Question 1

Holding all else constant, a higher price for ski lift tickets would be expected to:

Accepted Answer

A)  increase the number of skiers 
B)  decrease ski sales 
C)  decrease the demand for other winter recreational activities 
D)  decrease the supply of ski resorts 
A)  increase the number of skiers 
B)  decrease ski sales 
C)  decrease the demand for other winter recreational activities 
D)  decrease the supply of ski resorts

Question 2

Suppose that a decrease in the price of X results in less of good Y sold. This would mean that X and Y are:

Accepted Answer

A)  complementary goods 
B)  substitute goods 
C)  unrelated goods 
D)  normal goods 
A)  complementary goods 
B)  substitute goods 
C)  unrelated goods 
D)  normal goods

Question 3

If the number of buyers of DVD movies increases, other things being equal, there will be an increase in the equilibrium price of DVD movies and a decrease in the equilibrium quantity sold.

Accepted Answer

A) True 
 B)False

Question 4

If a seller in a competitive market chooses to charge more than the market price, then:

Accepted Answer

A)  buyers will tend to make their purchases elsewhere 
B)  the owners of the raw materials used in production would raise the prices for the raw materials 
C)  other sellers would also raise their price 
D)  buyers would tend to buy more from this seller 
A)  buyers will tend to make their purchases elsewhere 
B)  the owners of the raw materials used in production would raise the prices for the raw materials 
C)  other sellers would also raise their price 
D)  buyers would tend to buy more from this seller

Question 5

The news that oat bran helped reduce serum cholesterol, caused people to prefer to eat more oatmeal. This change in preference would be expected to cause the demand curve for oats to shift to the right, and equilibrium price and quantity of oats to increase. What effects might be felt in other markets?

Accepted Answer

If the price of oats rises, demand for t

Question 6

The stock market is a monopoly.

Accepted Answer

A) True 
 B)False

Question 7

Why do we use the demand-and-supply graphs to explain human behaviours regarding production and consumption?

Accepted Answer

The graphs portray what occurs when inpu

Question 8

For each of the following situations in the wheat market, determine whether the quantity demanded changes, or the demand curve shifts and determine the direction of the change.
a. consumer income increases
b. the price of wheat increases
c. scientists determine that eating wheat causes high blood pressure
d. the price of oats increases
e. in June, insects destroy part of the country's wheat crop

Accepted Answer

a. An increase in consumer income will c

Question 9

If good Z is 'inferior', then an increase in income will cause:

Accepted Answer

A)  demand for good Z will increase 
B)  market price of good Z will increase 
C)  demand for good Z will decrease 
D)  demand for good Z will not change 
A)  demand for good Z will increase 
B)  market price of good Z will increase 
C)  demand for good Z will decrease 
D)  demand for good Z will not change

Question 10

The ultimate source of demand for a product is?

Accepted Answer

A)  advertisers 
B)  those people who purchase the product 
C)  those firms that produce the product 
D)  the value of the labour used to produce the product 
A)  advertisers 
B)  those people who purchase the product 
C)  those firms that produce the product 
D)  the value of the labour used to produce the product

Question 11

The price where quantity supplied equals quantity demanded is called:

Accepted Answer

A)  the equilibrium price 
B)  the monopoly price 
C)  the coordinating price 
D)  all of the above 
A)  the equilibrium price 
B)  the monopoly price 
C)  the coordinating price 
D)  all of the above

Question 12

At the equilibrium price:

Accepted Answer

A)  there can still be upward or downward pressure on price 
B)  there will be no pressure on price to rise or fall 
C)  sellers will eventually require a higher price 
D)  buyers will not be willing to purchase the output sellers desire to sell 
A)  there can still be upward or downward pressure on price 
B)  there will be no pressure on price to rise or fall 
C)  sellers will eventually require a higher price 
D)  buyers will not be willing to purchase the output sellers desire to sell

Question 13

Graph 4-2
  
-Refer to Graph 4-2. On the graph, the movement from D to D1 could be caused by:

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

The behaviour of firms to different market conditions is known as:

Accepted Answer

A)  supply 
B)  demand 
C)  incomes 
D)  taxation 
A)  supply 
B)  demand 
C)  incomes 
D)  taxation

Question 15

Given the following table, graph the demand and supply curves for flashlights. Be sure to label equilibrium price and equilibrium quantity.

Accepted Answer

The answer of Given the following table, graph the demand...

Question 16

If the price of tea increases, there is likely to be a rightward shift in the demand for coffee.

Accepted Answer

A) True 
 B)False

Question 17

A shift in the supply curve is called:

Accepted Answer

A)  a 'change in supply' 
B)  a 'movement along the supply curve' 
C)  a 'change in the quantity supplied' 
D)  all of the above 
A)  a 'change in supply' 
B)  a 'movement along the supply curve' 
C)  a 'change in the quantity supplied' 
D)  all of the above

Question 18

Which of the following is a determinant of demand?

Accepted Answer

A)  the price of a substitute good 
B)  the price of a complement good 
C)  the price of the good next month 
D)  all of the above 
A)  the price of a substitute good 
B)  the price of a complement good 
C)  the price of the good next month 
D)  all of the above

Question 19

Graph 4-3
  
-Refer to Graph 4-3. Suppose we observe the movement from point B to point A on the graph. This would be caused by:

Accepted Answer

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

Question 20

The relationship between price and quantity supplied is:

Accepted Answer

A)  positive or direct 
B)  negative or inverse 
C)  non-existent 
D)  the same as the relationship between price and quantity demanded 
A)  positive or direct 
B)  negative or inverse 
C)  non-existent 
D)  the same as the relationship between price and quantity demanded

Exam 4: The Market Forces of Supply and Demand

Holding all else constant, a higher price for ski lift tickets would be expected to:

Suppose that a decrease in the price of X results in less of good Y sold. This would mean that X and Y are:

If the number of buyers of DVD movies increases, other things being equal, there will be an increase in the equilibrium price of DVD movies and a decrease in the equilibrium quantity sold.

If a seller in a competitive market chooses to charge more than the market price, then:

The stock market is a monopoly.

Why do we use the demand-and-supply graphs to explain human behaviours regarding production and consumption?

If good Z is 'inferior', then an increase in income will cause:

The ultimate source of demand for a product is?

The price where quantity supplied equals quantity demanded is called:

At the equilibrium price:

Graph 4-2 -Refer to Graph 4-2. On the graph, the movement from D to D1 could be caused by:

The behaviour of firms to different market conditions is known as:

Given the following table, graph the demand and supply curves for flashlights. Be sure to label equilibrium price and equilibrium quantity.

If the price of tea increases, there is likely to be a rightward shift in the demand for coffee.

A shift in the supply curve is called:

Which of the following is a determinant of demand?

Graph 4-3 -Refer to Graph 4-3. Suppose we observe the movement from point B to point A on the graph. This would be caused by:

The relationship between price and quantity supplied is:

Ten Lessons From 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

Business Strategy

Competition Policy

Monopolistic Competition

The Markets for the Factors of Production

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

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 Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters

Graph 4-2 -Refer to Graph 4-2. On the graph, the movement from D to D₁ could be caused by: