Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Why does the quantity of a good demanded decrease when its price increases?

Accepted Answer

A) Complements become relatively cheaper when the price of a good increases. 
B) Consumer preferences change when the price of a good changes. 
C) The nominal income of consumers falls when the price of a good increases. 
D) Substitutes become relatively cheaper when the price of a good increases. 
A) Complements become relatively cheaper when the price of a good increases. 
B) Consumer preferences change when the price of a good changes. 
C) The nominal income of consumers falls when the price of a good increases. 
D) Substitutes become relatively cheaper when the price of a good increases.

Question 3

How is the market demand curve determined?

Accepted Answer

A) by subtracting the individual demands curves from the supply curve 
B) by horizontally summing the individual demand curves 
C) by vertically summing the individual demand curves 
D) by averaging all the individual demand curves 
A) by subtracting the individual demands curves from the supply curve 
B) by horizontally summing the individual demand curves 
C) by vertically summing the individual demand curves 
D) by averaging all the individual demand curves

Question 4

Which of the following statements about the supply curve is the most accurate?

Accepted Answer

A) It shows how the average cost of production varies with price. 
B) It shows the same basic information as a demand curve. 
C) It shows how the quantity demanded varies with price. 
D) It shows how the quantity supplied varies with price. 
A) It shows how the average cost of production varies with price. 
B) It shows the same basic information as a demand curve. 
C) It shows how the quantity demanded varies with price. 
D) It shows how the quantity supplied varies with price.

Question 5

In economics,what does the demand for a good refer to?

Accepted Answer

A) The amount people would like to have if the good was free. 
B) The amount people need to achieve a minimum standard of living. 
C) The amount people will buy at alternative income levels. 
D) The amount people will buy at various prices. 
A) The amount people would like to have if the good was free. 
B) The amount people need to achieve a minimum standard of living. 
C) The amount people will buy at alternative income levels. 
D) The amount people will buy at various prices.

Question 6

When a demand schedule is drawn in a graph,which of the following statements best describes the graph?

Accepted Answer

A) Other variables are held constant. 
B) The resulting curve has a positive slope. 
C) Quantity is measured on the vertical axis. 
D) Price is measured on the horizontal axis. 
A) Other variables are held constant. 
B) The resulting curve has a positive slope. 
C) Quantity is measured on the vertical axis. 
D) Price is measured on the horizontal axis.

Question 7

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 8

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 9

Ceteris paribus,if new manufacturers enter the computer industry,which of the following will occur?

Accepted Answer

A) The supply curve shifts to the right. 
B) The supply curve shifts to the left. 
C) The demand curve shifts to the right. 
D) The demand curve shifts to the left. 
A) The supply curve shifts to the right. 
B) The supply curve shifts to the left. 
C) The demand curve shifts to the right. 
D) The demand curve shifts to the left.

Question 10

The substitution effect helps to explain why demand curves are downward sloping.

Accepted Answer

A) True 
 B)False

Question 11

What is the difference between a change in demand and a change in quantity demanded?

Accepted Answer

A change in quantity demanded is caused

Question 12

TABLE 3-1
  
-Refer to Table 3-1.It illustrates the demand schedules for gourmet ice cream of two individuals and the rest of the market.At a price of $8,what would the quantity demanded in the market be?

Accepted Answer

A) 12 
B) 22 
C) 31 
D) 39 
A) 12 
B) 22 
C) 31 
D) 39

Question 13

Which of the following statements about the demand curve for a typical good is the most accurate?

Accepted Answer

A) It has an inverse slope because as the price goes up, the good has more profitability. 
B) It has a negative slope because consumer incomes fall as the price of the good rises. 
C) It has a negative slope because some consumers switch to other goods as the price rises. 
D) It has a negative slope because the good has less "snob appeal" as its price falls. 
A) It has an inverse slope because as the price goes up, the good has more profitability. 
B) It has a negative slope because consumer incomes fall as the price of the good rises. 
C) It has a negative slope because some consumers switch to other goods as the price rises. 
D) It has a negative slope because the good has less "snob appeal" as its price falls.

Question 14

Which of the following would NOT cause a change in the demand for cheese?

Accepted Answer

A) an increase in the population of cheese lovers 
B) an increase in the income of cheese consumers 
C) an increase in the price of cheese 
D) an increase in the price of crackers, which are consumed with cheese 
A) an increase in the population of cheese lovers 
B) an increase in the income of cheese consumers 
C) an increase in the price of cheese 
D) an increase in the price of crackers, which are consumed with cheese

Question 15

The law of supply suggests that a decrease in the price of a product will increase the quantity supplied for that product.

Accepted Answer

A) True 
 B)False

Question 16

What two effects support the law of demand?

Accepted Answer

The income effect suggests that an incre

Question 17

Is it possible for a BMW to be an inferior good? Explain.

Accepted Answer

Yes.An inferior good is defined as a goo

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

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 20

Suppose we observe an increase in the price of oranges.Which of the following is the most likely cause?

Accepted Answer

A) a scientific discovery that states that oranges cause tooth decay 
B) good growing weather in Florida 
C) a decrease in income if oranges are a normal good 
D) an increase in the price of apples 
A) a scientific discovery that states that oranges cause tooth decay 
B) good growing weather in Florida 
C) a decrease in income if oranges are a normal good 
D) an increase in the price of apples

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

Why does the quantity of a good demanded decrease when its price increases?

How is the market demand curve determined?

Which of the following statements about the supply curve is the most accurate?

In economics,what does the demand for a good refer to?

When a demand schedule is drawn in a graph,which of the following statements best describes the graph?

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?

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

Ceteris paribus,if new manufacturers enter the computer industry,which of the following will occur?

The substitution effect helps to explain why demand curves are downward sloping.

What is the difference between a change in demand and a change in quantity demanded?

TABLE 3-1 -Refer to Table 3-1.It illustrates the demand schedules for gourmet ice cream of two individuals and the rest of the market.At a price of $8,what would the quantity demanded in the market be?

Which of the following statements about the demand curve for a typical good is the most accurate?

Which of the following would NOT cause a change in the demand for cheese?

The law of supply suggests that a decrease in the price of a product will increase the quantity supplied for that product.

What two effects support the law of demand?

Is it possible for a BMW to be an inferior good? Explain.

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?

What does a downward-sloping demand curve illustrate?

Suppose we observe an increase in the price of oranges.Which of the following is the most likely cause?

The Role and Method of Economics

Scarcity, trade-Offs, and Production Possibilities

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters

Exam 3: Supply and Demand

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

Why does the quantity of a good demanded decrease when its price increases?

How is the market demand curve determined?

Which of the following statements about the supply curve is the most accurate?

In economics,what does the demand for a good refer to?

When a demand schedule is drawn in a graph,which of the following statements best describes the graph?

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?

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

Ceteris paribus,if new manufacturers enter the computer industry,which of the following will occur?

The substitution effect helps to explain why demand curves are downward sloping.

What is the difference between a change in demand and a change in quantity demanded?

TABLE 3-1 -Refer to Table 3-1.It illustrates the demand schedules for gourmet ice cream of two individuals and the rest of the market.At a price of $8,what would the quantity demanded in the market be?

Which of the following statements about the demand curve for a typical good is the most accurate?

Which of the following would NOT cause a change in the demand for cheese?

The law of supply suggests that a decrease in the price of a product will increase the quantity supplied for that product.

What two effects support the law of demand?

Is it possible for a BMW to be an inferior good? Explain.

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?

What does a downward-sloping demand curve illustrate?

Suppose we observe an increase in the price of oranges.Which of the following is the most likely cause?

The Role and Method of Economics

Scarcity, trade-Offs, and Production Possibilities

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters