Question 1

Figure 4-8  
-Refer to the Figure 4-8.The graph shows the demand for cigarettes.Which most likely happened?

Accepted Answer

A)  The price of marijuana rose. 
B)  Mandatory health warnings were placed on cigarette packages. 
C)  Several foreign countries banned Canadian cigarettes in their countries. 
D)  A tax was placed on cigarettes. 
A)  The price of marijuana rose. 
B)  Mandatory health warnings were placed on cigarette packages. 
C)  Several foreign countries banned Canadian cigarettes in their countries. 
D)  A tax was placed on cigarettes.

Question 2

How do the variables price and quantity demanded relate to each other?

Accepted Answer

A)  Price and quantity demanded are independent of each other. 
B)  Price is the dependent variable and quantity demanded is the independent variable. 
C)  Price is the independent variable and quantity demanded is the dependent variable. 
D)  Price and quantity demanded are both dependent variables,since both depend on the actions of buyers and sellers. 
A)  Price and quantity demanded are independent of each other. 
B)  Price is the dependent variable and quantity demanded is the independent variable. 
C)  Price is the independent variable and quantity demanded is the dependent variable. 
D)  Price and quantity demanded are both dependent variables,since both depend on the actions of buyers and sellers.

Question 3

What does a market demand curve reflect?

Accepted Answer

A)  how much all buyers are willing and able to buy at each possible price 
B)  how quantity demanded changes when the number of buyers changes 
C)  the fact that the level of income is inversely related to quantity demanded 
D)  when the buyers are willing to buy the most 
A)  how much all buyers are willing and able to buy at each possible price 
B)  how quantity demanded changes when the number of buyers changes 
C)  the fact that the level of income is inversely related to quantity demanded 
D)  when the buyers are willing to buy the most

Question 4

Figure 4-3
​  
-Refer to the Figure 4-3.If the price in this market is currently $14,what would happen?

Accepted Answer

A)  There would be a shortage of 20 units so producers would increase production. 
B)  There would be a surplus of 20 units and the price would tend to fall. 
C)  There would be a shortage of 40 units so producers would increase production. 
D)  There would be a surplus of 40 units and the price would tend to fall. 
A)  There would be a shortage of 20 units so producers would increase production. 
B)  There would be a surplus of 20 units and the price would tend to fall. 
C)  There would be a shortage of 40 units so producers would increase production. 
D)  There would be a surplus of 40 units and the price would tend to fall.

Question 5

The behaviour of buyers and sellers drives markets toward equilibrium.

Accepted Answer

A) True 
 B)False

Question 6

What happens when there is a shortage in a market?

Accepted Answer

A)  There is downward pressure on price. 
B)  There is upward pressure on price. 
C)  The market is operating above the equilibrium level. 
D)  The price must be above equilibrium. 
A)  There is downward pressure on price. 
B)  There is upward pressure on price. 
C)  The market is operating above the equilibrium level. 
D)  The price must be above equilibrium.

Question 7

Figure 4-7  
-Refer to the 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 complement good 
D)  an increase in income 
A)  an increase in price 
B)  a decrease in price 
C)  a decrease in the price of a complement good 
D)  an increase in income

Question 8

Figure 4-1  
-Refer to the Figure 4-1.What could cause the movement from S to S1?

Accepted Answer

A)  a decrease in the price of the good 
B)  an improvement in technology 
C)  an increase in income 
D)  an increase in input prices 
A)  a decrease in the price of the good 
B)  an improvement in technology 
C)  an increase in income 
D)  an increase in input prices

Question 9

Nancy likes pasta today more than she did yesterday.What does this reveal about Nancy's circumstances?

Accepted Answer

A)  Nancy must now perceive pasta as a luxury. 
B)  Nancy must have received an increase in income. 
C)  Nancy must be now willing to pay more than before for pasta. 
D)  Nancy must now perceive pasta as a normal good. 
A)  Nancy must now perceive pasta as a luxury. 
B)  Nancy must have received an increase in income. 
C)  Nancy must be now willing to pay more than before for pasta. 
D)  Nancy must now perceive pasta as a normal good.

Question 10

Holding the other 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 11

If a seller in a competitive market chooses to charge more than the market price,what would happen?

Accepted Answer

A)  Buyers would tend to buy more from this seller. 
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 prices. 
D)  Buyers will tend to make purchases from other sellers. 
A)  Buyers would tend to buy more from this seller. 
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 prices. 
D)  Buyers will tend to make purchases from other sellers.

Question 12

What does fewer sellers in the market cause?

Accepted Answer

A)  the supply curve to shift to the left 
B)  the supply curve to shift to the right 
C)  a movement up a stationary supply curve 
D)  a movement down a stationary supply curve 
A)  the supply curve to shift to the left 
B)  the supply curve to shift to the right 
C)  a movement up a stationary supply curve 
D)  a movement down a stationary supply curve

Question 13

Figure 4-6  
-Refer to the Figure 4-6.What happens if the demand curve shifts from D1 to D?

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.

Question 14

Market demand is given as Qd = 300 - 2P.Market supply is given as Qs = 2P + 100.What would result if the market price were $15?

Accepted Answer

A)  a shortage of 25 
B)  a surplus of 25 
C)  a surplus of 140 
D)  a shortage of 140 
A)  a shortage of 25 
B)  a surplus of 25 
C)  a surplus of 140 
D)  a shortage of 140

Question 15

Figure 4-10  
-Refer to the Figure 4-10.What is the movement from point A to point B on the graph called?

Accepted Answer

A)  a decrease in supply 
B)  an increase in supply 
C)  an increase in the quantity supplied 
D)  a decrease in the quantity supplied 
A)  a decrease in supply 
B)  an increase in supply 
C)  an increase in the quantity supplied 
D)  a decrease in the quantity supplied

Question 16

Market demand is given as QD = 300- 3P.Market supply is given as QS = 2P + 100.If price increases from $50 to $60,what is the price elasticity of demand?

Accepted Answer

A)  0.6 
B)  0.8 
C)  1.2 
D)  2.1 
A)  0.6 
B)  0.8 
C)  1.2 
D)  2.1

Question 17

Market demand is given as QD = 250 - 0.5P.Market supply is given as QS = 2P.If price increases from $48 to $52,what is the price elasticity of demand?

Accepted Answer

A)  0 
B)  0.1 
C)  3.2 
D)  11.0 
A)  0 
B)  0.1 
C)  3.2 
D)  11.0

Question 18

Sugar is a normal good.You observe that both the equilibrium price and quantity of sugar have risen over time.Which of the following would be most consistent with this observation?

Accepted Answer

A)  Consumers have experienced an increase in income and sugar-production technology has improved. 
B)  The price of artificial sweetener has risen and the price of coffee has fallen. 
C)  Consumer tastes have changed so as to prefer sugar less than before. 
D)  The demand curve for sugar must be positively sloped. 
A)  Consumers have experienced an increase in income and sugar-production technology has improved. 
B)  The price of artificial sweetener has risen and the price of coffee has fallen. 
C)  Consumer tastes have changed so as to prefer sugar less than before. 
D)  The demand curve for sugar must be positively sloped.

Question 19

Market demand is given as QD = 40 - 2P.Market supply is given as QS = 2P.If price increases from $15 to $16,what is the price elasticity of demand?

Accepted Answer

A)  0.3 
B)  1.0 
C)  1.1 
D)  3.4 
A)  0.3 
B)  1.0 
C)  1.1 
D)  3.4

Question 20

Figure 4-3
​  
-Refer to the Figure 4-3.If price in this market is currently $8,what would happen?

Accepted Answer

A)  Quantity supplied would be 40 and quantity demanded would be 60. 
B)  Quantity supplied would be 60 and quantity demanded would be 40. 
C)  Quantity supplied would be 50 and quantity demanded would be 50. 
D)  Quantity supplied would be 70 and quantity demanded would be 30. 
A)  Quantity supplied would be 40 and quantity demanded would be 60. 
B)  Quantity supplied would be 60 and quantity demanded would be 40. 
C)  Quantity supplied would be 50 and quantity demanded would be 50. 
D)  Quantity supplied would be 70 and quantity demanded would be 30.

Figure 4-8 -Refer to the Figure 4-8.The graph shows the demand for cigarettes.Which most likely happened?

How do the variables price and quantity demanded relate to each other?

What does a market demand curve reflect?

Figure 4-3 -Refer to the Figure 4-3.If the price in this market is currently $14,what would happen?

The behaviour of buyers and sellers drives markets toward equilibrium.

What happens when there is a shortage in a market?

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

Figure 4-1 -Refer to the Figure 4-1.What could cause the movement from S to S1?

Nancy likes pasta today more than she did yesterday.What does this reveal about Nancy's circumstances?

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

If a seller in a competitive market chooses to charge more than the market price,what would happen?

What does fewer sellers in the market cause?

Figure 4-6 -Refer to the Figure 4-6.What happens if the demand curve shifts from D1 to D?

Market demand is given as Qd = 300 - 2P.Market supply is given as Qs = 2P + 100.What would result if the market price were $15?

Figure 4-10 -Refer to the Figure 4-10.What is the movement from point A to point B on the graph called?

Market demand is given as QD = 300- 3P.Market supply is given as QS = 2P + 100.If price increases from $50 to $60,what is the price elasticity of demand?

Market demand is given as QD = 250 - 0.5P.Market supply is given as QS = 2P.If price increases from $48 to $52,what is the price elasticity of demand?

Sugar is a normal good.You observe that both the equilibrium price and quantity of sugar have risen over time.Which of the following would be most consistent with this observation?

Market demand is given as QD = 40 - 2P.Market supply is given as QS = 2P.If price increases from $15 to $16,what is the price elasticity of demand?

Figure 4-3 -Refer to the Figure 4-3.If price in this market is currently $8,what would happen?

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 Small 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 4-8 -Refer to the Figure 4-8.The graph shows the demand for cigarettes.Which most likely happened?

How do the variables price and quantity demanded relate to each other?

What does a market demand curve reflect?

Figure 4-3 ​ -Refer to the Figure 4-3.If the price in this market is currently $14,what would happen?

The behaviour of buyers and sellers drives markets toward equilibrium.

What happens when there is a shortage in a market?

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

Figure 4-1 -Refer to the Figure 4-1.What could cause the movement from S to S1?

Nancy likes pasta today more than she did yesterday.What does this reveal about Nancy's circumstances?

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

If a seller in a competitive market chooses to charge more than the market price,what would happen?

What does fewer sellers in the market cause?

Figure 4-6 -Refer to the Figure 4-6.What happens if the demand curve shifts from D1 to D?

Market demand is given as Qd = 300 - 2P.Market supply is given as Qs = 2P + 100.What would result if the market price were $15?

Figure 4-10 -Refer to the Figure 4-10.What is the movement from point A to point B on the graph called?

Market demand is given as QD = 300- 3P.Market supply is given as QS = 2P + 100.If price increases from $50 to $60,what is the price elasticity of demand?

Market demand is given as QD = 250 - 0.5P.Market supply is given as QS = 2P.If price increases from $48 to $52,what is the price elasticity of demand?

Sugar is a normal good.You observe that both the equilibrium price and quantity of sugar have risen over time.Which of the following would be most consistent with this observation?

Market demand is given as QD = 40 - 2P.Market supply is given as QS = 2P.If price increases from $15 to $16,what is the price elasticity of demand?

Figure 4-3 ​ -Refer to the Figure 4-3.If price in this market is currently $8,what would happen?

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 Small 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 4-3 -Refer to the Figure 4-3.If the price in this market is currently $14,what would happen?

Figure 4-3 -Refer to the Figure 4-3.If price in this market is currently $8,what would happen?