Question 1

All else held constant,an increase in demand will lead to a

Accepted Answer

A) decrease in price and increase in quantity supplied. 
B) increase in price and increase in quantity supplied. 
C) increase in price and decrease in quantity supplied. 
D) decrease in price and decrease in quantity supplied. 
A) decrease in price and increase in quantity supplied. 
B) increase in price and increase in quantity supplied. 
C) increase in price and decrease in quantity supplied. 
D) decrease in price and decrease in quantity supplied.

Question 2

Assume the market for coffee is initially in equilibrium.
a)Draw a demand and supply diagram to illustrate the initial equilibrium.
b)Explain the impact on the coffee market if there is an increase in the price of coffee beans.
c)Graphically illustrate the impact on the diagram you prepared for part (a).

Accepted Answer

a)
b)An increase in the price

Question 3

What will cause the demand for a normal product to increase?

Accepted Answer

A) The expectation by consumers that future prices will be higher. 
B) A decrease in the price of a substitute product. 
C) An increase in the price of a complementary product. 
D) A decrease in income levels. 
E) A decrease in the size of the population. 
A) The expectation by consumers that future prices will be higher. 
B) A decrease in the price of a substitute product. 
C) An increase in the price of a complementary product. 
D) A decrease in income levels. 
E) A decrease in the size of the population.

Question 4

Which of the following is not a result of the greater availability of electronic communication?

Accepted Answer

A) Buyers have access to more information. 
B) The sellers markets are expanding. 
C) Supply chain bottlenecks are increasing. 
D) The need to stockpile inventory is diminishing. 
A) Buyers have access to more information. 
B) The sellers markets are expanding. 
C) Supply chain bottlenecks are increasing. 
D) The need to stockpile inventory is diminishing.

Question 5

Which of the following pairs of goods are complementary?

Accepted Answer

A) Coffee and tea. 
B) Skis and ski boots. 
C) Bread and crackers. 
D) Popcorn and pretzels. 
A) Coffee and tea. 
B) Skis and ski boots. 
C) Bread and crackers. 
D) Popcorn and pretzels.

Question 6

What is supply?

Accepted Answer

A) The quantities which producers are both willing and able to sell per period of time at various prices. 
B) The total demand for a product by all consumers. 
C) The quantity which prevails at the equilibrium price. 
D) The quantity sold at a certain price. 
A) The quantities which producers are both willing and able to sell per period of time at various prices. 
B) The total demand for a product by all consumers. 
C) The quantity which prevails at the equilibrium price. 
D) The quantity sold at a certain price.

Question 7

In Agfa,at a market price of $3 per kilo,there is a shortage of 60 kilos of basmati rice.For each 50-cent increase in the price,the quantity demanded drops by 8 kilos,while the quantity supplied increases by 12 kilos.
a)What will be the equilibrium price?
b)What will be the surplus/shortage at a price of $5.50?

Accepted Answer

a)$4.50
b)

Question 8

Assume the market for apple pie is initially in equilibrium.
a)Draw a demand and supply diagram to illustrate the initial equilibrium.
b)Explain the impact on the apple pie market if there is an increase in the price of vanilla ice cream.
c)Graphically illustrate the impact on the diagram you prepared for part (a).

Accepted Answer

a)
b)Assuming vanilla ice cream and appl

Question 9

What is the effect on product A of an increase in the price of substitute product B?

Accepted Answer

A) It will cause an increase in the quantity demanded. 
B) It will cause an increase in demand. 
C) It will cause a decrease in demand. 
D) It will cause an increase in supply. 
E) It will cause a decrease in supply. 
A) It will cause an increase in the quantity demanded. 
B) It will cause an increase in demand. 
C) It will cause a decrease in demand. 
D) It will cause an increase in supply. 
E) It will cause a decrease in supply.

Question 10

An increase in the price of a product causes a decrease in the real income of consumers.

Accepted Answer

A) True 
 B)False

Question 11

-Refer to the above information to answer this question.If demand increases by 20 units,what will be the new values of equilibrium price and quantity?

Accepted Answer

A) $45 and 120. 
B) $50 and 120. 
C) $55 and 120. 
D) $52.50 and 110. 
E) $52.50 and 120. 
A) $45 and 120. 
B) $50 and 120. 
C) $55 and 120. 
D) $52.50 and 110. 
E) $52.50 and 120.

Question 12

The product is a normal product.
  
-Refer to the graph above to answer this question.What does the distance Q1 to Q3 represent?

Accepted Answer

A) The increase in equilibrium quantity traded resulting from an increase in demand. 
B) The decrease in equilibrium quantity traded resulting from an increase in demand. 
C) The increase in equilibrium quantity traded resulting from an increase in quantity demanded. 
D) The increase in equilibrium quantity traded resulting from an increase in quantity supplied. 
E) A shortage at price P2. 
A) The increase in equilibrium quantity traded resulting from an increase in demand. 
B) The decrease in equilibrium quantity traded resulting from an increase in demand. 
C) The increase in equilibrium quantity traded resulting from an increase in quantity demanded. 
D) The increase in equilibrium quantity traded resulting from an increase in quantity supplied. 
E) A shortage at price P2.

Question 13

"If the price of pineapples changes,demand will also change." Evaluate this statement.

Accepted Answer

If the price of pineapple chan

Question 14

The following table shows the quantity demanded and quantity supplied of grapefruits (in millions of kilos):
  
-Refer to the table above to answer this question.If the price of oranges (a substitute)were to decrease,causing the demand for grapefruit to change by 12 million of kilos,what will be the new equilibrium price and quantity?

Accepted Answer

A) $2.25 and 24 million kilos 
B) $2.25 and 48 million kilos 
C) $2.75 and 44 million kilos 
D) $3.25 and 40 million kilos 
A) $2.25 and 24 million kilos 
B) $2.25 and 48 million kilos 
C) $2.75 and 44 million kilos 
D) $3.25 and 40 million kilos

Question 15

Which of the following factors will shift the demand curve to the left?

Accepted Answer

A) An increase in the price of a substitute product. 
B) A decrease in the price of a complementary product. 
C) An increase in income if the product is an inferior product. 
D) The expectation that future prices of the product will be higher. 
A) An increase in the price of a substitute product. 
B) A decrease in the price of a complementary product. 
C) An increase in income if the product is an inferior product. 
D) The expectation that future prices of the product will be higher.

Question 16

-Refer to the above graph to answer this question.What could cause the movement from point C to point D?

Accepted Answer

A) A decrease in the supply. 
B) A decrease in the price. 
C) A decrease in prices of productive resources. 
D) An increase in the price of a substitute product. 
E) An increase in the price of a complementary product. 
A) A decrease in the supply. 
B) A decrease in the price. 
C) A decrease in prices of productive resources. 
D) An increase in the price of a substitute product. 
E) An increase in the price of a complementary product.

Question 17

Explain how a surplus will be eliminated.

Accepted Answer

A surplus occurs when the quantity deman

Question 18

What is the effect of an increase in demand for a product?

Accepted Answer

A) Its price will rise and quantity traded will decrease. 
B) Its price will rise and quantity traded will increase. 
C) Its price will fall and quantity traded will decrease. 
D) Its price will fall and quantity traded will increase. 
A) Its price will rise and quantity traded will decrease. 
B) Its price will rise and quantity traded will increase. 
C) Its price will fall and quantity traded will decrease. 
D) Its price will fall and quantity traded will increase.

Question 19

-Refer to Figure 2.15 to answer this question.Suppose that initially the market was in equilibrium and that demand increased by 60.What will be the new equilibrium as a result?

Accepted Answer

A) A price of $1,000 and quantity traded of 120. 
B) A price of $1,000 and quantity traded of 160. 
C) A price of $1,200 and quantity traded of 160. 
D) A price of $1,400 and quantity traded of 160. 
E) A price of $1,400 and quantity traded of 240. 
A) A price of $1,000 and quantity traded of 120. 
B) A price of $1,000 and quantity traded of 160. 
C) A price of $1,200 and quantity traded of 160. 
D) A price of $1,400 and quantity traded of 160. 
E) A price of $1,400 and quantity traded of 240.

Question 20

-Refer to the graph above to answer this question.What would be the new equilibrium price and quantity if supply increased by 120?

Accepted Answer

A) $1,000 and 240. 
B) $600 and 240. 
C) $600 and 160. 
D) $800 and 140. 
A) $1,000 and 240. 
B) $600 and 240. 
C) $600 and 160. 
D) $800 and 140.

All else held constant,an increase in demand will lead to a

What will cause the demand for a normal product to increase?

Which of the following is not a result of the greater availability of electronic communication?

Which of the following pairs of goods are complementary?

What is supply?

What is the effect on product A of an increase in the price of substitute product B?

An increase in the price of a product causes a decrease in the real income of consumers.

-Refer to the above information to answer this question.If demand increases by 20 units,what will be the new values of equilibrium price and quantity?

The product is a normal product. -Refer to the graph above to answer this question.What does the distance Q1 to Q3 represent?

"If the price of pineapples changes,demand will also change." Evaluate this statement.

Which of the following factors will shift the demand curve to the left?

-Refer to the above graph to answer this question.What could cause the movement from point C to point D?

Explain how a surplus will be eliminated.

What is the effect of an increase in demand for a product?

-Refer to Figure 2.15 to answer this question.Suppose that initially the market was in equilibrium and that demand increased by 60.What will be the new equilibrium as a result?

-Refer to the graph above to answer this question.What would be the new equilibrium price and quantity if supply increased by 120?

The Economic Problem

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters

Exam 2: Demand and Supply: an Introduction

All else held constant,an increase in demand will lead to a

What will cause the demand for a normal product to increase?

Which of the following is not a result of the greater availability of electronic communication?

Which of the following pairs of goods are complementary?

What is supply?

What is the effect on product A of an increase in the price of substitute product B?

An increase in the price of a product causes a decrease in the real income of consumers.

-Refer to the above information to answer this question.If demand increases by 20 units,what will be the new values of equilibrium price and quantity?

The product is a normal product. -Refer to the graph above to answer this question.What does the distance Q1 to Q3 represent?

"If the price of pineapples changes,demand will also change." Evaluate this statement.

Which of the following factors will shift the demand curve to the left?

-Refer to the above graph to answer this question.What could cause the movement from point C to point D?

Explain how a surplus will be eliminated.

What is the effect of an increase in demand for a product?

-Refer to Figure 2.15 to answer this question.Suppose that initially the market was in equilibrium and that demand increased by 60.What will be the new equilibrium as a result?

-Refer to the graph above to answer this question.What would be the new equilibrium price and quantity if supply increased by 120?

The Economic Problem

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters