Question 1

The law of supply states that everything remains the same:

Accepted Answer

A)  there is a negative relationship between the quantity supplied and the price. 
B)  the demand follows the supply. 
C)  the price of the good is determined by the demand not by supply. 
D)  the higher the price the more quantity will be supplied to the market. 
A)  there is a negative relationship between the quantity supplied and the price. 
B)  the demand follows the supply. 
C)  the price of the good is determined by the demand not by supply. 
D)  the higher the price the more quantity will be supplied to the market.

Question 2

Assuming that oranges and apples can both be grown on the same type of land, a decrease in the price of apples, other things being equal, will cause a/an:

Accepted Answer

A)  upward movement along the supply curve for oranges. 
B)  downward movement along the supply curve for oranges. 
C)  rightward shift of the supply curve for oranges. 
D)  leftward shift of the supply curve for oranges. 
A)  upward movement along the supply curve for oranges. 
B)  downward movement along the supply curve for oranges. 
C)  rightward shift of the supply curve for oranges. 
D)  leftward shift of the supply curve for oranges.

Question 3

Consider the following statement: 'Due to the drought the quantity of water available for consumption reduced dramatically'. This will cause a/an:

Accepted Answer

A)  downward movement along the supply curve for water. 
B)  upward movement along the supply curve for water. 
C)  rightward shift in the supply curve for water. 
D)  leftward shift in the supply curve for water. 
A)  downward movement along the supply curve for water. 
B)  upward movement along the supply curve for water. 
C)  rightward shift in the supply curve for water. 
D)  leftward shift in the supply curve for water.

Question 4

Demand is a relationship between two economic variables:

Accepted Answer

A)  the cost of a particular good and the quantity of the good produced. 
B)  the cost of a particular good and the quantity of the good consumers are willing to buy. 
C)  the price of a particular good and the price consumers are willing to pay. 
D)  the price of a particular good and the quantity of the good consumers are willing to buy. 
A)  the cost of a particular good and the quantity of the good produced. 
B)  the cost of a particular good and the quantity of the good consumers are willing to buy. 
C)  the price of a particular good and the price consumers are willing to pay. 
D)  the price of a particular good and the quantity of the good consumers are willing to buy.

Question 5

A complementary good is:

Accepted Answer

A)  a good that is not related to any other good. 
B)  a good that is given to you for free. 
C)  a good that is jointly consumed with another good. 
D)  a good that is consumed instead of another good. 
A)  a good that is not related to any other good. 
B)  a good that is given to you for free. 
C)  a good that is jointly consumed with another good. 
D)  a good that is consumed instead of another good.

Question 6

'Coal mining companies anticipate an additional tax.' This statement indicates that the:

Accepted Answer

A)  price of coal will fall. 
B)  quantity of coal that will be available at any given price has decreased. 
C)  demand for coal will shift to the left. 
D)  quantity of coal that will be available at any given price has increased. 
A)  price of coal will fall. 
B)  quantity of coal that will be available at any given price has decreased. 
C)  demand for coal will shift to the left. 
D)  quantity of coal that will be available at any given price has increased.

Question 7

Which of the following will not cause a shift in the demand curve for good X?

Accepted Answer

A)  A change in the price of a complementary good. 
B)  A change in the price of good X. 
C)  A change in consumer tastes and preferences for good X. 
D)  An increase in consumer income. 
A)  A change in the price of a complementary good. 
B)  A change in the price of good X. 
C)  A change in consumer tastes and preferences for good X. 
D)  An increase in consumer income.

Question 8

A shortage of wheat:

Accepted Answer

A)  is impossible if people are hungry. 
B)  is impossible if the price of wheat is higher than the market equilibrium. 
C)  will result when the quantity supplied exceeds the quantity demanded at the current price. 
D)  is unlikely to cause any change in the price of wheat. 
A)  is impossible if people are hungry. 
B)  is impossible if the price of wheat is higher than the market equilibrium. 
C)  will result when the quantity supplied exceeds the quantity demanded at the current price. 
D)  is unlikely to cause any change in the price of wheat.

Question 9

A shortage occurs when a good is in great demand.

Accepted Answer

A) True 
 B)False

Question 10

A decrease in the demand for peanut butter, a normal good, can be caused by a/an:

Accepted Answer

A)  decrease in consumer income. 
B)  increase in the price of jams and preserves. 
C)  decrease in the price of bread. 
D)  drought in Queensland that destroyed 30 per cent of the peanut crop. 
A)  decrease in consumer income. 
B)  increase in the price of jams and preserves. 
C)  decrease in the price of bread. 
D)  drought in Queensland that destroyed 30 per cent of the peanut crop.

Question 11

The introduction of the carbon trading scheme which requires polluters to purchase permits will:

Accepted Answer

A)  shift the supply curve to the left. 
B)  shift the supply curve to the right. 
C)  increase the quantity supplied. 
D)  decrease the quantity supplied. 
A)  shift the supply curve to the left. 
B)  shift the supply curve to the right. 
C)  increase the quantity supplied. 
D)  decrease the quantity supplied.

Question 12

Suppose that X and Y are substitute goods. If the price of good X increases, we can expect:

Accepted Answer

A)  the demand for good X to shift to the left. 
B)  an upward movement along the demand curve for good Y. 
C)  the demand curve for good Y to shift to the right. 
D)  a downward movement along the demand curve for good Y. 
A)  the demand for good X to shift to the left. 
B)  an upward movement along the demand curve for good Y. 
C)  the demand curve for good Y to shift to the right. 
D)  a downward movement along the demand curve for good Y.

Question 13

Narrbegin Exhibit 3.2 Demand curves
 
-Which of the graphs in Exhibit 3.2 depicts the effect of new information about healing properties of honey on the demand curve for sugar?

Accepted Answer

A)  Graph A. 
B)  Graph B 
C)  Graph C. 
D)  Graph D. 
A)  Graph A. 
B)  Graph B 
C)  Graph C. 
D)  Graph D.

Question 14

Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes up.

Accepted Answer

A) True 
 B)False

Question 15

Narrbegin Exhibit 3.5 Demand and supply data for radios
 $$\begin{array} { | c | c | c | } 
\hline \text { Price (\$) } & \begin{array} { c } 
\text { Quantity demanded } \
\text { of radios }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { of radios }
\end{array} \
\hline 75 & 400 & 800 \
\hline 70 & 450 & 750 \
\hline 65 & 500 & 700 \
\hline 60 & 550 & 650 \
\hline 55 & 600 & 600 \
\hline 50 & 650 & 550 \
\hline 45& 700 & 500 \
\hline 40 & 750 & 450 \
\hline
\end{array}$$ 
-In Exhibit 3.5, at any market price of radios below $55, an _____ would result, causing the price to _____.

Accepted Answer

A)  excess demand; rise 
B)  excess supply; rise 
C)  excess demand; fall 
D)  excess supply; fall 
A)  excess demand; rise 
B)  excess supply; rise 
C)  excess demand; fall 
D)  excess supply; fall

Question 16

Narrbegin Exhibit 3.2 Demand curves
 
-Which of the graphs in Exhibit 3.2 depicts the effect of an increase in income on the demand for luxury cars?

Accepted Answer

A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  Graph D. 
A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  Graph D.

Question 17

The relationship between price and quantity demanded:

Accepted Answer

A)  can only be presented in a tabular form. 
B)  is always illustrated by a graph. 
C)  can be represented either numerically or graphically. 
D)  must be presented using a graph. 
A)  can only be presented in a tabular form. 
B)  is always illustrated by a graph. 
C)  can be represented either numerically or graphically. 
D)  must be presented using a graph.

Question 18

If the quantity demanded is less than the quantity supplied, then:

Accepted Answer

A)  the price will have to increase to establish equilibrium. 
B)  there will be an excess supply of goods. 
C)  the quantity supplied will be less than the quantity demanded. 
D)  the demand will shift to the right. 
A)  the price will have to increase to establish equilibrium. 
B)  there will be an excess supply of goods. 
C)  the quantity supplied will be less than the quantity demanded. 
D)  the demand will shift to the right.

Question 19

Other things being equal, the effect of a decrease in the price of compact discs on the market for compact disc players is a/an:

Accepted Answer

A)  leftward shift in the demand curve for compact disc players. 
B)  upward movement along the demand curve for compact disc players. 
C)  rightward shift in the demand curve for compact disc players. 
D)  downward movement along the demand curve for compact disc players. 
A)  leftward shift in the demand curve for compact disc players. 
B)  upward movement along the demand curve for compact disc players. 
C)  rightward shift in the demand curve for compact disc players. 
D)  downward movement along the demand curve for compact disc players.

Question 20

Which of the following would decrease the supply of airline travel?

Accepted Answer

A)  Reduced numbers of airline travellers. 
B)  New airline companies beginning operations. 
C)  Higher fuel costs. 
D)  Lower prices for airline tickets. 
A)  Reduced numbers of airline travellers. 
B)  New airline companies beginning operations. 
C)  Higher fuel costs. 
D)  Lower prices for airline tickets.

The law of supply states that everything remains the same:

Assuming that oranges and apples can both be grown on the same type of land, a decrease in the price of apples, other things being equal, will cause a/an:

Consider the following statement: 'Due to the drought the quantity of water available for consumption reduced dramatically'. This will cause a/an:

Demand is a relationship between two economic variables:

A complementary good is:

'Coal mining companies anticipate an additional tax.' This statement indicates that the:

Which of the following will not cause a shift in the demand curve for good X?

A shortage of wheat:

A shortage occurs when a good is in great demand.

A decrease in the demand for peanut butter, a normal good, can be caused by a/an:

The introduction of the carbon trading scheme which requires polluters to purchase permits will:

Suppose that X and Y are substitute goods. If the price of good X increases, we can expect:

Narrbegin Exhibit 3.2 Demand curves -Which of the graphs in Exhibit 3.2 depicts the effect of new information about healing properties of honey on the demand curve for sugar?

Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes up.

Narrbegin Exhibit 3.2 Demand curves -Which of the graphs in Exhibit 3.2 depicts the effect of an increase in income on the demand for luxury cars?

The relationship between price and quantity demanded:

If the quantity demanded is less than the quantity supplied, then:

Other things being equal, the effect of a decrease in the price of compact discs on the market for compact disc players is a/an:

Which of the following would decrease the supply of airline travel?

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters

Exam 4: Market Demand and Supply

The law of supply states that everything remains the same:

Assuming that oranges and apples can both be grown on the same type of land, a decrease in the price of apples, other things being equal, will cause a/an:

Consider the following statement: 'Due to the drought the quantity of water available for consumption reduced dramatically'. This will cause a/an:

Demand is a relationship between two economic variables:

A complementary good is:

'Coal mining companies anticipate an additional tax.' This statement indicates that the:

Which of the following will not cause a shift in the demand curve for good X?

A shortage of wheat:

A shortage occurs when a good is in great demand.

A decrease in the demand for peanut butter, a normal good, can be caused by a/an:

The introduction of the carbon trading scheme which requires polluters to purchase permits will:

Suppose that X and Y are substitute goods. If the price of good X increases, we can expect:

Narrbegin Exhibit 3.2 Demand curves -Which of the graphs in Exhibit 3.2 depicts the effect of new information about healing properties of honey on the demand curve for sugar?

Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes up.

Narrbegin Exhibit 3.2 Demand curves -Which of the graphs in Exhibit 3.2 depicts the effect of an increase in income on the demand for luxury cars?

The relationship between price and quantity demanded:

If the quantity demanded is less than the quantity supplied, then:

Other things being equal, the effect of a decrease in the price of compact discs on the market for compact disc players is a/an:

Which of the following would decrease the supply of airline travel?

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters