Question 1

All else being constant, an increase in the number of cattle delivered to an auction to be marketed would:

Accepted Answer

A) represent an increase in demand for cattle at the auction 
B) represent an increase in the supply of cattle at the auction 
C) represent a decrease in the number of sellers at the auction 
D) have no effect on the demand or supply at the auction 
A) represent an increase in demand for cattle at the auction 
B) represent an increase in the supply of cattle at the auction 
C) represent a decrease in the number of sellers at the auction 
D) have no effect on the demand or supply at the auction

Question 2

Graph 4-5   
-Refer to Graph 4-5.According to the graph, at a price of $3:

Accepted Answer

A) there would be a shortage of 40 units 
B) there would be a surplus of 40 units 
C) there would be a surplus of 20 units 
D) the market would be in equilibrium 
A) there would be a shortage of 40 units 
B) there would be a surplus of 40 units 
C) there would be a surplus of 20 units 
D) the market would be in equilibrium

Question 3

Doug likes tomatoes today more than he did yesterday.Ceteris paribus, which of the following statements is correct?

Accepted Answer

A) Doug must have received an increase in income 
B) Doug is now willing to pay more than before for tomatoes 
C) Doug must now consider tomatoes a luxury 
D) the supply of tomatoes must have increased 
A) Doug must have received an increase in income 
B) Doug is now willing to pay more than before for tomatoes 
C) Doug must now consider tomatoes a luxury 
D) the supply of tomatoes must have increased

Question 4

If good Z is 'inferior', then an increase in income will cause:

Accepted Answer

A) demand for good Z will increase 
B) market price of good Z will increase 
C) demand for good Z will decrease 
D) demand for good Z will not change 
A) demand for good Z will increase 
B) market price of good Z will increase 
C) demand for good Z will decrease 
D) demand for good Z will not change

Question 5

The price of any good adjusts until quantity demanded equals quantity supplied.

Accepted Answer

A) True 
 B)False

Question 6

Graph 4-6   
-Refer to the Graph 4-6.If price were $15, quantity supplied would be:

Accepted Answer

A) 200 
B) 400 
C) 500 
D) 700 
A) 200 
B) 400 
C) 500 
D) 700

Question 7

As a seller, you would be considered part of a perfectly competitive market if:

Accepted Answer

A) your actions are quickly followed by competitors 
B) your pricing has no impact on the amount you can sell 
C) your actions essentially have no effect on the market price 
D) increases in the price of your product have an impact on the market price 
A) your actions are quickly followed by competitors 
B) your pricing has no impact on the amount you can sell 
C) your actions essentially have no effect on the market price 
D) increases in the price of your product have an impact on the market price

Question 8

Suppose that demand decreases AND supply decreases.What would you expect to occur in the market for the good?

Accepted Answer

A) equilibrium price would increase but the impact on equilibrium quantity would be ambiguous 
B) equilibrium price would decrease but the impact on equilibrium quantity would be ambiguous 
C) both equilibrium price and equilibrium quantity would increase 
D) equilibrium quantity would decrease but the impact on equilibrium price would be ambiguous 
A) equilibrium price would increase but the impact on equilibrium quantity would be ambiguous 
B) equilibrium price would decrease but the impact on equilibrium quantity would be ambiguous 
C) both equilibrium price and equilibrium quantity would increase 
D) equilibrium quantity would decrease but the impact on equilibrium price would be ambiguous

Question 9

Market demand is obtained by adding individual demand curves vertically.

Accepted Answer

A) True 
 B)False

Question 10

A market supply curve is found by summing vertically all of the individual supply curves.

Accepted Answer

A) True 
 B)False

Question 11

A surplus is:

Accepted Answer

A) a situation in which quantity supplied is lower than quantity demanded 
B) a situation in which there is downward pressure on price 
C) a situation in which there is too much produced of a good 
D) a situation in which quantity supplied is greater than quantity demanded 
A) a situation in which quantity supplied is lower than quantity demanded 
B) a situation in which there is downward pressure on price 
C) a situation in which there is too much produced of a good 
D) a situation in which quantity supplied is greater than quantity demanded

Question 12

When analysing how some event affects a market, we check whether the price is the same as the quantity demanded.

Accepted Answer

A) True 
 B)False

Question 13

What is the difference between a change in demand and a change in quantity demanded? Graph your answer.

Accepted Answer

A change in demand refers to a

Question 14

If a seller in a competitive market chooses to charge more than the market price, then:

Accepted Answer

A) buyers will tend to make their purchases elsewhere 
B) the owners of the raw materials used in production would raise the prices for the raw materials 
C) other sellers would also raise their price 
D) buyers would tend to buy more from this seller 
A) buyers will tend to make their purchases elsewhere 
B) the owners of the raw materials used in production would raise the prices for the raw materials 
C) other sellers would also raise their price 
D) buyers would tend to buy more from this seller

Question 15

The side of the market that deals with the willingness and ability to produce and sell is:

Accepted Answer

A) demand 
B) competition 
C) supply 
D) a monopoly 
A) demand 
B) competition 
C) supply 
D) a monopoly

Question 16

The ultimate source of demand for a product is?

Accepted Answer

A) advertisers 
B) those people who purchase the product 
C) those firms that produce the product 
D) the value of the labour used to produce the product 
A) advertisers 
B) those people who purchase the product 
C) those firms that produce the product 
D) the value of the labour used to produce the product

Question 17

Graph 4-1   
-Refer to Graph 4-1.The movement from point A to point B on the graph would be caused by:

Accepted Answer

A) an increase in price 
B) a decrease in the price of a substitute good 
C) an increase in income 
D) a decrease in price 
A) an increase in price 
B) a decrease in the price of a substitute good 
C) an increase in income 
D) a decrease in price

Question 18

At the equilibrium price, quantity demanded is equal to quantity supplied.

Accepted Answer

A) True 
 B)False

Question 19

'Because of unseasonably cold weather, the supply of oranges has substantially decreased'.This statement indicates that:

Accepted Answer

A) the amount of oranges that will be available at various prices has declined 
B) the equilibrium quantity of oranges will rise 
C) consumers will be willing and able to buy fewer oranges at each possible price 
D) the price of oranges will fall 
A) the amount of oranges that will be available at various prices has declined 
B) the equilibrium quantity of oranges will rise 
C) consumers will be willing and able to buy fewer oranges at each possible price 
D) the price of oranges will fall

Question 20

Which one of the following is not a determinant of demand?

Accepted Answer

A) the price of a close-substitute good 
B) income levels of consumers 
C) tastes 
D) the prices of the energy inputs used to make the good 
A) the price of a close-substitute good 
B) income levels of consumers 
C) tastes 
D) the prices of the energy inputs used to make the good

Exam 4: The Market Forces of Supply and Demand

All else being constant, an increase in the number of cattle delivered to an auction to be marketed would:

Graph 4-5 -Refer to Graph 4-5.According to the graph, at a price of $3:

Doug likes tomatoes today more than he did yesterday.Ceteris paribus, which of the following statements is correct?

If good Z is 'inferior', then an increase in income will cause:

The price of any good adjusts until quantity demanded equals quantity supplied.

Graph 4-6 -Refer to the Graph 4-6.If price were $15, quantity supplied would be:

As a seller, you would be considered part of a perfectly competitive market if:

Suppose that demand decreases AND supply decreases.What would you expect to occur in the market for the good?

Market demand is obtained by adding individual demand curves vertically.

A market supply curve is found by summing vertically all of the individual supply curves.

A surplus is:

When analysing how some event affects a market, we check whether the price is the same as the quantity demanded.

What is the difference between a change in demand and a change in quantity demanded? Graph your answer.

If a seller in a competitive market chooses to charge more than the market price, then:

The side of the market that deals with the willingness and ability to produce and sell is:

The ultimate source of demand for a product is?

Graph 4-1 -Refer to Graph 4-1.The movement from point A to point B on the graph would be caused by:

At the equilibrium price, quantity demanded is equal to quantity supplied.

'Because of unseasonably cold weather, the supply of oranges has substantially decreased'.This statement indicates that:

Which one of the following is not a determinant of demand?

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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