Question 1

A technological advance that reduces the cost of producing computers will shift the supply curve of computers to the right.

Accepted Answer

A) True 
 B)False

Question 2

The price of automobiles has increased sharply lately. As a result, what have automobile dealers noticed?

Accepted Answer

A)  Demand has decreased. 
B)  Demand has increased. 
C)  Quantity demanded has increased. 
D)  Quantity demanded has decreased. 
A)  Demand has decreased. 
B)  Demand has increased. 
C)  Quantity demanded has increased. 
D)  Quantity demanded has decreased.

Question 3

Which of the following changes does NOT cause a change in demand?

Accepted Answer

A)  a change in the tastes of demanders 
B)  a change in prices of unrelated goods 
C)  a change in the incomes of demanders 
D)  a change in the number of demanders 
A)  a change in the tastes of demanders 
B)  a change in prices of unrelated goods 
C)  a change in the incomes of demanders 
D)  a change in the number of demanders

Question 4

When the price of orange juice increases, consumers may switch to apple juice or tomato juice. What is this switch a result of?

Accepted Answer

A)  the complement effect 
B)  the price effect 
C)  the substitution effect 
D)  the income effect 
A)  the complement effect 
B)  the price effect 
C)  the substitution effect 
D)  the income effect

Question 5

Which of the following would NOT shift a product's demand curve?

Accepted Answer

A)  an increase in the price of the product 
B)  an increase in the price of a complement 
C)  an increase in the price of a substitute 
D)  a decrease in consumer income 
A)  an increase in the price of the product 
B)  an increase in the price of a complement 
C)  an increase in the price of a substitute 
D)  a decrease in consumer income

Question 6

A decrease in wages will increase the supply of most goods.

Accepted Answer

A) True 
 B)False

Question 7

When the price of a good falls relative to other goods and the consumer consequently buys more of this good, what is this referred to as?

Accepted Answer

A)  the income effect 
B)  the substitution effect 
C)  the net effect 
D)  the complement effect 
A)  the income effect 
B)  the substitution effect 
C)  the net effect 
D)  the complement effect

Question 8

Andy views beer and pizza as complements to one another. If the price of pizza decreases, what would economists expect?

Accepted Answer

A)  Andy's demand for pizza to decrease 
B)  Andy's demand for pizza to increase 
C)  Andy's demand for beer to decrease 
D)  Andy's demand for beer to increase 
A)  Andy's demand for pizza to decrease 
B)  Andy's demand for pizza to increase 
C)  Andy's demand for beer to decrease 
D)  Andy's demand for beer to increase

Question 9

Which of the following would be least likely to affect the supply of automobiles?

Accepted Answer

A)  increased wages for members of the Canadian Auto Workers union 
B)  a successful physical fitness plan encouraging Canadians to walk rather than drive to their destinations 
C)  higher prices for steel and other resources used in producing automobiles 
D)  a technological improvement reducing the production costs of automobiles 
A)  increased wages for members of the Canadian Auto Workers union 
B)  a successful physical fitness plan encouraging Canadians to walk rather than drive to their destinations 
C)  higher prices for steel and other resources used in producing automobiles 
D)  a technological improvement reducing the production costs of automobiles

Question 10

What does a downward-sloping demand curve illustrate?

Accepted Answer

A)  It illustrates the inverse relationship between price and quantity demanded; as price increases, the quantity demanded decreases. 
B)  It illustrates the inverse relationship between price and quantity supplied; as price increases, the quantity supplied decreases. 
C)  It illustrates the direct relationship between price and quantity demanded; as price increases, the quantity demanded increases. 
D)  It illustrates the direct relationship between price and quantity supplied; as price increases, the quantity supplied increases. 
A)  It illustrates the inverse relationship between price and quantity demanded; as price increases, the quantity demanded decreases. 
B)  It illustrates the inverse relationship between price and quantity supplied; as price increases, the quantity supplied decreases. 
C)  It illustrates the direct relationship between price and quantity demanded; as price increases, the quantity demanded increases. 
D)  It illustrates the direct relationship between price and quantity supplied; as price increases, the quantity supplied increases.

Question 11

FIGURE 3-1
  
-Refer to Figure 3-1. Beginning on D₁, what would a shift to D₂ indicate?

Accepted Answer

A)  an increase in quantity demanded 
B)  an increase in demand 
C)  a decrease in demand 
D)  a decrease in quantity demanded 
A)  an increase in quantity demanded 
B)  an increase in demand 
C)  a decrease in demand 
D)  a decrease in quantity demanded

Question 12

Suppose the price of gasoline and other petroleum products declines sharply. Which of the following will most likely occur as a result of the lower petroleum prices?

Accepted Answer

A)  an increase in demand for solar heating systems 
B)  an increase in demand for larger, more powerful automobiles 
C)  an increase in demand for home insulation products 
D)  an increase in demand for gasoline 
A)  an increase in demand for solar heating systems 
B)  an increase in demand for larger, more powerful automobiles 
C)  an increase in demand for home insulation products 
D)  an increase in demand for gasoline

Question 13

The law of demand suggests that a decrease in the price of a product will increase the demand for that product.

Accepted Answer

A) True 
 B)False

Question 14

A severe freeze has once again damaged the Ontario grape crop. What will the impact be on the market for wine?

Accepted Answer

A)  a leftward shift of the supply curve 
B)  a leftward shift of the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price 
C)  a leftward shift of both the supply and demand curves 
D)  a leftward shift of the demand curve, as consumers try to economize because of the shortage 
A)  a leftward shift of the supply curve 
B)  a leftward shift of the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price 
C)  a leftward shift of both the supply and demand curves 
D)  a leftward shift of the demand curve, as consumers try to economize because of the shortage

Question 15

FIGURE 3-4
  
-Refer to Figure 3-4. What does a change from Point A to Point D represent?

Accepted Answer

A)  an increase in quantity demanded 
B)  a decrease in quantity demanded 
C)  an increase in demand 
D)  a decrease in demand 
A)  an increase in quantity demanded 
B)  a decrease in quantity demanded 
C)  an increase in demand 
D)  a decrease in demand

Question 16

Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus. Last week, Antonio's supplier of pepperoni informed him of a 25 percent increase in the cost of pepperoni. What variable that determines the position of the supply curve has changed?

Accepted Answer

A)  input prices 
B)  future expectations 
C)  number of suppliers 
D)  technological changes 
A)  input prices 
B)  future expectations 
C)  number of suppliers 
D)  technological changes

Question 17

The price of peanut butter falls and as a result the demand for jam increases. What can we conclude?

Accepted Answer

A)  Peanut butter and jam are inferior goods. 
B)  The marginal value of jam is greater than the marginal value of peanut butter. 
C)  Peanut butter and jam are complements. 
D)  Peanut butter and jam are substitutes. 
A)  Peanut butter and jam are inferior goods. 
B)  The marginal value of jam is greater than the marginal value of peanut butter. 
C)  Peanut butter and jam are complements. 
D)  Peanut butter and jam are substitutes.

Question 18

Skateboards International of Regina, Saskatchewan, was able to sell 20 000 skateboards at a price of $60 in 2010. In 2011, it was able to sell only 12 000 of the same skateboards at a price of $60. What has Skateboards International evidently experienced?

Accepted Answer

A)  an increase in quantity supplied 
B)  a decrease in demand 
C)  an increase in demand 
D)  an increase in supply 
A)  an increase in quantity supplied 
B)  a decrease in demand 
C)  an increase in demand 
D)  an increase in supply

Question 19

Ceteris paribus, what effect would an increase in the price of DVD players tend to have?

Accepted Answer

A)  It would increase the demand for DVD players. 
B)  It would decrease the demand for DVD players. 
C)  It would increase the price of televisions, a complement to DVD players. 
D)  It would increase the demand for VCRs, a substitute for DVD players. 
A)  It would increase the demand for DVD players. 
B)  It would decrease the demand for DVD players. 
C)  It would increase the price of televisions, a complement to DVD players. 
D)  It would increase the demand for VCRs, a substitute for DVD players.

Question 20

If consumers are less willing and able to pay for each level of output than they were previously, what is the effect in the market?

Accepted Answer

A)  Demand will decrease. 
B)  Supply will decrease. 
C)  Demand will increase. 
D)  Supply will increase. 
A)  Demand will decrease. 
B)  Supply will decrease. 
C)  Demand will increase. 
D)  Supply will increase.

A technological advance that reduces the cost of producing computers will shift the supply curve of computers to the right.

The price of automobiles has increased sharply lately. As a result, what have automobile dealers noticed?

Which of the following changes does NOT cause a change in demand?

When the price of orange juice increases, consumers may switch to apple juice or tomato juice. What is this switch a result of?

Which of the following would NOT shift a product's demand curve?

A decrease in wages will increase the supply of most goods.

When the price of a good falls relative to other goods and the consumer consequently buys more of this good, what is this referred to as?

Andy views beer and pizza as complements to one another. If the price of pizza decreases, what would economists expect?

Which of the following would be least likely to affect the supply of automobiles?

What does a downward-sloping demand curve illustrate?

FIGURE 3-1 -Refer to Figure 3-1. Beginning on D₁, what would a shift to D₂ indicate?

Suppose the price of gasoline and other petroleum products declines sharply. Which of the following will most likely occur as a result of the lower petroleum prices?

The law of demand suggests that a decrease in the price of a product will increase the demand for that product.

A severe freeze has once again damaged the Ontario grape crop. What will the impact be on the market for wine?

FIGURE 3-4 -Refer to Figure 3-4. What does a change from Point A to Point D represent?

Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus. Last week, Antonio's supplier of pepperoni informed him of a 25 percent increase in the cost of pepperoni. What variable that determines the position of the supply curve has changed?

The price of peanut butter falls and as a result the demand for jam increases. What can we conclude?

Skateboards International of Regina, Saskatchewan, was able to sell 20 000 skateboards at a price of $60 in 2010. In 2011, it was able to sell only 12 000 of the same skateboards at a price of $60. What has Skateboards International evidently experienced?

Ceteris paribus, what effect would an increase in the price of DVD players tend to have?

If consumers are less willing and able to pay for each level of output than they were previously, what is the effect in the market?

The Role and Method of Economics

Scarcity, Trade-Offs, and Production Possibilities

Bringing Supply and Demand Together

Elasticity

Market Efficiency and Market Failure

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labour Markets and the Distribution of Income

The Environment

Filters

Exam 3: Supply and Demand

A technological advance that reduces the cost of producing computers will shift the supply curve of computers to the right.

The price of automobiles has increased sharply lately. As a result, what have automobile dealers noticed?

Which of the following changes does NOT cause a change in demand?

When the price of orange juice increases, consumers may switch to apple juice or tomato juice. What is this switch a result of?

Which of the following would NOT shift a product's demand curve?

A decrease in wages will increase the supply of most goods.

When the price of a good falls relative to other goods and the consumer consequently buys more of this good, what is this referred to as?

Andy views beer and pizza as complements to one another. If the price of pizza decreases, what would economists expect?

Which of the following would be least likely to affect the supply of automobiles?

What does a downward-sloping demand curve illustrate?

FIGURE 3-1 -Refer to Figure 3-1. Beginning on D₁, what would a shift to D₂ indicate?

Suppose the price of gasoline and other petroleum products declines sharply. Which of the following will most likely occur as a result of the lower petroleum prices?

The law of demand suggests that a decrease in the price of a product will increase the demand for that product.

A severe freeze has once again damaged the Ontario grape crop. What will the impact be on the market for wine?

FIGURE 3-4 -Refer to Figure 3-4. What does a change from Point A to Point D represent?

Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus. Last week, Antonio's supplier of pepperoni informed him of a 25 percent increase in the cost of pepperoni. What variable that determines the position of the supply curve has changed?

The price of peanut butter falls and as a result the demand for jam increases. What can we conclude?

Skateboards International of Regina, Saskatchewan, was able to sell 20 000 skateboards at a price of $60 in 2010. In 2011, it was able to sell only 12 000 of the same skateboards at a price of $60. What has Skateboards International evidently experienced?

Ceteris paribus, what effect would an increase in the price of DVD players tend to have?

If consumers are less willing and able to pay for each level of output than they were previously, what is the effect in the market?

The Role and Method of Economics

Scarcity, Trade-Offs, and Production Possibilities

Bringing Supply and Demand Together

Elasticity

Market Efficiency and Market Failure

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labour Markets and the Distribution of Income

The Environment

Filters