Question 1

Suppose that a decrease in the price of X results in less of good Y sold. What are X and Y called?

Accepted Answer

A)  complementary goods 
B)  normal goods 
C)  inferior goods 
D)  substitute goods 
A)  complementary goods 
B)  normal goods 
C)  inferior goods 
D)  substitute goods

Question 2

If a car manufacturer purchases new labour-saving technology for its assembly line, what would we NOT expect?

Accepted Answer

A)  less labour to be used 
B)  the supply of cars produced to increase 
C)  costs to the firm to fall 
D)  the price of cars to be increased by the firm 
A)  less labour to be used 
B)  the supply of cars produced to increase 
C)  costs to the firm to fall 
D)  the price of cars to be increased by the firm

Question 3

What are the roles of buyers and sellers in a perfectly competitive market?

Accepted Answer

A)  Buyers determine supply and sellers determine demand. 
B)  Buyers determine demand and sellers determine supply. 
C)  Buyers and sellers as one group determine supply. 
D)  Buyers and sellers as one group determine demand. 
A)  Buyers determine supply and sellers determine demand. 
B)  Buyers determine demand and sellers determine supply. 
C)  Buyers and sellers as one group determine supply. 
D)  Buyers and sellers as one group determine demand.

Question 4

Market demand is given as QD = 150 - P. Market supply is given as QS = 4P. If price increases from $30 to $40, what is the price elasticity of demand?

Accepted Answer

A)  0.3 
B)  0.7 
C)  1.5 
D)  2.0 
A)  0.3 
B)  0.7 
C)  1.5 
D)  2.0

Question 5

Which of the following best describes a perfectly competitive market?

Accepted Answer

A)  A seller who charges more than the going price can increase her profit. 
B)  If a seller charges more than the going price, buyers will go elsewhere. 
C)  A seller often charges less than the going price to increase sales and profit. 
D)  A buyer can influence the price of the product. 
A)  A seller who charges more than the going price can increase her profit. 
B)  If a seller charges more than the going price, buyers will go elsewhere. 
C)  A seller often charges less than the going price to increase sales and profit. 
D)  A buyer can influence the price of the product.

Question 6

Figure 4-3
  
-Refer to the Figure 4-3. If price in this market is currently $8, what would happen?

Accepted Answer

A)  Quantity supplied would be 40 and quantity demanded would be 60. 
B)  Quantity supplied would be 60 and quantity demanded would be 40. 
C)  Quantity supplied would be 50 and quantity demanded would be 50. 
D)  Quantity supplied would be 70 and quantity demanded would be 30. 
A)  Quantity supplied would be 40 and quantity demanded would be 60. 
B)  Quantity supplied would be 60 and quantity demanded would be 40. 
C)  Quantity supplied would be 50 and quantity demanded would be 50. 
D)  Quantity supplied would be 70 and quantity demanded would be 30.

Question 7

Quantity demanded is equal to quantity supplied, at the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 8

How is a market supply curve constructed?

Accepted Answer

A)  by vertically summing individual supply curves 
B)  by horizontally summing individual supply curves 
C)  by finding the average quantity supplied of the market's individual supply curves 
D)  by summing a consumer's demands for all goods 
A)  by vertically summing individual supply curves 
B)  by horizontally summing individual supply curves 
C)  by finding the average quantity supplied of the market's individual supply curves 
D)  by summing a consumer's demands for all goods

Question 9

What would an early frost in the vineyards of the Okanagan Valley cause?

Accepted Answer

A)  an increase in the demand for wine, increasing price 
B)  an increase in the supply of wine, decreasing price 
C)  a decrease in the demand for wine, decreasing price 
D)  a decrease in the supply of wine, increasing price 
A)  an increase in the demand for wine, increasing price 
B)  an increase in the supply of wine, decreasing price 
C)  a decrease in the demand for wine, decreasing price 
D)  a decrease in the supply of wine, increasing price

Question 10

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

Accepted Answer

A)  A shortage would exist and the price would tend to fall. 
B)  A shortage would exist and the price would tend to rise. 
C)  A surplus would exist and the price would tend to rise. 
D)  A surplus would exist and the price would tend to fall. 
A)  A shortage would exist and the price would tend to fall. 
B)  A shortage would exist and the price would tend to rise. 
C)  A surplus would exist and the price would tend to rise. 
D)  A surplus would exist and the price would tend to fall.

Question 11

Which of the following would be an example of a monopoly?

Accepted Answer

A)  a bakery in a large city 
B)  local cement companies 
C)  a local electricity company 
D)  a potato farmer 
A)  a bakery in a large city 
B)  local cement companies 
C)  a local electricity company 
D)  a potato farmer

Question 12

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

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 13

Refer to the following:
A. What is the difference between a "change in supply" and a "change in quantity supplied"? (Graph your answer).
B. For each of the following changes, determine whether there will be a change in quantity supplied or a change in supply.
a. a change in the resource cost
b. a change in producer expectations
c. a change in price
d. a change in technology
e. a change in the number of sellers

Accepted Answer

A. A change in supply refers to a shift

Question 14

Ryan tells you that he thinks the price of potato chips, his favourite food, will decrease in the near future. How will he probably respond?

Accepted Answer

A)  by decreasing his current demand for chips 
B)  by not changing his current demand for chips 
C)  by increasing his current demand for chips 
D)  by currently refusing to buy any more chips 
A)  by decreasing his current demand for chips 
B)  by not changing his current demand for chips 
C)  by increasing his current demand for chips 
D)  by currently refusing to buy any more chips

Question 15

If a study by the CMA found that brown sugar caused weight gain while white sugar caused weight loss, what would we see?

Accepted Answer

A)  an increase in demand for brown sugar and a decrease in demand for white sugar 
B)  no change in either demand because weight loss is not a nonprice determinant of demand 
C)  an increase in demand for white sugar, and a decrease in the demand for brown sugar 
D)  a decrease in the demand for white sugar, but no change in the demand for brown sugar 
A)  an increase in demand for brown sugar and a decrease in demand for white sugar 
B)  no change in either demand because weight loss is not a nonprice determinant of demand 
C)  an increase in demand for white sugar, and a decrease in the demand for brown sugar 
D)  a decrease in the demand for white sugar, but no change in the demand for brown sugar

Question 16

On what basis is a good considered either a normal good or an inferior good?

Accepted Answer

A)  the quality of the good 
B)  the price of the good 
C)  personal preference toward the good 
D)  the amount of a person's income 
A)  the quality of the good 
B)  the price of the good 
C)  personal preference toward the good 
D)  the amount of a person's income

Question 17

Market demand is given as QD = 100 - P. Market supply is given as QS = 4P. If price increases from $40 to $44, what is the price elasticity of demand?

Accepted Answer

A)  0.2 
B)  0.7 
C)  1.7 
D)  2.0 
A)  0.2 
B)  0.7 
C)  1.7 
D)  2.0

Question 18

Refer to the following:
A. What is the difference between a "change in demand" and a "change in quantity demanded"? (Graph your answer.)
B. For each of the following changes, determine whether there will be a movement along the demand curve or a shift in the demand curve.
a. a change in the price of a related good
b. a change in tastes
c. a change in the number of buyers
d. a change in price
e. a change in expectations
f. a change in income

Accepted Answer

A. A change in demand refers to a shift

Question 19

Price, which is determined by all buyers and sellers as they interact in the marketplace, allocates the economy's scarce resources.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following reflects the downward-sloping demand curve?

Accepted Answer

A)  Price is positively related to quantity supplied. 
B)  There is an inverse relationship between price and quantity demanded. 
C)  There is a direct relationship between price and quantity demanded. 
D)  When the price falls, buyers willingly buy less. 
A)  Price is positively related to quantity supplied. 
B)  There is an inverse relationship between price and quantity demanded. 
C)  There is a direct relationship between price and quantity demanded. 
D)  When the price falls, buyers willingly buy less.

Suppose that a decrease in the price of X results in less of good Y sold. What are X and Y called?

If a car manufacturer purchases new labour-saving technology for its assembly line, what would we NOT expect?

What are the roles of buyers and sellers in a perfectly competitive market?

Market demand is given as QD = 150 - P. Market supply is given as QS = 4P. If price increases from $30 to $40, what is the price elasticity of demand?

Which of the following best describes a perfectly competitive market?

Figure 4-3 -Refer to the Figure 4-3. If price in this market is currently $8, what would happen?

Quantity demanded is equal to quantity supplied, at the equilibrium price.

How is a market supply curve constructed?

What would an early frost in the vineyards of the Okanagan Valley cause?

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

Which of the following would be an example of a monopoly?

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

Ryan tells you that he thinks the price of potato chips, his favourite food, will decrease in the near future. How will he probably respond?

If a study by the CMA found that brown sugar caused weight gain while white sugar caused weight loss, what would we see?

On what basis is a good considered either a normal good or an inferior good?

Market demand is given as QD = 100 - P. Market supply is given as QS = 4P. If price increases from $40 to $44, what is the price elasticity of demand?

Price, which is determined by all buyers and sellers as they interact in the marketplace, allocates the economy's scarce resources.

Which of the following reflects the downward-sloping demand curve?

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

Suppose that a decrease in the price of X results in less of good Y sold. What are X and Y called?

If a car manufacturer purchases new labour-saving technology for its assembly line, what would we NOT expect?

What are the roles of buyers and sellers in a perfectly competitive market?

Market demand is given as QD = 150 - P. Market supply is given as QS = 4P. If price increases from $30 to $40, what is the price elasticity of demand?

Which of the following best describes a perfectly competitive market?

Figure 4-3 -Refer to the Figure 4-3. If price in this market is currently $8, what would happen?

Quantity demanded is equal to quantity supplied, at the equilibrium price.

How is a market supply curve constructed?

What would an early frost in the vineyards of the Okanagan Valley cause?

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

Which of the following would be an example of a monopoly?

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

Ryan tells you that he thinks the price of potato chips, his favourite food, will decrease in the near future. How will he probably respond?

If a study by the CMA found that brown sugar caused weight gain while white sugar caused weight loss, what would we see?

On what basis is a good considered either a normal good or an inferior good?

Market demand is given as QD = 100 - P. Market supply is given as QS = 4P. If price increases from $40 to $44, what is the price elasticity of demand?

Price, which is determined by all buyers and sellers as they interact in the marketplace, allocates the economy's scarce resources.

Which of the following reflects the downward-sloping demand curve?

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