Question 1

Wheat is the main input in the production of flour. If the price of wheat decreases, all else equal, what would we expect?

Accepted Answer

A) the supply of flour to be unaffected 
B) the supply of flour to decrease 
C) the supply of flour to increase 
D) the demand for flour to decrease 
A) the supply of flour to be unaffected 
B) the supply of flour to decrease 
C) the supply of flour to increase 
D) the demand for flour to decrease

Question 2

Wheat is the main input in the production of flour. If the price of wheat increases, all else equal, what would we expect?

Accepted Answer

A) the supply of flour to be unaffected 
B) the supply of flour to decrease 
C) the supply of flour to increase 
D) the demand for flour to decrease 
A) the supply of flour to be unaffected 
B) the supply of flour to decrease 
C) the supply of flour to increase 
D) the demand for flour to decrease

Question 3

If there is an improvement in the technology of producing a product, the supply curve for that product will shift to the left.

Accepted Answer

A) True 
 B)False

Question 4

What happens in a competitive market?

Accepted Answer

A) Only a few sellers sell the same product. 
B) Each seller has limited control over the price of his product. 
C) If one buyer chooses to purchase a large quantity of the product, the price will rise. 
D) If one seller withholds his product from the market, prices will rise. 
A) Only a few sellers sell the same product. 
B) Each seller has limited control over the price of his product. 
C) If one buyer chooses to purchase a large quantity of the product, the price will rise. 
D) If one seller withholds his product from the market, prices will rise.

Question 5

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following demonstrates the law of demand?

Accepted Answer

A) Jon buys more pretzels at $1.50 each since he got a $1 raise at work. 
B) Melissa buys fewer muffins at $0.75 each than at $1 each. 
C) Dave buys more donuts at $0.25 each than at $0.50 each. 
D) Kendra buys fewer Snickers at $0.60 each since the price of Milky Ways fell to $0.50 each. 
A) Jon buys more pretzels at $1.50 each since he got a $1 raise at work. 
B) Melissa buys fewer muffins at $0.75 each than at $1 each. 
C) Dave buys more donuts at $0.25 each than at $0.50 each. 
D) Kendra buys fewer Snickers at $0.60 each since the price of Milky Ways fell to $0.50 each.

Question 7

Suppose that scientists find evidence that proves chocolate pudding lowers cholesterol. What would we expect to see?

Accepted Answer

A) no change in the demand for chocolate pudding 
B) a decrease in the demand for chocolate pudding 
C) an increase in the demand for chocolate pudding 
D) a decrease in the supply of chocolate pudding 
A) no change in the demand for chocolate pudding 
B) a decrease in the demand for chocolate pudding 
C) an increase in the demand for chocolate pudding 
D) a decrease in the supply of chocolate pudding

Question 8

Market demand is given as Qd = 60 - P. Market supply is given as Qs = 3P. What would result if the market price were $10?

Accepted Answer

A) a shortage of 20 
B) a surplus of 20 
C) a surplus of 30 
D) a shortage of 30 
A) a shortage of 20 
B) a surplus of 20 
C) a surplus of 30 
D) a shortage of 30

Question 9

Figure 4-7  
-Refer to Figure 4-7. What does the movement from point B to point A on the graph show?

Accepted Answer

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

Question 10

Market demand is given as Qd = 220 - 4P. Market supply is given as Qs = 2P + 40. What would result if the market price were $10?

Accepted Answer

A) a shortage of 120 
B) a surplus of 120 
C) a surplus of 80 
D) a shortage of 80 
A) a shortage of 120 
B) a surplus of 120 
C) a surplus of 80 
D) a shortage of 80

Question 11

What is a demand curve?

Accepted Answer

A) the downward-sloping line relating the price of the good to the quantity demanded 
B) the upward-sloping line relating price to quantity supplied 
C) the curve that relates income to quantity demanded 
D) showing the same relationship between two goods as a production possibilities frontier 
A) the downward-sloping line relating the price of the good to the quantity demanded 
B) the upward-sloping line relating price to quantity supplied 
C) the curve that relates income to quantity demanded 
D) showing the same relationship between two goods as a production possibilities frontier

Question 12

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) Both equilibrium price and equilibrium quantity would increase. 
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) Both equilibrium price and equilibrium quantity would increase. 
D) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

Question 13

Figure 4-6  
-Refer to Figure 4-6. What could cause the shift from D1 to D?

Accepted Answer

A) an increase in price 
B) a decrease in the price of a complement 
C) an increase in technology 
D) a decrease in the price of a substitute 
A) an increase in price 
B) a decrease in the price of a complement 
C) an increase in technology 
D) a decrease in the price of a substitute

Question 14

Suppose that demand increases AND supply decreases. What would happen in the market for the good?

Accepted Answer

A) Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B) Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. 
C) Both equilibrium price and quantity would increase. 
D) Both equilibrium price and quantity would decrease. 
A) Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B) Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. 
C) Both equilibrium price and quantity would increase. 
D) Both equilibrium price and quantity would decrease.

Question 15

Which of the following is NOT a determinant of demand?

Accepted Answer

A) the price of a resource 
B) the price of a complementary good 
C) the price of the good next month 
D) the price of a substitute good 
A) the price of a resource 
B) the price of a complementary good 
C) the price of the good next month 
D) the price of a substitute good

Question 16

Suppose you make jewellery. If the price of gold increases, what would we expect you to do?

Accepted Answer

A) be willing and able to produce less jewellery than before at each possible price 
B) be willing and able to produce more jewellery than before at each possible price 
C) face a greater demand for your jewellery 
D) face a weaker demand for your jewellery 
A) be willing and able to produce less jewellery than before at each possible price 
B) be willing and able to produce more jewellery than before at each possible price 
C) face a greater demand for your jewellery 
D) face a weaker demand for your jewellery

Question 17

What will happen to the equilibrium price and quantity of new cars if the price of gasoline falls, the price of steel falls, public transportation becomes more expensive and less comfortable, and the wages of auto workers decrease?

Accepted Answer

A) price will fall and the effect on quantity is ambiguous 
B) price will rise and the effect on quantity is ambiguous 
C) quantity will fall and the effect on price is ambiguous 
D) quantity will rise and the effect on price is ambiguous 
A) price will fall and the effect on quantity is ambiguous 
B) price will rise and the effect on quantity is ambiguous 
C) quantity will fall and the effect on price is ambiguous 
D) quantity will rise and the effect on price is ambiguous

Question 18

Figure 4-8  
-Refer to Figure 4-9. Which graph could be used to show the result of 5 percent of the country's smokers deciding to stop smoking?

Accepted Answer

A)  a. 
B)  b. 
C)  c. 
D)  Each graph could be used to show the result. 
A)  a. 
B)  b. 
C)  c. 
D)  Each graph could be used to show the result.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

What is the term for the behaviour of people as they interact with one another in markets?

Accepted Answer

A) economics 
B) interaction 
C) demand and supply 
D) social psychology 
A) economics 
B) interaction 
C) demand and supply 
D) social psychology

Wheat is the main input in the production of flour. If the price of wheat decreases, all else equal, what would we expect?

Wheat is the main input in the production of flour. If the price of wheat increases, all else equal, what would we expect?

If there is an improvement in the technology of producing a product, the supply curve for that product will shift to the left.

What happens in a competitive market?

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Which of the following demonstrates the law of demand?

Suppose that scientists find evidence that proves chocolate pudding lowers cholesterol. What would we expect to see?

Market demand is given as Qd = 60 - P. Market supply is given as Qs = 3P. What would result if the market price were $10?

Figure 4-7 -Refer to Figure 4-7. What does the movement from point B to point A on the graph show?

Market demand is given as Qd = 220 - 4P. Market supply is given as Qs = 2P + 40. What would result if the market price were $10?

What is a demand curve?

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?

Figure 4-6 -Refer to Figure 4-6. What could cause the shift from D₁ to D?

Suppose that demand increases AND supply decreases. What would happen in the market for the good?

Which of the following is NOT a determinant of demand?

Suppose you make jewellery. If the price of gold increases, what would we expect you to do?

What will happen to the equilibrium price and quantity of new cars if the price of gasoline falls, the price of steel falls, public transportation becomes more expensive and less comfortable, and the wages of auto workers decrease?

Figure 4-8 -Refer to Figure 4-9. Which graph could be used to show the result of 5 percent of the country's smokers deciding to stop smoking?

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

What is the term for the behaviour of people as they interact with one another in markets?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

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 Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters

Exam 4: The Market Forces of Supply and Demand

Wheat is the main input in the production of flour. If the price of wheat decreases, all else equal, what would we expect?

Wheat is the main input in the production of flour. If the price of wheat increases, all else equal, what would we expect?

If there is an improvement in the technology of producing a product, the supply curve for that product will shift to the left.

What happens in a competitive market?

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Which of the following demonstrates the law of demand?

Suppose that scientists find evidence that proves chocolate pudding lowers cholesterol. What would we expect to see?

Market demand is given as Qd = 60 - P. Market supply is given as Qs = 3P. What would result if the market price were $10?

Figure 4-7 -Refer to Figure 4-7. What does the movement from point B to point A on the graph show?

Market demand is given as Qd = 220 - 4P. Market supply is given as Qs = 2P + 40. What would result if the market price were $10?

What is a demand curve?

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?

Figure 4-6 -Refer to Figure 4-6. What could cause the shift from D1 to D?

Suppose that demand increases AND supply decreases. What would happen in the market for the good?

Which of the following is NOT a determinant of demand?

Suppose you make jewellery. If the price of gold increases, what would we expect you to do?

What will happen to the equilibrium price and quantity of new cars if the price of gasoline falls, the price of steel falls, public transportation becomes more expensive and less comfortable, and the wages of auto workers decrease?

Figure 4-8 -Refer to Figure 4-9. Which graph could be used to show the result of 5 percent of the country's smokers deciding to stop smoking?

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

What is the term for the behaviour of people as they interact with one another in markets?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

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 Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters

Figure 4-6 -Refer to Figure 4-6. What could cause the shift from D₁ to D?