Question 1

What type of market is a monopoly

Accepted Answer

A) with one seller 
B) with few sellers 
C) with one buyer 
D) with many buyers 
A) with one seller 
B) with few sellers 
C) with one buyer 
D) with many buyers A

Question 2

A movement along a supply curve is called a change in supply while a shift of the curve is called a change in quantity supplied.

Accepted Answer

A) True 
 B)False  False

Question 3

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 B

Question 4

Market demand is given as Qd =150 - 3P.Market supply is given as QS = 2P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market

Accepted Answer

A) price will be $20 and quantity will be 40 
B) price will be $30and quantity will be 60 
C) price will be $40 and quantity will be 60 
D) price will be $30 and quantity will be 20 
A) price will be $20 and quantity will be 40 
B) price will be $30and quantity will be 60 
C) price will be $40 and quantity will be 60 
D) price will be $30 and quantity will be 20

Question 5

Which of the following would be most likely to decrease the price of a new house

Accepted Answer

A) higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future 
B) higher wages for carpenters, lower wood prices, reductions in consumer incomes, lower apartment rents, decreases in population, and expectations of lower house prices in the future 
C) lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population, and expectations of higher house prices in the future 
D) lower wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population, and expectations of lower house prices in the future 
A) higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future 
B) higher wages for carpenters, lower wood prices, reductions in consumer incomes, lower apartment rents, decreases in population, and expectations of lower house prices in the future 
C) lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population, and expectations of higher house prices in the future 
D) lower wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population, and expectations of lower house prices in the future

Question 6

If Francis receives an increase in his pay,what would we expect

Accepted Answer

A) Francis's demand for each good he purchases to remain unchanged 
B) Francis's demand for normal goods to decrease 
C) Francis's demand for luxury goods to increase 
D) Francis's demand for inferior goods to increase 
A) Francis's demand for each good he purchases to remain unchanged 
B) Francis's demand for normal goods to decrease 
C) Francis's demand for luxury goods to increase 
D) Francis's demand for inferior goods to increase

Question 7

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto workers negotiate higher wages

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 8

What might be the reason when quantity demanded has increased at every price

Accepted Answer

A) The number of buyers in the market has decreased. 
B) Income has increased and this good is an inferior good. 
C) The consumer prefers another good more than this good. 
D) The price of a substitute good has increased. 
A) The number of buyers in the market has decreased. 
B) Income has increased and this good is an inferior good. 
C) The consumer prefers another good more than this good. 
D) The price of a substitute good has increased.

Question 9

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 10

Figure 4-4
  
-Refer to the Figure 4-4.At a price of $20,which of the following would happen

Accepted Answer

A) The price would decrease and the quantity would decrease. 
B) Both price and quantity would remain unchanged. 
C) The price would decrease and the quantity would increase. 
D) The price would increase and the quantity would decrease. 
A) The price would decrease and the quantity would decrease. 
B) Both price and quantity would remain unchanged. 
C) The price would decrease and the quantity would increase. 
D) The price would increase and the quantity would decrease.

Question 11

What relationship is shown by the supply schedule

Accepted Answer

A) between price and quantity supplied 
B) between price and quantity demanded 
C) between supply and quantity 
D) between profit and price 
A) between price and quantity supplied 
B) between price and quantity demanded 
C) between supply and quantity 
D) between profit and price

Question 12

Which chain of events is listed in the correct order

Accepted Answer

A) quantity supplied increases, price increases, demand increases 
B) price increases, demand increases, quantity supplied increases 
C) demand increases, price increases, quantity supplied increases 
D) demand increases, quantity supplied increases, price increases 
A) quantity supplied increases, price increases, demand increases 
B) price increases, demand increases, quantity supplied increases 
C) demand increases, price increases, quantity supplied increases 
D) demand increases, quantity supplied increases, price increases

Question 13

Suppose that the incomes of buyers in a particular market for a normal good increase 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 14

Figure 4-4
  
-Refer to the Figure 4-4.If the price is $25,what would the quantity demanded be

Accepted Answer

A) 400 
B) 500 
C) 600 
D) 800 
A) 400 
B) 500 
C) 600 
D) 800

Question 15

Suppose the market for standard one-family houses in a Canadian city is described by the equations Qd=(165+IM)-2.5P,and Qs=-60+10P,where Q represents the number of houses demanded or supplied per year (in 10s),P represents the price in 10 000s,and IM is the number of families immigrating into the city during the year,in 10s.
a) What is the equilibrium number of houses and the equilibrium price if there were no immigration (IM=0)
 Show this situation in a graph.
Now,suppose 350 families have immigrated within the year (IM=35).
b) Show this new situation on your graph.
c) What are the new equilibrium price and number of houses
d) How many of the "old" families (non-immigrant) have lost their ability to buy a house
e) By how much does the number of houses supplied increase
f) How many of the newcomers buy a house
 How could you change the demand equation if you knew that only about 10 percent of the immigrating families buy a house in the year of their arrival

Accepted Answer

a) The equilibrium price is given by the

Question 16

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 17

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 18

What is the unique point at which the supply and demand curves intersect

Accepted Answer

A) market unity 
B) an agreement 
C) cohesion 
D) equilibrium 
A) market unity 
B) an agreement 
C) cohesion 
D) equilibrium

Question 19

What would result from an increase in the number of scholarships issued for university education

Accepted Answer

A) an increase in the supply of education 
B) a decrease in the supply of education 
C) an increase in the demand for education 
D) a decrease in the demand for education 
A) an increase in the supply of education 
B) a decrease in the supply of education 
C) an increase in the demand for education 
D) a decrease in the demand for education

Question 20

Market demand is given as QD = 220 - 4P.Market supply is given as QS = 2P + 40.If price increases from $42 to $46,what is the price elasticity of demand

Accepted Answer

A) 0.3 
B) 0.4 
C) 4.0 
D) 5.9 
A) 0.3 
B) 0.4 
C) 4.0 
D) 5.9

Exam 4: The Market Forces of Supply and Demand

What type of market is a monopoly

A movement along a supply curve is called a change in supply while a shift of the curve is called a change in quantity supplied.

What is another term for equilibrium price

Market demand is given as Qd =150 - 3P.Market supply is given as QS = 2P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market

Which of the following would be most likely to decrease the price of a new house

If Francis receives an increase in his pay,what would we expect

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto workers negotiate higher wages

What might be the reason when quantity demanded has increased at every price

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

Figure 4-4 -Refer to the Figure 4-4.At a price of $20,which of the following would happen

What relationship is shown by the supply schedule

Which chain of events is listed in the correct order

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also an increase in input prices.What would we expect to occur in this market

Figure 4-4 -Refer to the Figure 4-4.If the price is $25,what would the quantity demanded be

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

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

What is the unique point at which the supply and demand curves intersect

What would result from an increase in the number of scholarships issued for university education

Market demand is given as QD = 220 - 4P.Market supply is given as QS = 2P + 40.If price increases from $42 to $46,what is the price elasticity of demand

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Elasticity and Its Application

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters

Market demand is given as Qd =150 - 3P.Market supply is given as Q_S= 2P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market

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

Market demand is given as Q_D= 220 - 4P.Market supply is given as Q_S= 2P + 40.If price increases from $42 to $46,what is the price elasticity of demand