Question 1

Market demand is given as QD = 200 - 3P.Market supply is given as QS = P + 10.If price increases from $35 to $40,what is the price elasticity of demand?

Accepted Answer

A)  0.3 
B)  1.3 
C)  3.0 
D)  4.4 
A)  0.3 
B)  1.3 
C)  3.0 
D)  4.4

Question 2

Market demand is given as Qd = 95 - P.Market supply is given as Qs = 3P + 15.In a perfectly competitive equilibrium,what will be the quantity?

Accepted Answer

A)  20 
B)  60 
C)  75 
D)  80 
A)  20 
B)  60 
C)  75 
D)  80

Question 3

Market demand is given as QD = 40 - 2P.Market supply is given as QS = 2P.If price increases from $4 to $7,what is the price elasticity of demand?

Accepted Answer

A)  0.1 
B)  0.4 
C)  1.6 
D)  4.7 
A)  0.1 
B)  0.4 
C)  1.6 
D)  4.7

Question 4

What happens if there is a shortage of a good at the current price?

Accepted Answer

A)  Sellers are producing more than buyers wish to buy. 
B)  The market must be in equilibrium. 
C)  The price is below the equilibrium price. 
D)  Quantity demanded equals quantity supplied. 
A)  Sellers are producing more than buyers wish to buy. 
B)  The market must be in equilibrium. 
C)  The price is below the equilibrium price. 
D)  Quantity demanded equals quantity supplied.

Question 5

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $8 to $11,what is the price elasticity of demand?

Accepted Answer

A)  0.2 
B)  0.9 
C)  1.1 
D)  1.2 
A)  0.2 
B)  0.9 
C)  1.1 
D)  1.2

Question 6

Anyone willing to pay the market price for a resource may have it.

Accepted Answer

A) True 
 B)False

Question 7

What is the price where quantity supplied equals quantity demanded?

Accepted Answer

A)  coordinating price 
B)  cooperative price 
C)  equilibrium price 
D)  balancing price 
A)  coordinating price 
B)  cooperative price 
C)  equilibrium price 
D)  balancing price

Question 8

If there is an improvement in the technology of producing a product,the supply curve for that product will shift to the left.

Accepted Answer

A) True 
 B)False

Question 9

Figure 4-2  
-Refer to the Figure 4-2.What are the equilibrium price and quantity?

Accepted Answer

A)  $35 and 200 
B)  $15 and 600 
C)  $25 and 400 
D)  $15 and 200 
A)  $35 and 200 
B)  $15 and 600 
C)  $25 and 400 
D)  $15 and 200

Question 10

Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also an increase in input prices.What would we expect to occur in this market?

Accepted Answer

A)  The equilibrium price would increase,but the impact on the amount sold in the market would be ambiguous. 
B)  The equilibrium price would decrease,but the impact on the amount sold in the market would be ambiguous. 
C)  Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous. 
A)  The equilibrium price would increase,but the impact on the amount sold in the market would be ambiguous. 
B)  The equilibrium price would decrease,but the impact on the amount sold in the market would be ambiguous. 
C)  Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous.

Question 11

When an increase in the price of one good lowers the demand for another good,the two goods are called complements.

Accepted Answer

A) True 
 B)False

Question 12

In what type of market do we refer to buyers and sellers as "price takers"?

Accepted Answer

A)  a perfectly competitive market 
B)  a monopolistically competitive market 
C)  an oligopolistic market 
D)  a monopolistic market 
A)  a perfectly competitive market 
B)  a monopolistically competitive market 
C)  an oligopolistic market 
D)  a monopolistic market

Question 13

What is one reason that government taxes on cigarettes reduce smoking?

Accepted Answer

A)  Cigarette companies are successful in passing much of the tax on to consumers. 
B)  Cigarette companies do not pass much of the tax on to consumers. 
C)  There are many good substitutes for cigarettes. 
D)  Higher prices suggest less harmful cigarettes. 
A)  Cigarette companies are successful in passing much of the tax on to consumers. 
B)  Cigarette companies do not pass much of the tax on to consumers. 
C)  There are many good substitutes for cigarettes. 
D)  Higher prices suggest less harmful cigarettes.

Question 14

Suppose you make jewellery.If the price of silver increases,what would we expect you to do?

Accepted Answer

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

Question 15

Suppose that health officials have argued that eating too much sugar might be harmful to human health.As a result,there has been a significant decrease in the amount of sugar produced.Which of the following best explains the decrease in production?

Accepted Answer

A)  Sugar producers,concerned about the health of their customers,decided to produce relatively less sugar. 
B)  Government officials,concerned about consumer health,ordered sugar producers to produce relatively less sugar. 
C)  Individual consumers,concerned about their own health,decreased their demand for sugar,which lowered the relative price of sugar,making it less attractive to produce. 
D)  Anti-sugar protesters have made it difficult for both buyers and sellers of sugar to meet in the marketplace. 
A)  Sugar producers,concerned about the health of their customers,decided to produce relatively less sugar. 
B)  Government officials,concerned about consumer health,ordered sugar producers to produce relatively less sugar. 
C)  Individual consumers,concerned about their own health,decreased their demand for sugar,which lowered the relative price of sugar,making it less attractive to produce. 
D)  Anti-sugar protesters have made it difficult for both buyers and sellers of sugar to meet in the marketplace.

Question 16

What type of market is a monopoly?

Accepted Answer

A)  with one seller 
B)  with few sellers 
C)  with one buyer 
D)  with many buyers 
A)  with one seller 
B)  with few sellers 
C)  with one buyer 
D)  with many buyers

Question 17

What do demand and supply determine in a perfectly competitive market?

Accepted Answer

A)  income 
B)  expectations 
C)  price 
D)  costs of production 
A)  income 
B)  expectations 
C)  price 
D)  costs of production

Question 18

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also a reduction in input prices.What would we expect to occur in this market?

Accepted Answer

A)  The equilibrium price would increase,but the impact on the amount sold in the market would be ambiguous. 
B)  The equilibrium price would decrease,but the impact on the amount sold in the market would be ambiguous. 
C)  Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous. 
A)  The equilibrium price would increase,but the impact on the amount sold in the market would be ambiguous. 
B)  The equilibrium price would decrease,but the impact on the amount sold in the market would be ambiguous. 
C)  Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous.

Question 19

Lead is an important input in the production of crystal.If the price of lead decreases,all else being 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 20

Surpluses drive price up while shortages drive price down.

Accepted Answer

A) True 
 B)False

Market demand is given as QD = 200 - 3P.Market supply is given as QS = P + 10.If price increases from $35 to $40,what is the price elasticity of demand?

Market demand is given as Qd = 95 - P.Market supply is given as Qs = 3P + 15.In a perfectly competitive equilibrium,what will be the quantity?

Market demand is given as QD = 40 - 2P.Market supply is given as QS = 2P.If price increases from $4 to $7,what is the price elasticity of demand?

What happens if there is a shortage of a good at the current price?

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $8 to $11,what is the price elasticity of demand?

Anyone willing to pay the market price for a resource may have it.

What is the price where quantity supplied equals quantity demanded?

If there is an improvement in the technology of producing a product,the supply curve for that product will shift to the left.

Figure 4-2 -Refer to the Figure 4-2.What are the equilibrium price and quantity?

Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also an increase in input prices.What would we expect to occur in this market?

When an increase in the price of one good lowers the demand for another good,the two goods are called complements.

In what type of market do we refer to buyers and sellers as "price takers"?

What is one reason that government taxes on cigarettes reduce smoking?

Suppose you make jewellery.If the price of silver increases,what would we expect you to do?

Suppose that health officials have argued that eating too much sugar might be harmful to human health.As a result,there has been a significant decrease in the amount of sugar produced.Which of the following best explains the decrease in production?

What type of market is a monopoly?

What do demand and supply determine in a perfectly competitive market?

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also a reduction in input prices.What would we expect to occur in this market?

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

Surpluses drive price up while shortages drive price down.

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 = 200 - 3P.Market supply is given as QS = P + 10.If price increases from $35 to $40,what is the price elasticity of demand?

Market demand is given as Qd = 95 - P.Market supply is given as Qs = 3P + 15.In a perfectly competitive equilibrium,what will be the quantity?

Market demand is given as QD = 40 - 2P.Market supply is given as QS = 2P.If price increases from $4 to $7,what is the price elasticity of demand?

What happens if there is a shortage of a good at the current price?

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $8 to $11,what is the price elasticity of demand?

Anyone willing to pay the market price for a resource may have it.

What is the price where quantity supplied equals quantity demanded?

If there is an improvement in the technology of producing a product,the supply curve for that product will shift to the left.

Figure 4-2 -Refer to the Figure 4-2.What are the equilibrium price and quantity?

Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also an increase in input prices.What would we expect to occur in this market?

When an increase in the price of one good lowers the demand for another good,the two goods are called complements.

In what type of market do we refer to buyers and sellers as "price takers"?

What is one reason that government taxes on cigarettes reduce smoking?

Suppose you make jewellery.If the price of silver increases,what would we expect you to do?

Suppose that health officials have argued that eating too much sugar might be harmful to human health.As a result,there has been a significant decrease in the amount of sugar produced.Which of the following best explains the decrease in production?

What type of market is a monopoly?

What do demand and supply determine in a perfectly competitive market?

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also a reduction in input prices.What would we expect to occur in this market?

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

Surpluses drive price up while shortages drive price down.

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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