Question 1

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

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 2

Alyssa rents 5 movies per month when the price is $3.00 each and 7 movies per month when the price is $2.50. What has Alyssa demonstrated?

Accepted Answer

A) law of price 
B) law of supply 
C) actions of an irrational consumer 
D) law of demand 
A) law of price 
B) law of supply 
C) actions of an irrational consumer 
D) law of demand

Question 3

For market economies, which would NOT be correct?

Accepted Answer

A) Prices guide economic decisions and thereby allocate scarce resources. 
B) Prices ensure that quantity supplied and quantity demanded are in balance. 
C) Prices ensure that anyone who wants a product can get it. 
D) Prices influence how much of a good buyers choose to purchase and how much sellers choose to produce. 
A) Prices guide economic decisions and thereby allocate scarce resources. 
B) Prices ensure that quantity supplied and quantity demanded are in balance. 
C) Prices ensure that anyone who wants a product can get it. 
D) Prices influence how much of a good buyers choose to purchase and how much sellers choose to produce.

Question 4

What would happen when supply and demand both increase?

Accepted Answer

A) equilibrium price will increase 
B) equilibrium price will decrease 
C) equilibrium quantity may increase, decrease, or remain unchanged 
D) equilibrium price may increase, decrease, or remain unchanged 
A) equilibrium price will increase 
B) equilibrium price will decrease 
C) equilibrium quantity may increase, decrease, or remain unchanged 
D) equilibrium price may increase, decrease, or remain unchanged

Question 5

Which of the following are the words most commonly used by economists?

Accepted Answer

A) surplus and shortage 
B) scarcity and human wants 
C) supply and demand 
D) price and quantity 
A) surplus and shortage 
B) scarcity and human wants 
C) supply and demand 
D) price and quantity

Question 6

Funsters Inc., the largest toy company in Canada, sells its most popular doll for $35. It has just learned that its leading competitor Toysorama is mass producing an excellent copy and plans to flood the market with their $10 doll in 6 weeks. What should Funsters do?

Accepted Answer

A) increase the supply of their doll now before the other doll hits the market 
B) fight fire with fire and decrease supply for 6 weeks, then increase the supply of its doll too 
C) continue business as usual, since consumers will not buy the cheaper imitation 
D) discontinue this doll 
A) increase the supply of their doll now before the other doll hits the market 
B) fight fire with fire and decrease supply for 6 weeks, then increase the supply of its doll too 
C) continue business as usual, since consumers will not buy the cheaper imitation 
D) discontinue this doll

Question 7

What might cause a movement along the supply curve?

Accepted Answer

A) a change in technology 
B) a change in input prices 
C) a change in expectations about future prices 
D) a change in the price of the good or service 
A) a change in technology 
B) a change in input prices 
C) a change in expectations about future prices 
D) a change in the price of the good or service

Question 8

Market demand is given as Qd = 140 - 5P. Market supply is given as Qs = 2P. What would result if the market price were $25?

Accepted Answer

A) a shortage of 35 
B) a surplus of 35 
C) a surplus of 70 
D) a shortage of 70 
A) a shortage of 35 
B) a surplus of 35 
C) a surplus of 70 
D) a shortage of 70

Question 9

For each good produced in a market economy, what do demand and supply determine?

Accepted Answer

A) the price of the good, but not the quantity 
B) the quantity of the good, but not the price 
C) both price and quantity 
D) neither price nor quantity is determined by demand and supply, because prices are ultimately set by producers 
A) the price of the good, but not the quantity 
B) the quantity of the good, but not the price 
C) both price and quantity 
D) neither price nor quantity is determined by demand and supply, because prices are ultimately set by producers

Question 10

Lead is an important input in the production of crystal. If the price of lead decreases, all else equal, what would we expect?

Accepted Answer

A) the supply of crystal to be unaffected 
B) the supply of crystal to decrease 
C) the supply of crystal to increase 
D) the supply of lead to increase 
A) the supply of crystal to be unaffected 
B) the supply of crystal to decrease 
C) the supply of crystal to increase 
D) the supply of lead to increase

Question 11

Figure 4-4  
-Refer to Figure 4-4. If the price is $15, what would the quantity supplied be?

Accepted Answer

A) 200 
B) 400 
C) 500 
D) 700 
A) 200 
B) 400 
C) 500 
D) 700

Question 12

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

Accepted Answer

A) an increase in price 
B) a decrease in price 
C) a decrease in the price of a substitute good 
D) an increase in income 
A) an increase in price 
B) a decrease in price 
C) a decrease in the price of a substitute good 
D) an increase in income

Question 13

In a perfectly competitive market, buyers and sellers are price setters.

Accepted Answer

A) True 
 B)False

Question 14

If a car manufacturer purchases new labour-saving technology for its assembly line, what would we NOT expect?

Accepted Answer

A) less labour to be used 
B) the supply of cars produced to increase 
C) costs to the firm to fall 
D) the price of cars to be increased by the firm 
A) less labour to be used 
B) the supply of cars produced to increase 
C) costs to the firm to fall 
D) the price of cars to be increased by the firm

Question 15

Whenever a determinant of demand other than price changes, the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 16

You have decided to purchase a new Mustang convertible. A friend tells you that Ford will stop offering a $3000 rebate on Mustangs starting next month. As a result of this information, what will happen to your demand curve for Mustangs?

Accepted Answer

A) could shift either right or left 
B) shifts right today 
C) curve will be unaffected 
D) shifts left today 
A) could shift either right or left 
B) shifts right today 
C) curve will be unaffected 
D) shifts left today

Question 17

Price, which is determined by all buyers and sellers as they interact in the marketplace, allocates the economy's scarce resources.

Accepted Answer

A. A change in supply refers to a shift

Question 18

Which of the following would be an example of a monopoly?

Accepted Answer

A) a bakery in a large city 
B) local cement companies 
C) a local cable television company 
D) a potato farmer 
A) a bakery in a large city 
B) local cement companies 
C) a local cable television company 
D) a potato farmer

Question 19

Holding the non-price determinants of supply constant, what would a change in price do?

Accepted Answer

A) result in a change in supply 
B) have no effect on the quantity supplied 
C) result in a shift of demand 
D) result in a movement along a stable supply curve 
A) result in a change in supply 
B) have no effect on the quantity supplied 
C) result in a shift of demand 
D) result in a movement along a stable supply curve

Question 20

Figure 4-6  
-Refer to Figure 4-6. If the demand curve shifts from D1 to D, what do we know?

Accepted Answer

A) Firms would be willing to supply less than before. 
B) People are less willing to buy the product at any price than before. 
C) People are now more willing to buy the product at any price than before. 
D) The price of the product has decreased, causing consumers to buy more of the product. 
A) Firms would be willing to supply less than before. 
B) People are less willing to buy the product at any price than before. 
C) People are now more willing to buy the product at any price than before. 
D) The price of the product has decreased, causing consumers to buy more of the product.

Figure 4-6 -Refer to Figure 4-6. What could cause the shift from D to D_1?

Alyssa rents 5 movies per month when the price is $3.00 each and 7 movies per month when the price is $2.50. What has Alyssa demonstrated?

For market economies, which would NOT be correct?

What would happen when supply and demand both increase?

Which of the following are the words most commonly used by economists?

Funsters Inc., the largest toy company in Canada, sells its most popular doll for $35. It has just learned that its leading competitor Toysorama is mass producing an excellent copy and plans to flood the market with their $10 doll in 6 weeks. What should Funsters do?

What might cause a movement along the supply curve?

Market demand is given as Qd = 140 - 5P. Market supply is given as Qs = 2P. What would result if the market price were $25?

For each good produced in a market economy, what do demand and supply determine?

Lead is an important input in the production of crystal. If the price of lead decreases, all else equal, what would we expect?

Figure 4-4 -Refer to Figure 4-4. If the price is $15, what would the quantity supplied be?

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

In a perfectly competitive market, buyers and sellers are price setters.

If a car manufacturer purchases new labour-saving technology for its assembly line, what would we NOT expect?

Whenever a determinant of demand other than price changes, the demand curve shifts.

You have decided to purchase a new Mustang convertible. A friend tells you that Ford will stop offering a $3000 rebate on Mustangs starting next month. As a result of this information, what will happen to your demand curve for Mustangs?

Price, which is determined by all buyers and sellers as they interact in the marketplace, allocates the economy's scarce resources.

Which of the following would be an example of a monopoly?

Holding the non-price determinants of supply constant, what would a change in price do?

Figure 4-6 -Refer to Figure 4-6. If the demand curve shifts from D₁ to D, what do we know?

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

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

Alyssa rents 5 movies per month when the price is $3.00 each and 7 movies per month when the price is $2.50. What has Alyssa demonstrated?

For market economies, which would NOT be correct?

What would happen when supply and demand both increase?

Which of the following are the words most commonly used by economists?

Funsters Inc., the largest toy company in Canada, sells its most popular doll for $35. It has just learned that its leading competitor Toysorama is mass producing an excellent copy and plans to flood the market with their $10 doll in 6 weeks. What should Funsters do?

What might cause a movement along the supply curve?

Market demand is given as Qd = 140 - 5P. Market supply is given as Qs = 2P. What would result if the market price were $25?

For each good produced in a market economy, what do demand and supply determine?

Lead is an important input in the production of crystal. If the price of lead decreases, all else equal, what would we expect?

Figure 4-4 -Refer to Figure 4-4. If the price is $15, what would the quantity supplied be?

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

In a perfectly competitive market, buyers and sellers are price setters.

If a car manufacturer purchases new labour-saving technology for its assembly line, what would we NOT expect?

Whenever a determinant of demand other than price changes, the demand curve shifts.

You have decided to purchase a new Mustang convertible. A friend tells you that Ford will stop offering a $3000 rebate on Mustangs starting next month. As a result of this information, what will happen to your demand curve for Mustangs?

Price, which is determined by all buyers and sellers as they interact in the marketplace, allocates the economy's scarce resources.

Which of the following would be an example of a monopoly?

Holding the non-price determinants of supply constant, what would a change in price do?

Figure 4-6 -Refer to Figure 4-6. If the demand curve shifts from D1 to D, what do we know?

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 D to D_1?

Figure 4-6 -Refer to Figure 4-6. If the demand curve shifts from D₁ to D, what do we know?