Question 1

Market demand is given as QD = 100 - 2P.Market supply is given as QS = P + 200.If price increases from $40 to $45,what is the price elasticity of demand?

Accepted Answer

A)  0.2 
B)  0.6 
C)  3.7 
D)  5.7 
A)  0.2 
B)  0.6 
C)  3.7 
D)  5.7

Question 2

Which of the following would NOT affect an individual's demand curve?

Accepted Answer

A)  expectations 
B)  income 
C)  price of related goods 
D)  the number of buyers 
A)  expectations 
B)  income 
C)  price of related goods 
D)  the number of buyers

Question 3

Market demand is given as QD = 75 - P.Market supply is given as QS = 3P + 15.If price increases from $50 to $53,what is the price elasticity of demand?

Accepted Answer

A)  0.1 
B)  0.2 
C)  1.1 
D)  2.2 
A)  0.1 
B)  0.2 
C)  1.1 
D)  2.2

Question 4

In the aftermath of hurricane Odile,parts of the Baja Peninsula have been isolated so that the transportation of gasoline to consumers has become very difficult.Local authorities in various locations have tried various ways to address the situation.
a)Using a supply and demand model,analyze the effect of the hurricane on the market for gasoline.
b)In some places,local authorities have decided to distribute a certain amount of gasoline for free,so that every consumer had the right to a fixed allowance.Show and discuss the effects of this decision on the market.
c)In other places,local authorities have imposed a price cap on gas.Show this in a supply and demand diagram and explain the consequences.

Accepted Answer

a)The supply curve shifts to the left fr

Question 5

For teens,what does a 10 percent increase in the price of cigarettes lead to?

Accepted Answer

A)  a 6 percent drop in teenage smoking 
B)  a 12 percent drop in teenage smoking 
C)  a 18 percent drop in teenage smoking 
D)  a 24 percent drop in teenage smoking 
A)  a 6 percent drop in teenage smoking 
B)  a 12 percent drop in teenage smoking 
C)  a 18 percent drop in teenage smoking 
D)  a 24 percent drop in teenage smoking

Question 6

The market demand is the average of all of the individual demands for a particular good or service.

Accepted Answer

A) True 
 B)False

Question 7

Table 4-1  
-Refer to the Table 4-1.What would the equilibrium price and quantity be?

Accepted Answer

A)  $6 and 30 
B)  $9 and 60 
C)  $12 and 40 
D)  $15 and 20 
A)  $6 and 30 
B)  $9 and 60 
C)  $12 and 40 
D)  $15 and 20

Question 8

Market demand is given as QD = 60 - P.Market supply is given as QS = 3P.If price increases from $5 to $7,what is the price elasticity of demand?

Accepted Answer

A)  0.1 
B)  0.9 
C)  1.1 
D)  2.4 
A)  0.1 
B)  0.9 
C)  1.1 
D)  2.4

Question 9

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 10

Recent pine beetle infestations that are destroying trees in the western provinces are expected to cause the price of lumber to rise in the next six months.As a result,what can we expect to happen to the supply of lumber?

Accepted Answer

A)  It will fall in six months,but not now. 
B)  It will increase in six months when the price goes up. 
C)  It will fall now. 
D)  It will increase now to meet as much demand as possible. 
A)  It will fall in six months,but not now. 
B)  It will increase in six months when the price goes up. 
C)  It will fall now. 
D)  It will increase now to meet as much demand as possible.

Question 11

In a competitive market,why does each seller have limited control over the price of his product?

Accepted Answer

A)  Other sellers are offering similar products. 
B)  In competitive markets,buyers have more influence over price than sellers. 
C)  The products sold in competitive markets are generally in abundant supply. 
D)  Sellers in competitive markets prefer to meet and set a price where profits will be realized. 
A)  Other sellers are offering similar products. 
B)  In competitive markets,buyers have more influence over price than sellers. 
C)  The products sold in competitive markets are generally in abundant supply. 
D)  Sellers in competitive markets prefer to meet and set a price where profits will be realized.

Question 12

What would happen if both supply and demand increase?

Accepted Answer

A)  Equilibrium price would definitely increase. 
B)  Equilibrium price would definitely decrease. 
C)  Equilibrium quantity would definitely decrease. 
D)  Equilibrium quantity would definitely increase. 
A)  Equilibrium price would definitely increase. 
B)  Equilibrium price would definitely decrease. 
C)  Equilibrium quantity would definitely decrease. 
D)  Equilibrium quantity would definitely increase.

Question 13

Market demand is given as QD = 220 - 4P.Market supply is given as QS = 2P + 40.If price increases from $5 to $10,what is the price elasticity of demand?

Accepted Answer

A)  0 
B)  0.2 
C)  0.9 
D)  2.0 
A)  0 
B)  0.2 
C)  0.9 
D)  2.0

Question 14

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

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 15

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

Question 16

What represents the behaviour of buyers?

Accepted Answer

A)  demand 
B)  supply 
C)  a market 
D)  competition 
A)  demand 
B)  supply 
C)  a market 
D)  competition

Question 17

Which of the following is NOT a determinant of demand?

Accepted Answer

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

Question 18

Which of the following reflects the downward-sloping demand curve?

Accepted Answer

A)  Price is positively related to quantity supplied. 
B)  There is an inverse relationship between price and quantity demanded. 
C)  There is a direct relationship between price and quantity demanded. 
D)  When the price falls,buyers willingly buy less. 
A)  Price is positively related to quantity supplied. 
B)  There is an inverse relationship between price and quantity demanded. 
C)  There is a direct relationship between price and quantity demanded. 
D)  When the price falls,buyers willingly buy less.

Question 19

What does the market supply curve show?

Accepted Answer

A)  the total quantity supplied at any price 
B)  the average quantity supplied at any price 
C)  a ratio between price and quantity supplied for the market 
D)  the price sellers will receive from consumers at given quantities 
A)  the total quantity supplied at any price 
B)  the average quantity supplied at any price 
C)  a ratio between price and quantity supplied for the market 
D)  the price sellers will receive from consumers at given quantities

Question 20

What is market demand?

Accepted Answer

A)  It is a vertical summation of individual demand curves. 
B)  It is a horizontal summation of individual demand curves. 
C)  It is not responsive to change in tastes and preferences. 
D)  It is determined solely by the number of buyers and sellers in the market. 
A)  It is a vertical summation of individual demand curves. 
B)  It is a horizontal summation of individual demand curves. 
C)  It is not responsive to change in tastes and preferences. 
D)  It is determined solely by the number of buyers and sellers in the market.

Market demand is given as QD = 100 - 2P.Market supply is given as QS = P + 200.If price increases from $40 to $45,what is the price elasticity of demand?

Which of the following would NOT affect an individual's demand curve?

Market demand is given as QD = 75 - P.Market supply is given as QS = 3P + 15.If price increases from $50 to $53,what is the price elasticity of demand?

For teens,what does a 10 percent increase in the price of cigarettes lead to?

The market demand is the average of all of the individual demands for a particular good or service.

Table 4-1 -Refer to the Table 4-1.What would the equilibrium price and quantity be?

Market demand is given as QD = 60 - P.Market supply is given as QS = 3P.If price increases from $5 to $7,what is the price elasticity of demand?

What happens in a competitive market?

Recent pine beetle infestations that are destroying trees in the western provinces are expected to cause the price of lumber to rise in the next six months.As a result,what can we expect to happen to the supply of lumber?

In a competitive market,why does each seller have limited control over the price of his product?

What would happen if both supply and demand increase?

Market demand is given as QD = 220 - 4P.Market supply is given as QS = 2P + 40.If price increases from $5 to $10,what is the price elasticity of demand?

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

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

What represents the behaviour of buyers?

Which of the following is NOT a determinant of demand?

Which of the following reflects the downward-sloping demand curve?

What does the market supply curve show?

What is market demand?

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

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Exam 4: The Market Forces of Supply and Demand

Market demand is given as QD = 100 - 2P.Market supply is given as QS = P + 200.If price increases from $40 to $45,what is the price elasticity of demand?

Which of the following would NOT affect an individual's demand curve?

Market demand is given as QD = 75 - P.Market supply is given as QS = 3P + 15.If price increases from $50 to $53,what is the price elasticity of demand?

For teens,what does a 10 percent increase in the price of cigarettes lead to?

The market demand is the average of all of the individual demands for a particular good or service.

Table 4-1 -Refer to the Table 4-1.What would the equilibrium price and quantity be?

Market demand is given as QD = 60 - P.Market supply is given as QS = 3P.If price increases from $5 to $7,what is the price elasticity of demand?

What happens in a competitive market?

Recent pine beetle infestations that are destroying trees in the western provinces are expected to cause the price of lumber to rise in the next six months.As a result,what can we expect to happen to the supply of lumber?

In a competitive market,why does each seller have limited control over the price of his product?

What would happen if both supply and demand increase?

Market demand is given as QD = 220 - 4P.Market supply is given as QS = 2P + 40.If price increases from $5 to $10,what is the price elasticity of demand?

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

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

What represents the behaviour of buyers?

Which of the following is NOT a determinant of demand?

Which of the following reflects the downward-sloping demand curve?

What does the market supply curve show?

What is market demand?

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