Question 1

A higher price for batteries would tend to:

Accepted Answer

A)  increase the demand for flashlights 
B)  decrease the demand for electricity 
C)  increase the demand for electricity 
D)  increase the demand for batteries 
A)  increase the demand for flashlights 
B)  decrease the demand for electricity 
C)  increase the demand for electricity 
D)  increase the demand for batteries

Question 2

Given the following demand schedule, graph Lee's weekly demand curve for Coffee.

Accepted Answer

The answer of Given the following demand schedule, graph Lee's...

Question 3

Supply and demand determine prices and prices allocate the economy's scarce resources.

Accepted Answer

A) True 
 B)False

Question 4

Other things being equal, explain the effect each of the following situations will have on either the demand or supply of corn. Explain also what the effect will be on equilibrium price and quantity.
a. corn is now considered by doctors to be the most healthy vegetable
b. there is a decline in the amount of land used to grow corn
c. producers expect the price of corn to fall in the future
d. the price of peas, a substitute for corn, goes up
e. corn is a normal good and incomes fall
f. the price of fertiliser rises

Accepted Answer

1. demand increases; equilibrium price i

Question 5

Graph 4-2
  
-Refer to Graph 4-2. If the demand curve shifts from D1 to D on the graph, this means that:

Accepted Answer

A)  firms are 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 are 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

Question 6

Analysing how an event affects a market can be accomplished in two steps.

Accepted Answer

A) True 
 B)False

Question 7

Whenever the price of a good changes there:

Accepted Answer

A)  is a change in supply and demand 
B)  is only a change in supply 
C)  will be a movement along a supply curve and/or demand curve 
D)  will be no effect in the market 
A)  is a change in supply and demand 
B)  is only a change in supply 
C)  will be a movement along a supply curve and/or demand curve 
D)  will be no effect in the market

Question 8

A reduction in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Accepted Answer

A) True 
 B)False

Question 9

Why is the ceteris paribus assumption so important when constructing a demand or supply curve?

Accepted Answer

Ceteris paribus means 'other things equa

Question 10

The computer software industry is an example of a perfectly competitive industry.

Accepted Answer

A) True 
 B)False

Question 11

Suppose you make jewellery. If the price of gold falls, we would expect you to:

Accepted Answer

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

Question 12

Which of the following statements is incorrect?

Accepted Answer

A)  if demand increases and supply decreases, equilibrium price will rise 
B)  if supply increases and demand decreases, equilibrium price will fall 
C)  if supply declines and demand remains constant, equilibrium price will rise 
D)  if demand decreases and supply increases, equilibrium price will rise 
A)  if demand increases and supply decreases, equilibrium price will rise 
B)  if supply increases and demand decreases, equilibrium price will fall 
C)  if supply declines and demand remains constant, equilibrium price will rise 
D)  if demand decreases and supply increases, equilibrium price will rise

Question 13

A market where there is only one seller is called a:

Accepted Answer

A)  monopoly market 
B)  competitive market 
C)  regulated market 
D)  wheat market 
A)  monopoly market 
B)  competitive market 
C)  regulated market 
D)  wheat market

Question 14

Graph 4-6
  
-Refer to the Graph 4-6. If the price were $25:

Accepted Answer

A)  there would be a surplus of 300 
B)  there would be a surplus of 200 
C)  there would be a shortage of 200 
D)  the market would be in equilibrium 
A)  there would be a surplus of 300 
B)  there would be a surplus of 200 
C)  there would be a shortage of 200 
D)  the market would be in equilibrium

Question 15

All else being constant, an increase in the number of cattle delivered to an auction to be marketed would:

Accepted Answer

A)  represent an increase in demand for cattle at the auction 
B)  represent an increase in the supply of cattle at the auction 
C)  represent a decrease in the number of sellers at the auction 
D)  have no effect on the demand or supply at the auction 
A)  represent an increase in demand for cattle at the auction 
B)  represent an increase in the supply of cattle at the auction 
C)  represent a decrease in the number of sellers at the auction 
D)  have no effect on the demand or supply at the auction

Question 16

What will happen to supply or quantity supplied under each of the following situations?
a. the price of the product falls
b. technology improves
c. input prices rise
d. expectations change - you expect the price of your product to rise next month

Accepted Answer

a. A change in price will cause a moveme

Question 17

Firms that sell their products in a competitive market have limited pricing power because:

Accepted Answer

A)  sellers have reason to charge more than their competitors 
B)  each buyer has a significant influence on the price of the product 
C)  other sellers are offering very similar products 
D)  none of the above are correct 
A)  sellers have reason to charge more than their competitors 
B)  each buyer has a significant influence on the price of the product 
C)  other sellers are offering very similar products 
D)  none of the above are correct

Question 18

In a market economy, prices determine who produces each good and how much is produced.

Accepted Answer

A) True 
 B)False

Question 19

A market is a group of buyers and sellers of a particular product.

Accepted Answer

A) True 
 B)False

Question 20

New Zealand exports possum skins that are used to make leather products. What determinants of demand would be influenced by the following events?
a. New Zealand's possum skin industry is recognised as having conservation benefits as possums are a feral pest in New Zealand.
b. incomes in China grow rapidly
c. the price of calf leather becomes more expensive

Accepted Answer

a. This may influence people's tastes. I

Exam 4: The Market Forces of Supply and Demand

A higher price for batteries would tend to:

Given the following demand schedule, graph Lee's weekly demand curve for Coffee.

Supply and demand determine prices and prices allocate the economy's scarce resources.

Graph 4-2 -Refer to Graph 4-2. If the demand curve shifts from D1 to D on the graph, this means that:

Analysing how an event affects a market can be accomplished in two steps.

Whenever the price of a good changes there:

A reduction in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Why is the ceteris paribus assumption so important when constructing a demand or supply curve?

The computer software industry is an example of a perfectly competitive industry.

Suppose you make jewellery. If the price of gold falls, we would expect you to:

Which of the following statements is incorrect?

A market where there is only one seller is called a:

Graph 4-6 -Refer to the Graph 4-6. If the price were $25:

All else being constant, an increase in the number of cattle delivered to an auction to be marketed would:

What will happen to supply or quantity supplied under each of the following situations? a. the price of the product falls b. technology improves c. input prices rise d. expectations change - you expect the price of your product to rise next month

Firms that sell their products in a competitive market have limited pricing power because:

In a market economy, prices determine who produces each good and how much is produced.

A market is a group of buyers and sellers of a particular product.

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. If the demand curve shifts from D₁ to D on the graph, this means that: