Question 1

A perfectly competitive market DOES NOT have which of the following characteristics?

Accepted Answer

A) many buyers 
B) several buyers which have a large impact on the price of goods 
C) many goods which are very similar 
D) many sellers 
A) many buyers 
B) several buyers which have a large impact on the price of goods 
C) many goods which are very similar 
D) many sellers B

Question 2

Which of the following would cause both the equilibrium price and equilibrium quantity of number-two-grade potatoes (an inferior good) to increase?

Accepted Answer

A) a decrease in consumer income 
B) an increase in consumer income 
C) greater government restrictions on agricultural chemicals 
D) fewer government restrictions on agricultural chemicals 
A) a decrease in consumer income 
B) an increase in consumer income 
C) greater government restrictions on agricultural chemicals 
D) fewer government restrictions on agricultural chemicals A

Question 3

Graph 4-2   
-Refer to Graph 4-2.On the graph, the movement from D to D₁ could be caused by:

Accepted Answer

A) an increase in price 
B) a decrease in the price of a complement 
C) an increase in technology 
D) a decrease in the price of a substitute 
A) an increase in price 
B) a decrease in the price of a complement 
C) an increase in technology 
D) a decrease in the price of a substitute D

Question 4

If the market price is below the equilibrium price, there will be a surplus and the price will rise.

Accepted Answer

A) True 
 B)False

Question 5

The market demand curve illustrates:

Accepted Answer

A) how much all buyers in the market are willing and able to buy at each possible price 
B) the fact that tastes for a good are inversely related to the price of a good 
C) how the quantity demanded increases as incomes increase 
D) the fact that demand for a good is inversely related to the number of buyers 
A) how much all buyers in the market are willing and able to buy at each possible price 
B) the fact that tastes for a good are inversely related to the price of a good 
C) how the quantity demanded increases as incomes increase 
D) the fact that demand for a good is inversely related to the number of buyers

Question 6

The Latin phrase ceteris paribus means 'other things changing'.

Accepted Answer

A) True 
 B)False

Question 7

A weaker demand together with a stronger supply would necessarily result in:

Accepted Answer

A) a lower price 
B) a higher price 
C) an increase in equilibrium quantity 
D) a decrease in equilibrium quantity 
A) a lower price 
B) a higher price 
C) an increase in equilibrium quantity 
D) a decrease in equilibrium quantity

Question 8

Improvements in technology is demonstrated by a shift in the supply curve.

Accepted Answer

A) True 
 B)False

Question 9

In a market, to find the total amount supplied at a particular price:

Accepted Answer

A) we must add up all of the amounts firms are willing and able to supply at that price 
B) we need the demand for the good 
C) the tastes and preferences of buyers must be established 
D) the income level of buyers would need to be determined 
A) we must add up all of the amounts firms are willing and able to supply at that price 
B) we need the demand for the good 
C) the tastes and preferences of buyers must be established 
D) the income level of buyers would need to be determined

Question 10

Comparative statics involves:

Accepted Answer

A) comparing the old equilibrium and the new equilibrium 
B) the estimating of buyer reluctance to pay the market price 
C) comparisons of varying prices 
D) the estimating of the friction that develops between buyer and seller 
A) comparing the old equilibrium and the new equilibrium 
B) the estimating of buyer reluctance to pay the market price 
C) comparisons of varying prices 
D) the estimating of the friction that develops between buyer and seller

Question 11

What will happen to supply or quantity supplied under each of the following situations?
a.the price of the product falls
b.technology improves
c.input prices rise
d.expectations change - you expect the price of your product to rise next month

Accepted Answer

a.A change in price will cause a movemen

Question 12

Which of the following would not shift the demand curve for beef?

Accepted Answer

A) a reduction in the price of cattle farm fencing 
B) a change in the incomes of beef consumers 
C) an effective advertising campaign by pork producers 
D) a widely publicised study that indicates beef increases one's cholesterol 
A) a reduction in the price of cattle farm fencing 
B) a change in the incomes of beef consumers 
C) an effective advertising campaign by pork producers 
D) a widely publicised study that indicates beef increases one's cholesterol

Question 13

What could cause the demand curve for fish to shift?

Accepted Answer

A) an increase in the price of a substitute good for fish 
B) a decrease in the price of a close substitute for fish 
C) an increase in consumer incomes 
D) all of the above 
A) an increase in the price of a substitute good for fish 
B) a decrease in the price of a close substitute for fish 
C) an increase in consumer incomes 
D) all of the above

Question 14

The behaviour of firms to different market conditions is known as:

Accepted Answer

A) supply 
B) demand 
C) incomes 
D) taxation 
A) supply 
B) demand 
C) incomes 
D) taxation

Question 15

If the demand for movies falls when income falls, then movies must be an inferior good.

Accepted Answer

A) True 
 B)False

Question 16

Given the following table, graph the demand and supply curves for flashlights.Be sure to label equilibrium price and equilibrium quantity. $\begin{array}{|c|c|c|}
\hline \text { Price/flashlight (\$) } & \text { Quantity demanded/month } & \text { Quantity supplied/month } \
\hline 5 & 2,000 & 12,000 \
\hline 4 & 4,000 & 10,000 \
\hline 3 & 7,000 & 7,000 \
\hline 2 & 11,000 & 4,000 \
\hline 1 & 15,000 & 1,000 \
\hline
\end{array}$

Accepted Answer

The answer of Given the following table, graph the demand...

Question 17

Graph 4-5   
-Refer to Graph 4-5.According to the graph, at a price of $7:

Accepted Answer

A) a surplus would exist and the price would tend to fall 
B) a surplus would exist and the price would tend to rise 
C) a shortage would exist and the price would tend to fall 
D) the market would be in equilibrium 
A) a surplus would exist and the price would tend to fall 
B) a surplus would exist and the price would tend to rise 
C) a shortage would exist and the price would tend to fall 
D) the market would be in equilibrium

Question 18

Suppose that the incomes of buyers in a particular market for a normal good decline 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) both equilibrium price and equilibrium quantity would increase 
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) both equilibrium price and equilibrium quantity would increase 
D) equilibrium quantity would increase but the impact on equilibrium price would be ambiguous

Question 19

If a good or service has only more than one seller, it is called a monopoly.

Accepted Answer

A) True 
 B)False

Question 20

A decrease in subsidies for art galleries would:

Accepted Answer

A) increase the supply of art 
B) decrease the supply of art 
C) increase the demand for art dealers 
D) decrease the demand for art dealers 
A) increase the supply of art 
B) decrease the supply of art 
C) increase the demand for art dealers 
D) decrease the demand for art dealers

Exam 4: The Market Forces of Supply and Demand

A perfectly competitive market DOES NOT have which of the following characteristics?

Which of the following would cause both the equilibrium price and equilibrium quantity of number-two-grade potatoes (an inferior good) to increase?

Graph 4-2 -Refer to Graph 4-2.On the graph, the movement from D to D₁ could be caused by:

If the market price is below the equilibrium price, there will be a surplus and the price will rise.

The market demand curve illustrates:

The Latin phrase ceteris paribus means 'other things changing'.

A weaker demand together with a stronger supply would necessarily result in:

Improvements in technology is demonstrated by a shift in the supply curve.

In a market, to find the total amount supplied at a particular price:

Comparative statics involves:

What will happen to supply or quantity supplied under each of the following situations? a.the price of the product falls b.technology improves c.input prices rise d.expectations change - you expect the price of your product to rise next month

Which of the following would not shift the demand curve for beef?

What could cause the demand curve for fish to shift?

The behaviour of firms to different market conditions is known as:

If the demand for movies falls when income falls, then movies must be an inferior good.

Graph 4-5 -Refer to Graph 4-5.According to the graph, at a price of $7:

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

If a good or service has only more than one seller, it is called a monopoly.

A decrease in subsidies for art galleries would:

Ten Lessons From Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Elasticity and Its Application

Supply, Demand and Government Policies

Consumers, Producers and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Business Strategy and Oligopoly

Competition Policy

The Markets for the Factors of Production

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Global Financial Crisis of 2008 and Beyond

Five Debates Over Macroeconomic Policy

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