. 
B) increases and the price of B falls. 
C) decreases and the price of B falls. 
D) decreases and the price of B rises. 
E) does not change.

Question 5

A turnip is an inferior good if

Accepted Answer

A) an increase in the price of a turnip decreases the quantity of turnips that consumers want to buy. 
B) an increase in income decreases the demand for turnips. 
C) an increase in income increases the demand for turnips. 
D) turnips violate the law of demand. 
E) turnips are a low quality good. 
A) an increase in the price of a turnip decreases the quantity of turnips that consumers want to buy. 
B) an increase in income decreases the demand for turnips. 
C) an increase in income increases the demand for turnips. 
D) turnips violate the law of demand. 
E) turnips are a low quality good.

Question 6

If both demand and supply increase,then the equilibrium price

Accepted Answer

A) and equilibrium quantity increases. 
B) falls but the equilibrium quantity increases. 
C) could either rise or fall, but the equilibrium quantity increases. 
D) rises and the equilibrium quantity could either increase or decrease. 
E) falls and the equilibrium quantity could either increase or decrease. 
A) and equilibrium quantity increases. 
B) falls but the equilibrium quantity increases. 
C) could either rise or fall, but the equilibrium quantity increases. 
D) rises and the equilibrium quantity could either increase or decrease. 
E) falls and the equilibrium quantity could either increase or decrease.

Question 7

Use the table below to answer the following questions.
Table 3.5.4
 
-In Table 3.5.4 potatoes and rice are

Accepted Answer

A) substitutes in Region 1 and complements in Region 2. 
B) substitutes in Region 2 and complements in Region 1. 
C) complements in both regions. 
D) substitutes in both regions. 
E) unrelated goods in both regions. 
A) substitutes in Region 1 and complements in Region 2. 
B) substitutes in Region 2 and complements in Region 1. 
C) complements in both regions. 
D) substitutes in both regions. 
E) unrelated goods in both regions.

Question 8

Use the table below to answer the following questions.
Table 3.5.4
 
-Refer to Table 3.5.4.In Region 1,potatoes and hamburgers are

Accepted Answer

A) substitutes. 
B) complements. 
C) normal goods. 
D) unrelated goods. 
E) inferior goods. 
A) substitutes. 
B) complements. 
C) normal goods. 
D) unrelated goods. 
E) inferior goods.

Question 9

Use the table below to answer the following questions.
Table 3.4.1
  
-In Table 3.4.1,the equilibrium quantity is

Accepted Answer

A) 200 units. 
B) 320 units. 
C) 420 units. 
D) 500 units. 
E) none of the above;there is no equilibrium. 
A) 200 units. 
B) 320 units. 
C) 420 units. 
D) 500 units. 
E) none of the above;there is no equilibrium.

Question 10

Which one of the following would lead to an increase in the demand for hamburgers?

Accepted Answer

A) a new fad hamburger diet 
B) a decrease in population size 
C) a rise in the price of French fries, a complement of hamburgers 
D) a decrease in consumer income if hamburgers are a normal good 
E) a news report that hamburgers can cause skin diseases 
A) a new fad hamburger diet 
B) a decrease in population size 
C) a rise in the price of French fries, a complement of hamburgers 
D) a decrease in consumer income if hamburgers are a normal good 
E) a news report that hamburgers can cause skin diseases

Question 11

Good A is a normal good if

Accepted Answer

A) a rise in the price of a complement causes the demand for A to decrease. 
B) income and the demand for A are negatively related. 
C) a rise in the price of a substitute causes the demand for A to increase. 
D) the demand for A increases when income rises. 
E) good A satisfies the law of demand. 
A) a rise in the price of a complement causes the demand for A to decrease. 
B) income and the demand for A are negatively related. 
C) a rise in the price of a substitute causes the demand for A to increase. 
D) the demand for A increases when income rises. 
E) good A satisfies the law of demand.

Question 12

Use the figure below to answer the following questions.
   
Figure 3.5.1
-Initially,the demand curve for good A is D? in Figure 3.5.1.Suppose good B is a substitute for good A.If the price of B falls

Accepted Answer

A) the price of A will rise. 
B) there will be a surplus of good A at P?. 
C) the demand curve for good A will shift from D? to D?. 
D) the equilibrium quantity of good A will increase. 
E) all of the above are true except B. 
A) the price of A will rise. 
B) there will be a surplus of good A at P?. 
C) the demand curve for good A will shift from D? to D?. 
D) the equilibrium quantity of good A will increase. 
E) all of the above are true except B.

Question 13

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, rises,and the cost of producing beans decreases,what is the new beans equilibrium,ceteris paribus?

Accepted Answer

A) 2 
B) 3 
C) 9 
D) 4 
E) 7 
A) 2 
B) 3 
C) 9 
D) 4 
E) 7

Question 14

Which market is an example of a market for goods?

Accepted Answer

A) labour market 
B) haircut market 
C) manufactured input market 
D) apple market 
E) energy market 
A) labour market 
B) haircut market 
C) manufactured input market 
D) apple market 
E) energy market

Question 15

Use the figure below to answer the following questions.
   
Figure 3.4.2
-The equilibrium price in the market illustrated by Figure 3.4.2 is

Accepted Answer

A) $2 a unit. 
B) $4 a unit. 
C) $6 a unit. 
D) $8 a unit. 
E) $10 a unit. 
A) $2 a unit. 
B) $4 a unit. 
C) $6 a unit. 
D) $8 a unit. 
E) $10 a unit.

Question 16

Use the figure below to answer the following questions.
   
Figure 3.2.2
-Refer to Figure 3.2.2.If consumers' income increases,

Accepted Answer

A) the quantity of pizzas demanded increases. 
B) the demand curve for pizzas shifts from D? to D? if a pizza is a normal good. 
C) the supply of pizzas increases. 
D) the quantity of pizzas supplied decreases. 
E) a movement from point A to point B on D? occurs. 
A) the quantity of pizzas demanded increases. 
B) the demand curve for pizzas shifts from D? to D? if a pizza is a normal good. 
C) the supply of pizzas increases. 
D) the quantity of pizzas supplied decreases. 
E) a movement from point A to point B on D? occurs.

Question 17

A rise in the price of a good

Accepted Answer

A) decreases demand for the good. 
B) creates a movement up along the supply curve. 
C) creates a movement down along the demand curve. 
D) increases the supply of the good. 
E) increases preferences for the good. 
A) decreases demand for the good. 
B) creates a movement up along the supply curve. 
C) creates a movement down along the demand curve. 
D) increases the supply of the good. 
E) increases preferences for the good.

Question 18

Which of the following decreases the supply of popcorn?

Accepted Answer

A) a decrease in the price of popcorn 
B) an increase in the price of popcorn 
C) a technological advance in the production of popcorn 
D) a decrease in the demand for popcorn 
E) a decrease in the number of popcorn producers 
A) a decrease in the price of popcorn 
B) an increase in the price of popcorn 
C) a technological advance in the production of popcorn 
D) a decrease in the demand for popcorn 
E) a decrease in the number of popcorn producers

Question 19

The demand and supply model determines

Accepted Answer

A) relative prices. 
B) money prices. 
C) supply prices. 
D) demand prices. 
E) absolute prices. 
A) relative prices. 
B) money prices. 
C) supply prices. 
D) demand prices. 
E) absolute prices.

Question 20

Refer to the table below for the following question.
Table 3.4.2
  
-If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year,there is a ________ in the market and the price will ________.

Accepted Answer

A) shortage;rise 
B) shortage;fall 
C) surplus;rise 
D) surplus;fall 
E) surplus;either rise or fall depending on whether supply increases to meet the surplus 
A) shortage;rise 
B) shortage;fall 
C) surplus;rise 
D) surplus;fall 
E) surplus;either rise or fall depending on whether supply increases to meet the surplus

Exam 3: Demand and Supply

Use the figure below to answer the following questions. Figure 3.4.2 -Which one of the following correctly describes how price adjustment eliminates a surplus?

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

Use the table below to answer the following questions. Table 3.1.1 -Refer to Table 3.1.1.In 2012,the relative price of cola in terms of tea is

If A and B are substitutes in production and the price of A falls,the supply of B

A turnip is an inferior good if

If both demand and supply increase,then the equilibrium price

Use the table below to answer the following questions. Table 3.5.4 -In Table 3.5.4 potatoes and rice are

Use the table below to answer the following questions. Table 3.5.4 -Refer to Table 3.5.4.In Region 1,potatoes and hamburgers are

Use the table below to answer the following questions. Table 3.4.1 -In Table 3.4.1,the equilibrium quantity is

Which one of the following would lead to an increase in the demand for hamburgers?

Good A is a normal good if

Use the figure below to answer the following questions. Figure 3.5.1 -Initially,the demand curve for good A is D? in Figure 3.5.1.Suppose good B is a substitute for good A.If the price of B falls

Which market is an example of a market for goods?

Use the figure below to answer the following questions. Figure 3.4.2 -The equilibrium price in the market illustrated by Figure 3.4.2 is

Use the figure below to answer the following questions. Figure 3.2.2 -Refer to Figure 3.2.2.If consumers' income increases,

A rise in the price of a good

Which of the following decreases the supply of popcorn?

The demand and supply model determines

Refer to the table below for the following question. Table 3.4.2 -If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year,there is a ________ in the market and the price will ________.

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

Refer to the table below for the following question. Table 3.4.2 -If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year,there is a in the market and the price will .