Question 1

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Accepted Answer

A) True 
 B)False

Question 2

Market demand is given as QD = 300 - 6P. Market supply is given as QS = 4P. If price increases from $8 to $11, what is the price elasticity of demand?

Accepted Answer

A)  0.2 
B)  0.9 
C)  1.1 
D)  1.2 
A)  0.2 
B)  0.9 
C)  1.1 
D)  1.2

Question 3

What do demand and supply determine in a perfectly competitive market?

Accepted Answer

A)  income 
B)  expectations 
C)  price 
D)  costs of production 
A)  income 
B)  expectations 
C)  price 
D)  costs of production

Question 4

Table 4-2
  
-Refer to the Table 4-2. What is the space that would represent a decrease in equilibrium price and an indeterminate change in equilibrium quantity?

Accepted Answer

A)  space A 
B)  space B 
C)  space C 
D)  space D 
A)  space A 
B)  space B 
C)  space C 
D)  space D

Question 5

Market demand is given as Qd = 300 - 0.5P. Market supply is given as Qs = 50 + 2P. What would result if the market price were $50?

Accepted Answer

A)  a shortage of 100 
B)  a surplus of 100 
C)  a surplus of 125 
D)  a shortage of 125 
A)  a shortage of 100 
B)  a surplus of 100 
C)  a surplus of 125 
D)  a shortage of 125

Question 6

What is the market demand?

Accepted Answer

A)  the sum of all individual demands 
B)  the demand for every product in an industry 
C)  the average quantity demanded at each price 
D)  the quantity demanded that exceeds supply 
A)  the sum of all individual demands 
B)  the demand for every product in an industry 
C)  the average quantity demanded at each price 
D)  the quantity demanded that exceeds supply

Question 7

Figure 4-8
  
-Refer to the Figure 4-8. The graph shows the demand for cigarettes. Which most likely happened?

Accepted Answer

A)  The price of marijuana rose. 
B)  Mandatory health warnings were placed on cigarette packages. 
C)  Several foreign countries banned Canadian cigarettes in their countries. 
D)  A tax was placed on cigarettes. 
A)  The price of marijuana rose. 
B)  Mandatory health warnings were placed on cigarette packages. 
C)  Several foreign countries banned Canadian cigarettes in their countries. 
D)  A tax was placed on cigarettes.

Question 8

Wheat is the main input in the production of flour. All else equal, if the price of wheat decreases, what would we expect?

Accepted Answer

A)  the supply of flour to decrease 
B)  the demand for flour to decrease 
C)  the supply of flour to increase 
D)  the demand for flour to increase 
A)  the supply of flour to decrease 
B)  the demand for flour to decrease 
C)  the supply of flour to increase 
D)  the demand for flour to increase

Question 9

Market demand is given as QD = 140 - 5P. Market supply is given as QS = 2P. If price increases from $6 to $8, what is the price elasticity of demand?

Accepted Answer

A)  0.3 
B)  0.9 
C)  1.0 
D)  2.0 
A)  0.3 
B)  0.9 
C)  1.0 
D)  2.0

Question 10

Kingston is a small university city in Ontario. What happens to the market demand curve for fast food in Kingston at the end of August each year?

Accepted Answer

A)  It shifts right. 
B)  It shifts left. 
C)  It remains constant, but moves down the curve. 
D)  It remains constant, but moves up the curve. 
A)  It shifts right. 
B)  It shifts left. 
C)  It remains constant, but moves down the curve. 
D)  It remains constant, but moves up the curve.

Question 11

What happens if there is a shortage of a good at the current price?

Accepted Answer

A)  Sellers are producing more than buyers wish to buy. 
B)  The market must be in equilibrium. 
C)  The price is below the equilibrium price. 
D)  Quantity demanded equals quantity supplied. 
A)  Sellers are producing more than buyers wish to buy. 
B)  The market must be in equilibrium. 
C)  The price is below the equilibrium price. 
D)  Quantity demanded equals quantity supplied.

Question 12

It is not possible for demand and supply to shift at the same time.

Accepted Answer

A) True 
 B)False

Question 13

You lose your job and, as a result, you buy fewer mystery books. What does this show that you consider mystery books to be?

Accepted Answer

A)  a normal good 
B)  an inferior good 
C)  a luxury good 
D)  a complementary good 
A)  a normal good 
B)  an inferior good 
C)  a luxury good 
D)  a complementary good

Question 14

Market demand is given as QD = 300- 3P. Market supply is given as QS = 2P + 100. If price increases from $50 to $60, what is the price elasticity of demand?

Accepted Answer

A)  0.6 
B)  0.8 
C)  1.2 
D)  2.1 
A)  0.6 
B)  0.8 
C)  1.2 
D)  2.1

Question 15

What will happen if the price of a good is low?

Accepted Answer

A)  Firms would increase profit by increasing output. 
B)  Quantity supplied could be zero. 
C)  The supply curve for the good will shift to the left. 
D)  Firms should raise the price of the product. 
A)  Firms would increase profit by increasing output. 
B)  Quantity supplied could be zero. 
C)  The supply curve for the good will shift to the left. 
D)  Firms should raise the price of the product.

Question 16

Figure 4-7
  
-Refer to the Figure 4-7. What would cause the movement from point A to point B on the graph?

Accepted Answer

A)  an increase in price 
B)  a decrease in price 
C)  a decrease in the price of a complement good 
D)  an increase in income 
A)  an increase in price 
B)  a decrease in price 
C)  a decrease in the price of a complement good 
D)  an increase in income

Question 17

What will happen to the demand curve for ice cream in a very hot summer in Guelph?

Accepted Answer

A)  It will shift to the left. 
B)  It will shift to the right. 
C)  It will remain stable but we would move down the curve. 
D)  It will remain stable but we would move up the curve. 
A)  It will shift to the left. 
B)  It will shift to the right. 
C)  It will remain stable but we would move down the curve. 
D)  It will remain stable but we would move up the curve.

Question 18

What impact would a higher price for batteries tend to have?

Accepted Answer

A)  increase the demand for flashlights 
B)  increase the demand for electricity 
C)  decrease the demand for electricity 
D)  increase the demand for batteries 
A)  increase the demand for flashlights 
B)  increase the demand for electricity 
C)  decrease the demand for electricity 
D)  increase the demand for batteries

Question 19

Why do markets move toward equilibrium of supply and demand?

Accepted Answer

A)  because of the actions of buyers and sellers 
B)  because of government regulations placed on market participants 
C)  because of increased competition among sellers 
D)  because of buyers' ability to affect market decisions 
A)  because of the actions of buyers and sellers 
B)  because of government regulations placed on market participants 
C)  because of increased competition among sellers 
D)  because of buyers' ability to affect market decisions

Question 20

Suppose that the number of buyers in a market decreases and a technological advancement occurs. What would we expect to happen in the 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.

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Market demand is given as QD = 300 - 6P. Market supply is given as QS = 4P. If price increases from $8 to $11, what is the price elasticity of demand?

What do demand and supply determine in a perfectly competitive market?

Table 4-2 -Refer to the Table 4-2. What is the space that would represent a decrease in equilibrium price and an indeterminate change in equilibrium quantity?

Market demand is given as Qd = 300 - 0.5P. Market supply is given as Qs = 50 + 2P. What would result if the market price were $50?

What is the market demand?

Figure 4-8 -Refer to the Figure 4-8. The graph shows the demand for cigarettes. Which most likely happened?

Wheat is the main input in the production of flour. All else equal, if the price of wheat decreases, what would we expect?

Market demand is given as QD = 140 - 5P. Market supply is given as QS = 2P. If price increases from $6 to $8, what is the price elasticity of demand?

Kingston is a small university city in Ontario. What happens to the market demand curve for fast food in Kingston at the end of August each year?

What happens if there is a shortage of a good at the current price?

It is not possible for demand and supply to shift at the same time.

You lose your job and, as a result, you buy fewer mystery books. What does this show that you consider mystery books to be?

Market demand is given as QD = 300- 3P. Market supply is given as QS = 2P + 100. If price increases from $50 to $60, what is the price elasticity of demand?

What will happen if the price of a good is low?

Figure 4-7 -Refer to the Figure 4-7. What would cause the movement from point A to point B on the graph?

What will happen to the demand curve for ice cream in a very hot summer in Guelph?

What impact would a higher price for batteries tend to have?

Why do markets move toward equilibrium of supply and demand?

Suppose that the number of buyers in a market decreases and a technological advancement occurs. What would we expect to happen in the market?

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

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Market demand is given as QD = 300 - 6P. Market supply is given as QS = 4P. If price increases from $8 to $11, what is the price elasticity of demand?

What do demand and supply determine in a perfectly competitive market?

Table 4-2 -Refer to the Table 4-2. What is the space that would represent a decrease in equilibrium price and an indeterminate change in equilibrium quantity?

Market demand is given as Qd = 300 - 0.5P. Market supply is given as Qs = 50 + 2P. What would result if the market price were $50?

What is the market demand?

Figure 4-8 -Refer to the Figure 4-8. The graph shows the demand for cigarettes. Which most likely happened?

Wheat is the main input in the production of flour. All else equal, if the price of wheat decreases, what would we expect?

Market demand is given as QD = 140 - 5P. Market supply is given as QS = 2P. If price increases from $6 to $8, what is the price elasticity of demand?

Kingston is a small university city in Ontario. What happens to the market demand curve for fast food in Kingston at the end of August each year?

What happens if there is a shortage of a good at the current price?

It is not possible for demand and supply to shift at the same time.

You lose your job and, as a result, you buy fewer mystery books. What does this show that you consider mystery books to be?

Market demand is given as QD = 300- 3P. Market supply is given as QS = 2P + 100. If price increases from $50 to $60, what is the price elasticity of demand?

What will happen if the price of a good is low?

Figure 4-7 -Refer to the Figure 4-7. What would cause the movement from point A to point B on the graph?

What will happen to the demand curve for ice cream in a very hot summer in Guelph?

What impact would a higher price for batteries tend to have?

Why do markets move toward equilibrium of supply and demand?

Suppose that the number of buyers in a market decreases and a technological advancement occurs. What would we expect to happen in the market?

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