Question 1

Which of the following would NOT be a determinant of demand?

Accepted Answer

A)  the price of related goods 
B)  income 
C)  expectations 
D)  the prices of the inputs used to produce the good 
A)  the price of related goods 
B)  income 
C)  expectations 
D)  the prices of the inputs used to produce the good

Question 2

Market demand is given as Qd = 300 - 2P. Market supply is given as Qs = 2P + 100. In a perfectly competitive equilibrium, what will be price and quantity?

Accepted Answer

A)  Price will be $20 and quantity will be 140. 
B)  Price will be $50 and quantity will be 200. 
C)  Price will be $100 and quantity will be 300. 
D)  Price will be $140 and quantity will be 380. 
A)  Price will be $20 and quantity will be 140. 
B)  Price will be $50 and quantity will be 200. 
C)  Price will be $100 and quantity will be 300. 
D)  Price will be $140 and quantity will be 380.

Question 3

What is a table called that shows the relationship between the price of a good and the quantity demanded?

Accepted Answer

A)  demand table 
B)  demand schedule 
C)  market table 
D)  quantity-demanded schedule 
A)  demand table 
B)  demand schedule 
C)  market table 
D)  quantity-demanded schedule

Question 4

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.

Question 5

Whenever a determinant of demand other than price changes, the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 6

If the number of buyers in the housing market decreases, what will happen?

Accepted Answer

A)  Demand in the market will increase. 
B)  Demand in the market will decrease. 
C)  Supply in the market will increase. 
D)  Supply in the market will decrease. 
A)  Demand in the market will increase. 
B)  Demand in the market will decrease. 
C)  Supply in the market will increase. 
D)  Supply in the market will decrease.

Question 7

What happens in a competitive market?

Accepted Answer

A)  There is only one seller of the product. 
B)  Each seller of the product is free to set the price of his product. 
C)  Each seller attempts to compete with other sellers, causing fewer sellers in the market. 
D)  There are so many buyers and sellers that each has a negligible impact on price. 
A)  There is only one seller of the product. 
B)  Each seller of the product is free to set the price of his product. 
C)  Each seller attempts to compete with other sellers, causing fewer sellers in the market. 
D)  There are so many buyers and sellers that each has a negligible impact on price.

Question 8

Figure 4-2
  
-Refer to the Figure 4-2. What would happen at a price of $35?

Accepted Answer

A)  There would be a shortage of 400 units. 
B)  There would be a shortage of 200 units. 
C)  There would be a surplus of 200 units. 
D)  There would be a surplus of 400 units. 
A)  There would be a shortage of 400 units. 
B)  There would be a shortage of 200 units. 
C)  There would be a surplus of 200 units. 
D)  There would be a surplus of 400 units.

Question 9

You have decided to purchase a new Mustang convertible. A friend tells you that Ford will be offering a $3000 rebate on Mustangs starting next month. As a result of this information, what will happen to your demand curve for Mustangs?

Accepted Answer

A)  could shift either right or left 
B)  shifts right today 
C)  curve will be unaffected 
D)  shifts left today 
A)  could shift either right or left 
B)  shifts right today 
C)  curve will be unaffected 
D)  shifts left today

Question 10

Figure 4-6
  
-Refer to the Figure 4-6. What is the shift from D₁
To D called?

Accepted Answer

A)  an increase in demand 
B)  a decrease in demand 
C)  a decrease in quantity demanded 
D)  an increase in quantity demanded 
A)  an increase in demand 
B)  a decrease in demand 
C)  a decrease in quantity demanded 
D)  an increase in quantity demanded

Question 11

Holding all else constant, what will result from a higher price for ski-lift tickets?

Accepted Answer

A)  increased number of skiers 
B)  decreased supply of ski resorts 
C)  decreased demand for other winter recreational activities 
D)  decreased ski sales 
A)  increased number of skiers 
B)  decreased supply of ski resorts 
C)  decreased demand for other winter recreational activities 
D)  decreased ski sales

Question 12

What happens when there is a shortage in a market?

Accepted Answer

A)  There is downward pressure on price. 
B)  There is upward pressure on price. 
C)  The market is operating above the equilibrium level. 
D)  The price must be above equilibrium. 
A)  There is downward pressure on price. 
B)  There is upward pressure on price. 
C)  The market is operating above the equilibrium level. 
D)  The price must be above equilibrium.

Question 13

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts fell, the price of jelly (a complementary good) fell, more firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

Accepted Answer

A)  price will fall and the effect on quantity is ambiguous 
B)  price will rise and the effect on quantity is ambiguous 
C)  quantity will fall and the effect on price is ambiguous 
D)  quantity will rise and the effect on price is ambiguous 
A)  price will fall and the effect on quantity is ambiguous 
B)  price will rise and the effect on quantity is ambiguous 
C)  quantity will fall and the effect on price is ambiguous 
D)  quantity will rise and the effect on price is ambiguous

Question 14

If a good is "normal," what will an increase in income result in?

Accepted Answer

A)  an increase in supply of that good 
B)  an increase in the demand for the good 
C)  a decrease in the demand for the good 
D)  a lower market price 
A)  an increase in supply of that good 
B)  an increase in the demand for the good 
C)  a decrease in the demand for the good 
D)  a lower market price

Question 15

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 16

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly (a complementary good) increased, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was bad for you?

Accepted Answer

A)  price will fall and the effect on quantity is ambiguous 
B)  price will rise and the effect on quantity is ambiguous 
C)  quantity will fall and the effect on price is ambiguous 
D)  quantity will rise and the effect on price is ambiguous 
A)  price will fall and the effect on quantity is ambiguous 
B)  price will rise and the effect on quantity is ambiguous 
C)  quantity will fall and the effect on price is ambiguous 
D)  quantity will rise and the effect on price is ambiguous

Question 17

Suppose there is an earthquake that destroys several seaside resorts. Which of the following would NOT occur as a direct result of this event?

Accepted Answer

A)  Sellers would not be willing to produce and sell as much as before at each relevant price. 
B)  The supply would decrease. 
C)  Buyers would not be willing to buy as much as before at each relevant price. 
D)  The equilibrium price would rise. 
A)  Sellers would not be willing to produce and sell as much as before at each relevant price. 
B)  The supply would decrease. 
C)  Buyers would not be willing to buy as much as before at each relevant price. 
D)  The equilibrium price would rise.

Question 18

Pens are normal goods. What will happen to the equilibrium price of pens if the prices of pencils falls, consumers experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to fall in the near future, the population increases, fewer firms manufacture pens, and the wages of pen-makers decrease?

Accepted Answer

A)  price will rise 
B)  price will fall 
C)  price will stay exactly the same 
D)  price change will be ambiguous 
A)  price will rise 
B)  price will fall 
C)  price will stay exactly the same 
D)  price change will be ambiguous

Question 19

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 20

What is the term for the behaviour of people as they interact with one another in markets?

Accepted Answer

A)  economics 
B)  interaction 
C)  demand and supply 
D)  social psychology 
A)  economics 
B)  interaction 
C)  demand and supply 
D)  social psychology

Which of the following would NOT be a determinant of demand?

Market demand is given as Qd = 300 - 2P. Market supply is given as Qs = 2P + 100. In a perfectly competitive equilibrium, what will be price and quantity?

What is a table called that shows the relationship between the price of a good and the quantity demanded?

What is market demand?

Whenever a determinant of demand other than price changes, the demand curve shifts.

If the number of buyers in the housing market decreases, what will happen?

What happens in a competitive market?

Figure 4-2 -Refer to the Figure 4-2. What would happen at a price of $35?

You have decided to purchase a new Mustang convertible. A friend tells you that Ford will be offering a $3000 rebate on Mustangs starting next month. As a result of this information, what will happen to your demand curve for Mustangs?

Figure 4-6 -Refer to the Figure 4-6. What is the shift from D₁ To D called?

Holding all else constant, what will result from a higher price for ski-lift tickets?

What happens when there is a shortage in a market?

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts fell, the price of jelly (a complementary good) fell, more firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

If a good is "normal," what will an increase in income result in?

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?

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly (a complementary good) increased, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was bad for you?

Suppose there is an earthquake that destroys several seaside resorts. Which of the following would NOT occur as a direct result of this event?

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

What is the term for the behaviour of people as they interact with one another in markets?

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

Which of the following would NOT be a determinant of demand?

Market demand is given as Qd = 300 - 2P. Market supply is given as Qs = 2P + 100. In a perfectly competitive equilibrium, what will be price and quantity?

What is a table called that shows the relationship between the price of a good and the quantity demanded?

What is market demand?

Whenever a determinant of demand other than price changes, the demand curve shifts.

If the number of buyers in the housing market decreases, what will happen?

What happens in a competitive market?

Figure 4-2 -Refer to the Figure 4-2. What would happen at a price of $35?

You have decided to purchase a new Mustang convertible. A friend tells you that Ford will be offering a $3000 rebate on Mustangs starting next month. As a result of this information, what will happen to your demand curve for Mustangs?

Figure 4-6 -Refer to the Figure 4-6. What is the shift from D₁ To D called?

Holding all else constant, what will result from a higher price for ski-lift tickets?

What happens when there is a shortage in a market?

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts fell, the price of jelly (a complementary good) fell, more firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

If a good is "normal," what will an increase in income result in?

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?

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly (a complementary good) increased, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was bad for you?

Suppose there is an earthquake that destroys several seaside resorts. Which of the following would NOT occur as a direct result of this event?

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

What is the term for the behaviour of people as they interact with one another in markets?

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