Question 1

Market demand is given as Qd = 200 - 6P. Market supply is given as Qs = 4P. What would result if the market price were $30?

Accepted Answer

A)  a shortage of 100 
B)  a surplus of 100 
C)  a surplus of 160 
D)  a shortage of 160 
A)  a shortage of 100 
B)  a surplus of 100 
C)  a surplus of 160 
D)  a shortage of 160

Question 2

For teens, what does a 10 percent increase in the price of cigarettes lead to?

Accepted Answer

A)  a 6 percent drop in teenage smoking 
B)  a 12 percent drop in teenage smoking 
C)  a 18 percent drop in teenage smoking 
D)  a 24 percent drop in teenage smoking 
A)  a 6 percent drop in teenage smoking 
B)  a 12 percent drop in teenage smoking 
C)  a 18 percent drop in teenage smoking 
D)  a 24 percent drop in teenage smoking

Question 3

Recent pine beetle infestations that are destroying trees in the western provinces are expected to cause the price of lumber to rise in the next six months. As a result, what can we expect to happen to the supply of lumber?

Accepted Answer

A)  It will fall in six months, but not now. 
B)  It will increase in six months when the price goes up. 
C)  It will fall now. 
D)  It will increase now to meet as much demand as possible. 
A)  It will fall in six months, but not now. 
B)  It will increase in six months when the price goes up. 
C)  It will fall now. 
D)  It will increase now to meet as much demand as possible.

Question 4

What will happen to the equilibrium price and quantity of gasoline powered lawnmowers if the prices of battery powered lawnmowers goes down and, at the same time, firms switch from producing gasoline powered lawnmowers to producing battery powered lawnmowers?

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 5

Market demand is given as Qd =150 - P. Market supply is given as Qs = 4P. What would result if the market price were $40?

Accepted Answer

A)  a shortage of 110 
B)  a surplus of 110 
C)  a surplus of 50 
D)  a shortage of 50 
A)  a shortage of 110 
B)  a surplus of 110 
C)  a surplus of 50 
D)  a shortage of 50

Question 6

Other things equal, what happens when the price of a good rises?

Accepted Answer

A)  The quantity demanded of the good increases. 
B)  The supply increases. 
C)  The quantity supplied of the good rises. 
D)  The demand curve shifts to the left. 
A)  The quantity demanded of the good increases. 
B)  The supply increases. 
C)  The quantity supplied of the good rises. 
D)  The demand curve shifts to the left.

Question 7

What is a market?

Accepted Answer

A)  a group of demanders and suppliers of a particular good or service 
B)  a group of people with common desires 
C)  a place where only sellers meet 
D)  a place where only buyers come together 
A)  a group of demanders and suppliers of a particular good or service 
B)  a group of people with common desires 
C)  a place where only sellers meet 
D)  a place where only buyers come together

Question 8

What will happen to the equilibrium price of new textbooks if more students attend university, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

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 9

If the price of a substitute to good X increases, what will happen?

Accepted Answer

A)  Demand for good X will decrease. 
B)  Market price of good X will decrease. 
C)  Demand for good X will increase. 
D)  Quantity demanded for good X will increase. 
A)  Demand for good X will decrease. 
B)  Market price of good X will decrease. 
C)  Demand for good X will increase. 
D)  Quantity demanded for good X will increase.

Question 10

Market demand is given as Qd = 300 - 0.5P. Market supply is given as Qs = 50 + 2P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Accepted Answer

A)  price will be $200 and quantity will be 150 
B)  price will be $35 and quantity will be 70 
C)  price will be $100 and quantity will be 250 
D)  price will be $150 and quantity will be 300 
A)  price will be $200 and quantity will be 150 
B)  price will be $35 and quantity will be 70 
C)  price will be $100 and quantity will be 250 
D)  price will be $150 and quantity will be 300

Question 11

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 12

How do the variables price and quantity demanded relate to each other?

Accepted Answer

A)  Price and quantity demanded are independent of each other. 
B)  Price is the dependent variable and quantity demanded is the independent variable. 
C)  Price is the independent variable and quantity demanded is the dependent variable. 
D)  Price and quantity demanded are both dependent variables, since both depend on the actions of buyers and sellers. 
A)  Price and quantity demanded are independent of each other. 
B)  Price is the dependent variable and quantity demanded is the independent variable. 
C)  Price is the independent variable and quantity demanded is the dependent variable. 
D)  Price and quantity demanded are both dependent variables, since both depend on the actions of buyers and sellers.

Question 13

What will a technological advancement do?

Accepted Answer

A)  shift the supply curve to the right 
B)  shift the demand curve to the left 
C)  shift the demand curve to the right 
D)  shift the supply curve to the left 
A)  shift the supply curve to the right 
B)  shift the demand curve to the left 
C)  shift the demand curve to the right 
D)  shift the supply curve to the left

Question 14

If the supply of a product decreases, what would we expect?

Accepted Answer

A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease 
A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease

Question 15

What is another term for equilibrium price?

Accepted Answer

A)  balancing price 
B)  market-clearing price 
C)  cooperative price 
D)  reservation price 
A)  balancing price 
B)  market-clearing price 
C)  cooperative price 
D)  reservation price

Question 16

A supply curve slopes upward because, all else equal, a higher price means a greater quantity supplied.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Market demand is given as Qd = 80 - 2P. Market supply is given as Qs = 2P. What would result if the market price were $10?

Accepted Answer

A)  a shortage of 40 
B)  a surplus of 40 
C)  a surplus of 20 
D)  a shortage of 20 
A)  a shortage of 40 
B)  a surplus of 40 
C)  a surplus of 20 
D)  a shortage of 20

Question 19

Smart phones are normal goods. What will happen to the equilibrium price and quantity of smart phones if phone plans become more expensive, fewer firms produce smart phones, and smart phone users experience a decrease in income?

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 20

Market demand is given as Qd = 80 - P. Market supply is given as Qs = 3P. What would result if the market price were $10?

Accepted Answer

A)  a shortage of 20 
B)  a surplus of 20 
C)  a surplus of 40 
D)  a shortage of 40 
A)  a shortage of 20 
B)  a surplus of 20 
C)  a surplus of 40 
D)  a shortage of 40

Market demand is given as Qd = 200 - 6P. Market supply is given as Qs = 4P. What would result if the market price were $30?

For teens, what does a 10 percent increase in the price of cigarettes lead to?

Recent pine beetle infestations that are destroying trees in the western provinces are expected to cause the price of lumber to rise in the next six months. As a result, what can we expect to happen to the supply of lumber?

What will happen to the equilibrium price and quantity of gasoline powered lawnmowers if the prices of battery powered lawnmowers goes down and, at the same time, firms switch from producing gasoline powered lawnmowers to producing battery powered lawnmowers?

Market demand is given as Qd =150 - P. Market supply is given as Qs = 4P. What would result if the market price were $40?

Other things equal, what happens when the price of a good rises?

What is a market?

What will happen to the equilibrium price of new textbooks if more students attend university, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

If the price of a substitute to good X increases, what will happen?

Market demand is given as Qd = 300 - 0.5P. Market supply is given as Qs = 50 + 2P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

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

How do the variables price and quantity demanded relate to each other?

What will a technological advancement do?

If the supply of a product decreases, what would we expect?

What is another term for equilibrium price?

A supply curve slopes upward because, all else equal, a higher price means a greater quantity supplied.

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 = 80 - 2P. Market supply is given as Qs = 2P. What would result if the market price were $10?

Smart phones are normal goods. What will happen to the equilibrium price and quantity of smart phones if phone plans become more expensive, fewer firms produce smart phones, and smart phone users experience a decrease in income?

Market demand is given as Qd = 80 - P. Market supply is given as Qs = 3P. What would result if the market price were $10?

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 - 6P. Market supply is given as Qs = 4P. What would result if the market price were $30?

For teens, what does a 10 percent increase in the price of cigarettes lead to?

Recent pine beetle infestations that are destroying trees in the western provinces are expected to cause the price of lumber to rise in the next six months. As a result, what can we expect to happen to the supply of lumber?

What will happen to the equilibrium price and quantity of gasoline powered lawnmowers if the prices of battery powered lawnmowers goes down and, at the same time, firms switch from producing gasoline powered lawnmowers to producing battery powered lawnmowers?

Market demand is given as Qd =150 - P. Market supply is given as Qs = 4P. What would result if the market price were $40?

Other things equal, what happens when the price of a good rises?

What is a market?

What will happen to the equilibrium price of new textbooks if more students attend university, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

If the price of a substitute to good X increases, what will happen?

Market demand is given as Qd = 300 - 0.5P. Market supply is given as Qs = 50 + 2P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

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

How do the variables price and quantity demanded relate to each other?

What will a technological advancement do?

If the supply of a product decreases, what would we expect?

What is another term for equilibrium price?

A supply curve slopes upward because, all else equal, a higher price means a greater quantity supplied.

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 = 80 - 2P. Market supply is given as Qs = 2P. What would result if the market price were $10?

Smart phones are normal goods. What will happen to the equilibrium price and quantity of smart phones if phone plans become more expensive, fewer firms produce smart phones, and smart phone users experience a decrease in income?

Market demand is given as Qd = 80 - P. Market supply is given as Qs = 3P. What would result if the market price were $10?

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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