Question 1

A surplus means that the quantity supplied is greater than the quantity demanded at the prevailing price.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following would shift the demand curve for chicken to the right?

Accepted Answer

A) Lower inputs for chicken producers. 
B) Higher subsidies to chicken producers. 
C) Higher price for beef. 
D) Lower price for lamb. 
A) Lower inputs for chicken producers. 
B) Higher subsidies to chicken producers. 
C) Higher price for beef. 
D) Lower price for lamb. C

Question 3

Consider the following statement: 'Due to the drought the quantity of water available for consumption reduced dramatically'.This will cause a/an:

Accepted Answer

A) downward movement along the supply curve for water. 
B) upward movement along the supply curve for water. 
C) rightward shift in the supply curve for water. 
D) leftward shift in the supply curve for water. 
A) downward movement along the supply curve for water. 
B) upward movement along the supply curve for water. 
C) rightward shift in the supply curve for water. 
D) leftward shift in the supply curve for water. D

Question 4

Which of the following states the definition of the law of supply?

Accepted Answer

A) More of a good is supplied at a lower price. 
B) There is a positive relationship between the price of a good and the quantity that buyers purchase. 
C) There is a positive relationship between the price of a good and the quantity offered for sale by suppliers. 
D) There is a negative relationship between the price of a good and the quantity offered for sale by suppliers. 
A) More of a good is supplied at a lower price. 
B) There is a positive relationship between the price of a good and the quantity that buyers purchase. 
C) There is a positive relationship between the price of a good and the quantity offered for sale by suppliers. 
D) There is a negative relationship between the price of a good and the quantity offered for sale by suppliers.

Question 5

Which of the following will not shift the demand curve for motorbikes?

Accepted Answer

A) An increase in the price of motorbikes. 
B) An increase in consumer income. 
C) An increase in the price of bicycles (a substitute). 
D) An increase in the price of helmets (a complement). 
A) An increase in the price of motorbikes. 
B) An increase in consumer income. 
C) An increase in the price of bicycles (a substitute). 
D) An increase in the price of helmets (a complement).

Question 6

Which of the following will cause a movement along the supply curve?

Accepted Answer

A) An increase or decrease in the cost of raw materials. 
B) An increase in labour costs. 
C) Changes in the cost of the machinery used to make a good. 
D) Changes in the market price of a good, other things being constant. 
A) An increase or decrease in the cost of raw materials. 
B) An increase in labour costs. 
C) Changes in the cost of the machinery used to make a good. 
D) Changes in the market price of a good, other things being constant.

Question 7

Exhibit 3-7 Supply and demand curves
  
-Which of the graphs in Exhibit 3-7 illustrates a shortage existing at the indicated market price?

Accepted Answer

A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  Graphs A and B. 
A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  Graphs A and B.

Question 8

Which of the following will cause a downward movement along a supply curve?

Accepted Answer

A) Decreases in raw-material costs. 
B) Decreases in labour costs. 
C) Decreases in the cost of machinery. 
D) Decreases in the market price of a good, other things being equal. 
A) Decreases in raw-material costs. 
B) Decreases in labour costs. 
C) Decreases in the cost of machinery. 
D) Decreases in the market price of a good, other things being equal.

Question 9

According to the law of demand:

Accepted Answer

A) as the price of a good increases, less units are demanded. 
B) as the price of a good increases, the same number of units is demanded. 
C) as the price of a good declines, less units are demanded. 
D) the price of a good does not correspond to the quantity demanded. 
A) as the price of a good increases, less units are demanded. 
B) as the price of a good increases, the same number of units is demanded. 
C) as the price of a good declines, less units are demanded. 
D) the price of a good does not correspond to the quantity demanded.

Question 10

In a market,competitive forces guarantee that any price other than the equilibrium price is:

Accepted Answer

A) market-clearing. 
B) stable. 
C) temporary. 
D) unaffordable. 
A) market-clearing. 
B) stable. 
C) temporary. 
D) unaffordable.

Question 11

Suppose that X and Y are substitute goods.If the price of good X increases,we can expect:

Accepted Answer

A) the demand for good X to shift to the left. 
B) an upward movement along the demand curve for good Y. 
C) the demand curve for good Y to shift to the right. 
D) a downward movement along the demand curve for good Y. 
E) the demand curve for good Y to shift to the left. 
A) the demand for good X to shift to the left. 
B) an upward movement along the demand curve for good Y. 
C) the demand curve for good Y to shift to the right. 
D) a downward movement along the demand curve for good Y. 
E) the demand curve for good Y to shift to the left.

Question 12

A market:

Accepted Answer

A) is defined as a local market such as farmers market . 
B) is any arrangement in which buyers and sellers determine the prices of goods and services exchanged. 
C) is a hypothetical arrangement in which buyers and sellers determine the prices of goods and services exchanged. 
D) can only be for goods but not for services. 
A) is defined as a local market such as farmers market . 
B) is any arrangement in which buyers and sellers determine the prices of goods and services exchanged. 
C) is a hypothetical arrangement in which buyers and sellers determine the prices of goods and services exchanged. 
D) can only be for goods but not for services.

Question 13

If people expect the price of packaged coffee to rise next week,coffee demand will:

Accepted Answer

A) decrease now. 
B) increase now. 
C) stay the same now and increase next week. 
D) stay the same now and decrease next week. 
E) stay the same now and next week. 
A) decrease now. 
B) increase now. 
C) stay the same now and increase next week. 
D) stay the same now and decrease next week. 
E) stay the same now and next week.

Question 14

'Coal mining companies anticipate an additional tax.' This statement indicates that the:

Accepted Answer

A) price of coal will fall. 
B) quantity of coal that will be available at any given price has decreased. 
C) demand for coal will shift to the left. 
D) quantity of coal that will be available at any given price has increased. 
A) price of coal will fall. 
B) quantity of coal that will be available at any given price has decreased. 
C) demand for coal will shift to the left. 
D) quantity of coal that will be available at any given price has increased.

Question 15

The law of supply states that:

Accepted Answer

A) there is a negative relationship between the quantity supplied and the price. 
B) the demand follows the supply. 
C) the price of the good is determined by the demand not by supply. 
D) the higher the price the more quantity will be supplied to the market. 
A) there is a negative relationship between the quantity supplied and the price. 
B) the demand follows the supply. 
C) the price of the good is determined by the demand not by supply. 
D) the higher the price the more quantity will be supplied to the market.

Question 16

Assume that croutons and soup are complementary goods.The effect on the soup market of a decrease in the price of croutons (other things being equal)would best be described as a/an:

Accepted Answer

A) decrease in the quantity of soup demanded. 
B) decrease in the demand for soup. 
C) increase in the quantity of soup demanded. 
D) increase in the demand for soup. 
A) decrease in the quantity of soup demanded. 
B) decrease in the demand for soup. 
C) increase in the quantity of soup demanded. 
D) increase in the demand for soup.

Question 17

Assuming that new cars are a normal good,a decrease in consumer income,other things being equal,will:

Accepted Answer

A) decrease the quantity demanded of new cars. 
B) increase the demand for new cars. 
C) decrease the demand for new cars. 
D) increase the quantity of new cars demanded. 
A) decrease the quantity demanded of new cars. 
B) increase the demand for new cars. 
C) decrease the demand for new cars. 
D) increase the quantity of new cars demanded.

Question 18

The supply curve reflects the:

Accepted Answer

A) inverse relationship between price and quantity offered. 
B) positive relationship between demand and supply. 
C) negative relationship between price and quantity bought. 
D) positive relationship between price and quantity bought. 
E) positive relationship between price and quantity offered. 
A) inverse relationship between price and quantity offered. 
B) positive relationship between demand and supply. 
C) negative relationship between price and quantity bought. 
D) positive relationship between price and quantity bought. 
E) positive relationship between price and quantity offered.

Question 19

What happens when a cyclone destroys the banana plantation?

Accepted Answer

A) The damaging effect of the cyclone means that farmers are only able to supply fewer bananas at each possible price and supply decreases. 
B) There is no effect of cyclone on market prices. 
C) The damaging effect of the cyclone means that farmers are able to produce apples instead of bananas with no effect on the supply of bananas. 
D) The prices for bananas will increase permanently. 
A) The damaging effect of the cyclone means that farmers are only able to supply fewer bananas at each possible price and supply decreases. 
B) There is no effect of cyclone on market prices. 
C) The damaging effect of the cyclone means that farmers are able to produce apples instead of bananas with no effect on the supply of bananas. 
D) The prices for bananas will increase permanently.

Question 20

Demand for goods and services reflects:

Accepted Answer

A) the principle that there is a positive relationship between the price and the quantity. 
B) the government's choices of taxes. 
C) the freedom of consumers to make their own choices about which goods and services to buy. 
D) the uncertainty of the need for a good as the price of the good increases. 
A) the principle that there is a positive relationship between the price and the quantity. 
B) the government's choices of taxes. 
C) the freedom of consumers to make their own choices about which goods and services to buy. 
D) the uncertainty of the need for a good as the price of the good increases.

A surplus means that the quantity supplied is greater than the quantity demanded at the prevailing price.

Which of the following would shift the demand curve for chicken to the right?

Consider the following statement: 'Due to the drought the quantity of water available for consumption reduced dramatically'.This will cause a/an:

Which of the following states the definition of the law of supply?

Which of the following will not shift the demand curve for motorbikes?

Which of the following will cause a movement along the supply curve?

Exhibit 3-7 Supply and demand curves -Which of the graphs in Exhibit 3-7 illustrates a shortage existing at the indicated market price?

Which of the following will cause a downward movement along a supply curve?

According to the law of demand:

In a market,competitive forces guarantee that any price other than the equilibrium price is:

Suppose that X and Y are substitute goods.If the price of good X increases,we can expect:

A market:

If people expect the price of packaged coffee to rise next week,coffee demand will:

'Coal mining companies anticipate an additional tax.' This statement indicates that the:

The law of supply states that:

Assume that croutons and soup are complementary goods.The effect on the soup market of a decrease in the price of croutons (other things being equal)would best be described as a/an:

Assuming that new cars are a normal good,a decrease in consumer income,other things being equal,will:

The supply curve reflects the:

What happens when a cyclone destroys the banana plantation?

Demand for goods and services reflects:

Thinking like an economist

Production possibilities and opportunity cost

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exam 3: Market demand and supply

A surplus means that the quantity supplied is greater than the quantity demanded at the prevailing price.

Which of the following would shift the demand curve for chicken to the right?

Consider the following statement: 'Due to the drought the quantity of water available for consumption reduced dramatically'.This will cause a/an:

Which of the following states the definition of the law of supply?

Which of the following will not shift the demand curve for motorbikes?

Which of the following will cause a movement along the supply curve?

Exhibit 3-7 Supply and demand curves -Which of the graphs in Exhibit 3-7 illustrates a shortage existing at the indicated market price?

Which of the following will cause a downward movement along a supply curve?

According to the law of demand:

In a market,competitive forces guarantee that any price other than the equilibrium price is:

Suppose that X and Y are substitute goods.If the price of good X increases,we can expect:

A market:

If people expect the price of packaged coffee to rise next week,coffee demand will:

'Coal mining companies anticipate an additional tax.' This statement indicates that the:

The law of supply states that:

Assume that croutons and soup are complementary goods.The effect on the soup market of a decrease in the price of croutons (other things being equal)would best be described as a/an:

Assuming that new cars are a normal good,a decrease in consumer income,other things being equal,will:

The supply curve reflects the:

What happens when a cyclone destroys the banana plantation?

Demand for goods and services reflects:

Thinking like an economist

Production possibilities and opportunity cost

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters