Question 1

"Excess demand" can also be described as

Accepted Answer

A) excess supply. 
B) the area to the left of the equilibrium price on a supply and demand diagram. 
C) quantity demanded exceeding quantity supplied. 
D) quantity supplied exceeding quantity demanded. 
E) the area to the right of the equilibrium price on a supply and demand diagram. 
A) excess supply. 
B) the area to the left of the equilibrium price on a supply and demand diagram. 
C) quantity demanded exceeding quantity supplied. 
D) quantity supplied exceeding quantity demanded. 
E) the area to the right of the equilibrium price on a supply and demand diagram. C

Question 2

A "decrease in supply" refers to which of the following?

Accepted Answer

A) the likely result from a decrease in the price of a factor of production 
B) a downward movement along a supply curve 
C) a decrease in quantity supplied 
D) a leftward shift in the supply curve 
E) a drop in the quantity actually exchanged 
A) the likely result from a decrease in the price of a factor of production 
B) a downward movement along a supply curve 
C) a decrease in quantity supplied 
D) a leftward shift in the supply curve 
E) a drop in the quantity actually exchanged D

Question 3

Suppose the price of wheat has fallen from $3 to $2 per bushel and that the price of newsprint has fallen from $200 to $100 per tonne.The relative price of wheat in terms of newsprint

Accepted Answer

A) has fallen. 
B) has risen. 
C) remained constant. 
D) cannot be determined from the above data. 
E) is completely unrelated. 
A) has fallen. 
B) has risen. 
C) remained constant. 
D) cannot be determined from the above data. 
E) is completely unrelated. B

Question 4

The demand and supply schedules for a hypothetical Canadian market for barley are given below:   TABLE 3-3 Refer to Table 3-3.The equilibrium price of barley is

Accepted Answer

A) $125. 
B) $150. 
C) $175. 
D) $200. 
E) $225. 
A) $125. 
B) $150. 
C) $175. 
D) $200. 
E) $225.

Question 5

If a demand curve and a supply curve can be stated functionally as QD = 100 - 5p; and QS = 90 + 5p,respectively,then the equilibrium quantity and price would be

Accepted Answer

A) Q = 95; p = 1. 
B) Q = 1; p = 95. 
C) Q = 190; p = 1. 
D) Q = 95; p = 10. 
E) Q = 190; p = 10. 
A) Q = 95; p = 1. 
B) Q = 1; p = 95. 
C) Q = 190; p = 1. 
D) Q = 95; p = 10. 
E) Q = 190; p = 10.

Question 6

"Demand" in a particular market refers to

Accepted Answer

A) only the quantity demanded by households at current market prices. 
B) the quantity purchased at the current market price. 
C) the quantity that is desired but not satisfied by current supply. 
D) the entire relationship between quantity demanded and price. 
E) the relationship between demand and supply. 
A) only the quantity demanded by households at current market prices. 
B) the quantity purchased at the current market price. 
C) the quantity that is desired but not satisfied by current supply. 
D) the entire relationship between quantity demanded and price. 
E) the relationship between demand and supply.

Question 7

The positive slope of a supply curve indicates that

Accepted Answer

A) as price goes up,quantity supplied will decrease. 
B) consumers will want to buy less at higher prices. 
C) as price goes up,quantity supplied will increase. 
D) if the costs of production increase,the quantity supplied will increase. 
E) as price goes up,quantity supplied will remain constant. 
A) as price goes up,quantity supplied will decrease. 
B) consumers will want to buy less at higher prices. 
C) as price goes up,quantity supplied will increase. 
D) if the costs of production increase,the quantity supplied will increase. 
E) as price goes up,quantity supplied will remain constant.

Question 8

The demand and supply schedules for a hypothetical Canadian market for barley are given below:   TABLE 3-3 Refer to Table 3-3.If the price in this market was $100 per tonne,then the amount of barley actually purchased would be ________ million tonnes.

Accepted Answer

A) 70 
B) -70 
C) 670 
D) 300 
E) 370 
A) 70 
B) -70 
C) 670 
D) 300 
E) 370

Question 9

Weekend train travel costs less than weekday train travel.If the supply of train service remains the same between weekdays and weekends,then the most likely explanation for this difference in price is that the weekend

Accepted Answer

A) demand curve is to the left of the weekday demand curve. 
B) demand curve is to the right of the weekday demand curve. 
C) demand curve is random. 
D) supply curve is to the right of the weekday supply curve. 
E) supply curve is to the left of the weekday supply curve. 
A) demand curve is to the left of the weekday demand curve. 
B) demand curve is to the right of the weekday demand curve. 
C) demand curve is random. 
D) supply curve is to the right of the weekday supply curve. 
E) supply curve is to the left of the weekday supply curve.

Question 10

The demand and supply schedules for a hypothetical Canadian market for barley are given below:   TABLE 3-3 Refer to Table 3-3.At a price of $125 per tonne there would be an excess ________ million tonnes of barley.

Accepted Answer

A) supply of 325 
B) demand of 360 
C) supply of 35 
D) demand of 35 
E) supply of 125 
A) supply of 325 
B) demand of 360 
C) supply of 35 
D) demand of 35 
E) supply of 125

Question 11

The term "supply" in a particular market refers to

Accepted Answer

A) the particular quantity supplied at the moment. 
B) only one point on the supply curve. 
C) only one entry in a supply schedule. 
D) the entire relationship between quantity supplied and price. 
E) the quantity actually sold to consumers. 
A) the particular quantity supplied at the moment. 
B) only one point on the supply curve. 
C) only one entry in a supply schedule. 
D) the entire relationship between quantity supplied and price. 
E) the quantity actually sold to consumers.

Question 12

Four of the five statements below contain a stock and a flow.Which statement describes ONLY stock variables?

Accepted Answer

A) Chris earns $1500 per month and has $4000 in his savings account at the bank. 
B) Nancy has a balance owing on her credit card of $2567 and a debt on her line of credit of $14,050. 
C) The Transit Authority of Mytown collects $22 000 in fares per day and has an operating budget of $2 million per year. 
D) Country X spends an average of $1 million per year for flood relief and has an emergency services fund of $20 million. 
E) The Canadian Federal government has a debt of approximately $750 billion and an annual deficit of over $25 billion dollars. 
A) Chris earns $1500 per month and has $4000 in his savings account at the bank. 
B) Nancy has a balance owing on her credit card of $2567 and a debt on her line of credit of $14,050. 
C) The Transit Authority of Mytown collects $22 000 in fares per day and has an operating budget of $2 million per year. 
D) Country X spends an average of $1 million per year for flood relief and has an emergency services fund of $20 million. 
E) The Canadian Federal government has a debt of approximately $750 billion and an annual deficit of over $25 billion dollars.

Question 13

Aeronautical engineers are a factor of production for airplanes.What will happen in the world market for airplanes when there is a worldwide shortage of aeronautical engineers?

Accepted Answer

A) Price will increase; quantity exchanged will decrease. 
B) Price will increase; quantity exchanged will increase. 
C) Price will decrease; quantity exchanged will decrease. 
D) Price will decrease; quantity exchanged will increase. 
E) There will be no change in price or quantity exchanged. 
A) Price will increase; quantity exchanged will decrease. 
B) Price will increase; quantity exchanged will increase. 
C) Price will decrease; quantity exchanged will decrease. 
D) Price will decrease; quantity exchanged will increase. 
E) There will be no change in price or quantity exchanged.

Question 14

At the market-clearing price for a commodity,

Accepted Answer

A) prices will remain unchanged,even if there is excess demand. 
B) there may be excess demand for a product but not excess supply. 
C) shifts in the supply or demand curves will not cause price changes. 
D) the quantity supplied of the commodity equals quantity demanded. 
E) there will never again be any pressure for prices to change,independent of what happens to demand or supply. 
A) prices will remain unchanged,even if there is excess demand. 
B) there may be excess demand for a product but not excess supply. 
C) shifts in the supply or demand curves will not cause price changes. 
D) the quantity supplied of the commodity equals quantity demanded. 
E) there will never again be any pressure for prices to change,independent of what happens to demand or supply.

Question 15

A supply curve is a representation of the relationship,ceteris paribus,between quantity supplied of a product and

Accepted Answer

A) demand. 
B) quantity demanded. 
C) the number of sellers. 
D) preference of sellers. 
E) the product's own price. 
A) demand. 
B) quantity demanded. 
C) the number of sellers. 
D) preference of sellers. 
E) the product's own price.

Question 16

Consider cars and gasoline.Other things being equal,when the price of cars decreases,the demand for gasoline is likely to

Accepted Answer

A) remain unchanged because cars and gasoline are produced independently of one another. 
B) decrease because the two goods are complements. 
C) remain unchanged. 
D) increase because the two goods are complements. 
E) remain unchanged because cars and gasoline are two distinct markets. 
A) remain unchanged because cars and gasoline are produced independently of one another. 
B) decrease because the two goods are complements. 
C) remain unchanged. 
D) increase because the two goods are complements. 
E) remain unchanged because cars and gasoline are two distinct markets.

Question 17

FIGURE 3-6 Refer to Figure 3-6.If the demand curve shifts from D1 to D2,while supply remains at S1,one could say that

Accepted Answer

A) the quantity demanded has decreased to Q1 and price has fallen to P2. 
B) there has been an increase in demand for X. 
C) the price of a good which is a substitute for X must have fallen. 
D) the price increase has caused an increase in quantity demanded. 
E) there is now an excess demand at the new price of P1. 
A) the quantity demanded has decreased to Q1 and price has fallen to P2. 
B) there has been an increase in demand for X. 
C) the price of a good which is a substitute for X must have fallen. 
D) the price increase has caused an increase in quantity demanded. 
E) there is now an excess demand at the new price of P1.

Question 18

FIGURE 3-1 Refer to Figure 3-1.A shift of the demand curve for energy-efficient light bulbs from D to D2 could be caused by

Accepted Answer

A) an increase in the price of ordinary light bulbs. 
B) a change in preferences away from ordinary bulbs to energy-efficient bulbs. 
C) an expectation that new government regulation will require the use of energy-efficient light bulbs only. 
D) a decrease in the price of energy-efficient light bulbs. 
E) a news bulletin stating that energy-efficient light bulbs emit a harmful gas. 
A) an increase in the price of ordinary light bulbs. 
B) a change in preferences away from ordinary bulbs to energy-efficient bulbs. 
C) an expectation that new government regulation will require the use of energy-efficient light bulbs only. 
D) a decrease in the price of energy-efficient light bulbs. 
E) a news bulletin stating that energy-efficient light bulbs emit a harmful gas.

Question 19

Assume that apples and oranges are substitute goods.Given the initial supply and demand curves for apples,a reduction in the price of oranges will tend to

Accepted Answer

A) increase the price of apples. 
B) increase the demand for apples. 
C) increase the demand for oranges. 
D) decrease the demand for oranges. 
E) decrease the price of apples. 
A) increase the price of apples. 
B) increase the demand for apples. 
C) increase the demand for oranges. 
D) decrease the demand for oranges. 
E) decrease the price of apples.

Question 20

A variable that is a "stock"

Accepted Answer

A) is measured per unit of time. 
B) has meaning only at a point in time. 
C) has only to do with products where inventory is kept. 
D) has the same units as a flow variable. 
E) is used only in accounting. 
A) is measured per unit of time. 
B) has meaning only at a point in time. 
C) has only to do with products where inventory is kept. 
D) has the same units as a flow variable. 
E) is used only in accounting.

"Excess demand" can also be described as

A "decrease in supply" refers to which of the following?

Suppose the price of wheat has fallen from $3 to $2 per bushel and that the price of newsprint has fallen from $200 to $100 per tonne.The relative price of wheat in terms of newsprint

The demand and supply schedules for a hypothetical Canadian market for barley are given below: TABLE 3-3 Refer to Table 3-3.The equilibrium price of barley is

If a demand curve and a supply curve can be stated functionally as Q_D = 100 - 5p; and Q_S = 90 + 5p,respectively,then the equilibrium quantity and price would be

"Demand" in a particular market refers to

The positive slope of a supply curve indicates that

The demand and supply schedules for a hypothetical Canadian market for barley are given below: TABLE 3-3 Refer to Table 3-3.If the price in this market was $100 per tonne,then the amount of barley actually purchased would be ________ million tonnes.

Weekend train travel costs less than weekday train travel.If the supply of train service remains the same between weekdays and weekends,then the most likely explanation for this difference in price is that the weekend

The demand and supply schedules for a hypothetical Canadian market for barley are given below: TABLE 3-3 Refer to Table 3-3.At a price of $125 per tonne there would be an excess ________ million tonnes of barley.

The term "supply" in a particular market refers to

Four of the five statements below contain a stock and a flow.Which statement describes ONLY stock variables?

Aeronautical engineers are a factor of production for airplanes.What will happen in the world market for airplanes when there is a worldwide shortage of aeronautical engineers?

At the market-clearing price for a commodity,

A supply curve is a representation of the relationship,ceteris paribus,between quantity supplied of a product and

Consider cars and gasoline.Other things being equal,when the price of cars decreases,the demand for gasoline is likely to

FIGURE 3-6 Refer to Figure 3-6.If the demand curve shifts from D₁ to D₂,while supply remains at S₁,one could say that

FIGURE 3-1 Refer to Figure 3-1.A shift of the demand curve for energy-efficient light bulbs from D to D² could be caused by

Assume that apples and oranges are substitute goods.Given the initial supply and demand curves for apples,a reduction in the price of oranges will tend to

A variable that is a "stock"

Economic Issues and Concepts

Economic Theories, data, and Graphs

What Macroeconomics Is All About

The Measurement of National Income

The Simplest Short-Run Macro Model

Adding Government and Trade to the Simple Macro Model

Real Gdp and the Price Level in the Short Run

From the Short Run to the Long Run: the Adjustment of Factor Prices

Long-Run Economic Growth

Money and Banking

Money, interest Rates, and Economic Activity

Monetary Policy in Canada

Inflation and Disinflation

Unemployment Fluctuations and the Nairu

Government Debt and Deficits

The Gains From International Trade

Trade Policy

Exchange Rates and the Balance of Payments

Filters

Exam 3: Demand, supply, and Price

"Excess demand" can also be described as

A "decrease in supply" refers to which of the following?

Suppose the price of wheat has fallen from $3 to $2 per bushel and that the price of newsprint has fallen from $200 to $100 per tonne.The relative price of wheat in terms of newsprint

The demand and supply schedules for a hypothetical Canadian market for barley are given below: TABLE 3-3 Refer to Table 3-3.The equilibrium price of barley is

If a demand curve and a supply curve can be stated functionally as QD = 100 - 5p; and QS = 90 + 5p,respectively,then the equilibrium quantity and price would be

"Demand" in a particular market refers to

The positive slope of a supply curve indicates that

The demand and supply schedules for a hypothetical Canadian market for barley are given below: TABLE 3-3 Refer to Table 3-3.If the price in this market was $100 per tonne,then the amount of barley actually purchased would be ________ million tonnes.

Weekend train travel costs less than weekday train travel.If the supply of train service remains the same between weekdays and weekends,then the most likely explanation for this difference in price is that the weekend

The demand and supply schedules for a hypothetical Canadian market for barley are given below: TABLE 3-3 Refer to Table 3-3.At a price of $125 per tonne there would be an excess ________ million tonnes of barley.

The term "supply" in a particular market refers to

Four of the five statements below contain a stock and a flow.Which statement describes ONLY stock variables?

Aeronautical engineers are a factor of production for airplanes.What will happen in the world market for airplanes when there is a worldwide shortage of aeronautical engineers?

At the market-clearing price for a commodity,

A supply curve is a representation of the relationship,ceteris paribus,between quantity supplied of a product and

Consider cars and gasoline.Other things being equal,when the price of cars decreases,the demand for gasoline is likely to

FIGURE 3-6 Refer to Figure 3-6.If the demand curve shifts from D1 to D2,while supply remains at S1,one could say that

FIGURE 3-1 Refer to Figure 3-1.A shift of the demand curve for energy-efficient light bulbs from D to D2 could be caused by

Assume that apples and oranges are substitute goods.Given the initial supply and demand curves for apples,a reduction in the price of oranges will tend to

A variable that is a "stock"

Economic Issues and Concepts

Economic Theories, data, and Graphs

What Macroeconomics Is All About

The Measurement of National Income

The Simplest Short-Run Macro Model

Adding Government and Trade to the Simple Macro Model

Real Gdp and the Price Level in the Short Run

From the Short Run to the Long Run: the Adjustment of Factor Prices

Long-Run Economic Growth

Money and Banking

Money, interest Rates, and Economic Activity

Monetary Policy in Canada

Inflation and Disinflation

Unemployment Fluctuations and the Nairu

Government Debt and Deficits

The Gains From International Trade

Trade Policy

Exchange Rates and the Balance of Payments

Filters

If a demand curve and a supply curve can be stated functionally as Q_D = 100 - 5p; and Q_S = 90 + 5p,respectively,then the equilibrium quantity and price would be

FIGURE 3-6 Refer to Figure 3-6.If the demand curve shifts from D₁ to D₂,while supply remains at S₁,one could say that

FIGURE 3-1 Refer to Figure 3-1.A shift of the demand curve for energy-efficient light bulbs from D to D² could be caused by