Question 1

What is the downward-sloping line that relates prices and quantity demanded

Accepted Answer

A) demand schedule 
B) demand curve 
C) quantity demanded line 
D) quantity demanded curve 
A) demand schedule 
B) demand curve 
C) quantity demanded line 
D) quantity demanded curve

Question 2

Market demand is given as QD = 300 - 0.5P.Market supply is given as QS = 50 + 2P.What would result if the market price were $140

Accepted Answer

A) a shortage of 100 
B) a surplus of 100 
C) a surplus of 280 
D) a shortage of 280 
A) a shortage of 100 
B) a surplus of 100 
C) a surplus of 280 
D) a shortage of 280

Question 3

What will a technological advancement do

Accepted Answer

A) shift the supply curve to the right 
B) shift the demand curve to the left 
C) shift the demand curve to the right 
D) shift the supply curve to the left 
A) shift the supply curve to the right 
B) shift the demand curve to the left 
C) shift the demand curve to the right 
D) shift the supply curve to the left

Question 4

Figure 4-1
  
-Refer to the Figure 4-1.What could cause the movement from S₁ to S

Accepted Answer

A) a decrease in the price of the good 
B) an improvement in technology 
C) an increase in income 
D) an increase in input prices 
A) a decrease in the price of the good 
B) an improvement in technology 
C) an increase in income 
D) an increase in input prices

Question 5

Nancy likes pasta today more than she did yesterday.What does this reveal about Nancy's circumstances

Accepted Answer

A) Nancy must now perceive pasta as a luxury. 
B) Nancy must have received an increase in income. 
C) Nancy must be now willing to pay more than before for pasta. 
D) Nancy must now perceive pasta as a normal good. 
A) Nancy must now perceive pasta as a luxury. 
B) Nancy must have received an increase in income. 
C) Nancy must be now willing to pay more than before for pasta. 
D) Nancy must now perceive pasta as a normal good.

Question 6

In a free market,who determines how much of a good will be sold and the price at which it is sold

Accepted Answer

A) suppliers 
B) demanders 
C) the government 
D) suppliers and demanders together 
A) suppliers 
B) demanders 
C) the government 
D) suppliers and demanders together

Question 7

Market demand is given as QD = 80 - P.Market supply is given as QS = 3P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market

Accepted Answer

A) price will be $20 and quantity will be 60 
B) price will be $45 and quantity will be 15 
C) price will be $40 and quantity will be 20 
D) price will be $15 and quantity will be 45 
A) price will be $20 and quantity will be 60 
B) price will be $45 and quantity will be 15 
C) price will be $40 and quantity will be 20 
D) price will be $15 and quantity will be 45

Question 8

Figure 4-4
  
-Refer to the Figure 4-4.If the price is $25,what would happen

Accepted Answer

A) There would be a surplus of 300 and the price would fall. 
B) There would be a surplus of 200 and the price would fall. 
C) There would be a shortage of 200 and the price would rise. 
D) There would be a shortage of 300 and the price would rise. 
A) There would be a surplus of 300 and the price would fall. 
B) There would be a surplus of 200 and the price would fall. 
C) There would be a shortage of 200 and the price would rise. 
D) There would be a shortage of 300 and the price would rise.

Question 9

Suppose there is an earthquake that destroys several seaside resorts.Which of the following would NOT occur as a direct result of this event

Accepted Answer

A) Sellers would not be willing to produce and sell as much as before at each relevant price. 
B) The supply would decrease. 
C) Buyers would not be willing to buy as much as before at each relevant price. 
D) The equilibrium price would rise. 
A) Sellers would not be willing to produce and sell as much as before at each relevant price. 
B) The supply would decrease. 
C) Buyers would not be willing to buy as much as before at each relevant price. 
D) The equilibrium price would rise.

Question 10

Market demand is given as QD = 200 - 3P.Market supply is given as QS = P + 10.If price increases from $10 to $15,what is the price elasticity of demand

Accepted Answer

A) 0.2 
B) 0.7 
C) 1.3 
D) 1.7 
A) 0.2 
B) 0.7 
C) 1.3 
D) 1.7

Question 11

A supply curve slopes upward because,all else equal,a higher price means a greater quantity supplied.

Accepted Answer

A) True 
 B)False

Question 12

A local cable TV company might be a monopolist.

Accepted Answer

A) True 
 B)False

Question 13

What does the law of demand imply

Accepted Answer

A) When price rises, quantity demanded falls. 
B) When price rises, quantity demanded rises also. 
C) When price falls, quantity supplied rises. 
D) When price falls, quantity supplied falls also. 
A) When price rises, quantity demanded falls. 
B) When price rises, quantity demanded rises also. 
C) When price falls, quantity supplied rises. 
D) When price falls, quantity supplied falls also.

Question 14

Market demand is given as QD = 150 - P.Market supply is given as QS = 4P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market

Accepted Answer

A) price will be $96 and quantity will be 25 
B) price will be $50 and quantity will be 100 
C) price will be $30 and quantity will be 120 
D) price will be $30 and quantity will be 150 
A) price will be $96 and quantity will be 25 
B) price will be $50 and quantity will be 100 
C) price will be $30 and quantity will be 120 
D) price will be $30 and quantity will be 150

Question 15

Which of the following is NOT one of the steps in analyzing how an event affects a market

Accepted Answer

A) Determine the number of market participants. 
B) Decide whether the curve shifts to the right or to the left. 
C) Determine whether the event shifts the supply, the demand, or both curves. 
D) Use a supply-demand diagram to examine how the shift(s) affect the equilibrium. 
A) Determine the number of market participants. 
B) Decide whether the curve shifts to the right or to the left. 
C) Determine whether the event shifts the supply, the demand, or both curves. 
D) Use a supply-demand diagram to examine how the shift(s) affect the equilibrium.

Question 16

If a study by the CMA found that brown sugar caused weight gain while white sugar caused weight loss,what would we see

Accepted Answer

A) an increase in demand for brown sugar and a decrease in demand for white sugar 
B) no change in either demand because weight loss is not a nonprice determinant of demand 
C) an increase in demand for white sugar, and a decrease in the demand for brown sugar 
D) a decrease in the demand for white sugar, but no change in the demand for brown sugar 
A) an increase in demand for brown sugar and a decrease in demand for white sugar 
B) no change in either demand because weight loss is not a nonprice determinant of demand 
C) an increase in demand for white sugar, and a decrease in the demand for brown sugar 
D) a decrease in the demand for white sugar, but no change in the demand for brown sugar

Question 17

Suppose that the incomes of buyers in a particular market for a normal good decrease 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) Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
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) Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

Question 18

Market demand is given as QD = 75 - P.Market supply is given as QS = 3P + 15.If price increases from $11 to $14,what is the price elasticity of demand

Accepted Answer

A) 0.2 
B) 0.8 
C) 1.0 
D) 2.0 
A) 0.2 
B) 0.8 
C) 1.0 
D) 2.0

Question 19

Suppose you wish to analyze the change in the equilibrium price of lumber as a result of pine beetle infestations that are destroying trees in the West.What would your first step be

Accepted Answer

A) to identify the new equilibrium point 
B) to decide whether the fires affect the quantity demanded 
C) to decide whether the fires affect the price 
D) to decide whether the fires shift demand or supply 
A) to identify the new equilibrium point 
B) to decide whether the fires affect the quantity demanded 
C) to decide whether the fires affect the price 
D) to decide whether the fires shift demand or supply

Question 20

Workers at a bicycle assembly plant currently make minimum wage.If the provincial government increases the minimum wage by $1.00 an hour,what will likely happen

Accepted Answer

A) Demand for bicycle assembly workers will increase. 
B) Supply of bicycles will shift to the right. 
C) Supply of bicycles will shift to the left. 
D) The firm must increase output to maintain profit levels. 
A) Demand for bicycle assembly workers will increase. 
B) Supply of bicycles will shift to the right. 
C) Supply of bicycles will shift to the left. 
D) The firm must increase output to maintain profit levels.

Exam 4: The Market Forces of Supply and Demand

What is the downward-sloping line that relates prices and quantity demanded

Market demand is given as QD = 300 - 0.5P.Market supply is given as QS = 50 + 2P.What would result if the market price were $140

What will a technological advancement do

Figure 4-1 -Refer to the Figure 4-1.What could cause the movement from S₁ to S

Nancy likes pasta today more than she did yesterday.What does this reveal about Nancy's circumstances

In a free market,who determines how much of a good will be sold and the price at which it is sold

Market demand is given as QD = 80 - P.Market supply is given as QS = 3P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market

Figure 4-4 -Refer to the Figure 4-4.If the price is $25,what would happen

Suppose there is an earthquake that destroys several seaside resorts.Which of the following would NOT occur as a direct result of this event

Market demand is given as QD = 200 - 3P.Market supply is given as QS = P + 10.If price increases from $10 to $15,what is the price elasticity of demand

A supply curve slopes upward because,all else equal,a higher price means a greater quantity supplied.

A local cable TV company might be a monopolist.

What does the law of demand imply

Market demand is given as QD = 150 - P.Market supply is given as QS = 4P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market

Which of the following is NOT one of the steps in analyzing how an event affects a market

If a study by the CMA found that brown sugar caused weight gain while white sugar caused weight loss,what would we see

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

Market demand is given as QD = 75 - P.Market supply is given as QS = 3P + 15.If price increases from $11 to $14,what is the price elasticity of demand

Suppose you wish to analyze the change in the equilibrium price of lumber as a result of pine beetle infestations that are destroying trees in the West.What would your first step be

Workers at a bicycle assembly plant currently make minimum wage.If the provincial government increases the minimum wage by $1.00 an hour,what will likely happen

Ten Principles of 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

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters

Market demand is given as Q_D= 300 - 0.5P.Market supply is given as Q_S= 50 + 2P.What would result if the market price were $140

Market demand is given as Q_D= 80 - P.Market supply is given as Q_S= 3P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market

Market demand is given as Q_D= 200 - 3P.Market supply is given as Q_S= P + 10.If price increases from $10 to $15,what is the price elasticity of demand

Market demand is given as Q_D= 150 - P.Market supply is given as Q_S= 4P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market

Market demand is given as Q_D= 75 - P.Market supply is given as Q_S= 3P + 15.If price increases from $11 to $14,what is the price elasticity of demand