Question 1

Lower labour costs

Accepted Answer

A) increase the supply of Tim's baked goods and lower the equilibrium price. 
B) increase the supply of Tim's baked goods, increase the demand for Tim's baked goods and increase the equilibrium quantity. 
C) lower the equilibrium price of Tim's baked goods but do not change the equilibrium quantity. 
D) increase the demand for Tim's baked goods and raise the price. 
E) increase the quantity supplied of Tim's baked goods. 
A) increase the supply of Tim's baked goods and lower the equilibrium price. 
B) increase the supply of Tim's baked goods, increase the demand for Tim's baked goods and increase the equilibrium quantity. 
C) lower the equilibrium price of Tim's baked goods but do not change the equilibrium quantity. 
D) increase the demand for Tim's baked goods and raise the price. 
E) increase the quantity supplied of Tim's baked goods.

Question 2

When the demand for good A increases,

Accepted Answer

A) the equilibrium price and equilibrium quantity will increase. 
B) the equilibrium price will rise, but the equilibrium quantity will decrease. 
C) the equilibrium price and equilibrium quantity will decrease. 
D) the equilibrium price will decrease, but the equilibrium quantity will increase. 
E) a surplus will result. 
A) the equilibrium price and equilibrium quantity will increase. 
B) the equilibrium price will rise, but the equilibrium quantity will decrease. 
C) the equilibrium price and equilibrium quantity will decrease. 
D) the equilibrium price will decrease, but the equilibrium quantity will increase. 
E) a surplus will result.

Question 3

Table 3.4.1
   
Use the table below to answer the following questions.
-Refer to Table 3.4.1. If the price is $7, then the surplus is

Accepted Answer

A) 360 units. 
B) 400 units. 
C) 160 units. 
D) zero units. 
E) 290 units. 
A) 360 units. 
B) 400 units. 
C) 160 units. 
D) zero units. 
E) 290 units.

Question 4

Which of the following will definitely result in an increase in the equilibrium price?

Accepted Answer

A) an increase in both demand and supply 
B) a decrease in both demand and supply 
C) an increase in demand combined with a decrease in supply 
D) a decrease in demand combined with an increase in supply 
E) an increase in supply combined with a decrease in demand 
A) an increase in both demand and supply 
B) a decrease in both demand and supply 
C) an increase in demand combined with a decrease in supply 
D) a decrease in demand combined with an increase in supply 
E) an increase in supply combined with a decrease in demand

Question 5

Consider the market for cell phones. Suppose the price of a cell phone falls. Explain the effect of this event on the quantity of cell phones demanded and on the demand for cell phones.

Accepted Answer

A) The quantity of cell phones demanded is unchanged and the demand for cell phones increases. 
B) The quantity of cell phones demanded decreases and the demand for cell phones is unchanged. 
C) The quantity of cell phones demanded increases and the demand for cell phones is unchanged. 
D) The quantity of cell phones demanded increases and the demand for cell phones also increases. 
E) The quantity of cell phones demanded is unchanged and the demand for cell phones decreases. 
A) The quantity of cell phones demanded is unchanged and the demand for cell phones increases. 
B) The quantity of cell phones demanded decreases and the demand for cell phones is unchanged. 
C) The quantity of cell phones demanded increases and the demand for cell phones is unchanged. 
D) The quantity of cell phones demanded increases and the demand for cell phones also increases. 
E) The quantity of cell phones demanded is unchanged and the demand for cell phones decreases.

Question 6

Table 3.5.1
The Market for Car-Seat Heaters
   
Use the table below to answer the following questions.
-Refer to Table 3.5.1. If the price is set at $80, there will be a

Accepted Answer

A) shortage of 200 units and price will rise. 
B) shortage of 200 units and demand will fall. 
C) surplus of 200 units and demand will rise. 
D) surplus of 200 units and supply will fall. 
E) surplus of 200 units and price will fall. 
A) shortage of 200 units and price will rise. 
B) shortage of 200 units and demand will fall. 
C) surplus of 200 units and demand will rise. 
D) surplus of 200 units and supply will fall. 
E) surplus of 200 units and price will fall.

Question 7

If we observe a decrease in the equilibrium quantity of good A, we know that

Accepted Answer

A) either the demand for A has increased or the supply of A has decreased or both. 
B) either the demand for A has increased or the supply of A has increased or both. 
C) either the demand for A has decreased or the supply of A has increased or both. 
D) either the demand for A has decreased or the supply of A has decreased or both. 
E) the price of A has fallen. 
A) either the demand for A has increased or the supply of A has decreased or both. 
B) either the demand for A has increased or the supply of A has increased or both. 
C) either the demand for A has decreased or the supply of A has increased or both. 
D) either the demand for A has decreased or the supply of A has decreased or both. 
E) the price of A has fallen.

Question 8

Some sales managers are talking shop. Which one of the following quotations refers to a leftward shift of the demand curve?

Accepted Answer

A) "Since our competitors raised their prices, our sales have doubled." 
B) "It has been an unusually mild winter; our sales of wool scarves are down from last year." 
C) "We decided to cut our prices, and the increase in our sales has been remarkable." 
D) "The Green movement has sparked an increase in our sales of biodegradable products." 
E) "More firms are producing biodegradable products." 
A) "Since our competitors raised their prices, our sales have doubled." 
B) "It has been an unusually mild winter; our sales of wool scarves are down from last year." 
C) "We decided to cut our prices, and the increase in our sales has been remarkable." 
D) "The Green movement has sparked an increase in our sales of biodegradable products." 
E) "More firms are producing biodegradable products."

Question 9

If the price is above the equilibrium price, then

Accepted Answer

A) none of the good will be sold. 
B) the price must rise further to reach the new market equilibrium. 
C) a surplus exists. 
D) a shortage exists. 
E) price will not change; producers will cut back production until the market is in equilibrium. 
A) none of the good will be sold. 
B) the price must rise further to reach the new market equilibrium. 
C) a surplus exists. 
D) a shortage exists. 
E) price will not change; producers will cut back production until the market is in equilibrium.

Question 10

If A and B are complements in production and the price of A falls, the supply of B

Accepted Answer

A) increases, and the price of B rises. 
B) increases, and the price of B falls. 
C) decreases, and the price of B falls. 
D) decreases, and the price of B rises. 
E) does not change. 
A) increases, and the price of B rises. 
B) increases, and the price of B falls. 
C) decreases, and the price of B falls. 
D) decreases, and the price of B rises. 
E) does not change.

Question 11

Figure 3.4.1
Use the figure below to answer the following questions.
  
-At price P1 in Figure 3.4.1,

Accepted Answer

A) producers can sell all they plan to sell. 
B) consumers can buy all they want. 
C) producers are unwilling to sell any goods. 
D) a surplus exists. 
E) both sides of the market are able to carry out their desired transactions. 
A) producers can sell all they plan to sell. 
B) consumers can buy all they want. 
C) producers are unwilling to sell any goods. 
D) a surplus exists. 
E) both sides of the market are able to carry out their desired transactions.

Question 12

If Canadians suddenly develop a strong urge to escape the cold winter by taking vacations in Hawaii, the

Accepted Answer

A) price of a vacation in Hawaii rises and the quantity demanded of Hawaiian vacations decreases. 
B) price of a skiing vacation in the mountains rises. 
C) initial result of the change is a surplus of vacations in Hawaii, leading to a price rise. 
D) price of airline tickets falls as ticket agents make deals in response to this change. 
E) price of luggage will rise, because luggage and vacations are complements. 
A) price of a vacation in Hawaii rises and the quantity demanded of Hawaiian vacations decreases. 
B) price of a skiing vacation in the mountains rises. 
C) initial result of the change is a surplus of vacations in Hawaii, leading to a price rise. 
D) price of airline tickets falls as ticket agents make deals in response to this change. 
E) price of luggage will rise, because luggage and vacations are complements.

Question 13

A shortage is the amount by which quantity

Accepted Answer

A) demanded exceeds quantity supplied. 
B) supplied exceeds quantity demanded. 
C) demanded increases when the price rises. 
D) demanded exceeds the equilibrium quantity. 
E) supplied exceeds the equilibrium quantity. 
A) demanded exceeds quantity supplied. 
B) supplied exceeds quantity demanded. 
C) demanded increases when the price rises. 
D) demanded exceeds the equilibrium quantity. 
E) supplied exceeds the equilibrium quantity.

Question 14

Suppose we observe a fall in the price of good A and a decrease in the quantity of good A bought and sold. Which one of the following is a likely explanation?

Accepted Answer

A) The law of demand is violated. 
B) The demand for A decreased. 
C) The demand for A increased. 
D) The supply of A increased. 
E) The supply of A decreased. 
A) The law of demand is violated. 
B) The demand for A decreased. 
C) The demand for A increased. 
D) The supply of A increased. 
E) The supply of A decreased.

Question 15

If a factor of production can be used to produce either good A or good B, then A and B are

Accepted Answer

A) substitutes in production. 
B) complements in production. 
C) substitutes. 
D) complements. 
E) normal goods. 
A) substitutes in production. 
B) complements in production. 
C) substitutes. 
D) complements. 
E) normal goods.

Question 16

Suppose we observe a fall in the price of good A and an increase in the quantity of good A bought and sold. Which one of the following is a likely explanation?

Accepted Answer

A) The law of supply is violated. 
B) The demand for A decreased. 
C) The demand for A increased. 
D) The supply of A increased. 
E) The supply of A decreased. 
A) The law of supply is violated. 
B) The demand for A decreased. 
C) The demand for A increased. 
D) The supply of A increased. 
E) The supply of A decreased.

Question 17

Suppose we observe a rise in the price of good A and an increase in the quantity of good A bought and sold. Which one of the following is a likely explanation?

Accepted Answer

A) The law of demand is violated. 
B) The demand for A decreased. 
C) The demand for A increased. 
D) The supply of A increased. 
E) The supply of A decreased. 
A) The law of demand is violated. 
B) The demand for A decreased. 
C) The demand for A increased. 
D) The supply of A increased. 
E) The supply of A decreased.

Question 18

The demand curve for knobs is P = 75 - 6QD and the supply curve for knobs is P = 35 + 2QS. What is the equilibrium price of a knob?

Accepted Answer

A) $5 
B) $10 
C) $40 
D) $45 
E) $75 
A) $5 
B) $10 
C) $40 
D) $45 
E) $75

Lower labour costs

When the demand for good A increases,

Table 3.4.1 Use the table below to answer the following questions. -Refer to Table 3.4.1. If the price is $7, then the surplus is

Which of the following will definitely result in an increase in the equilibrium price?

Consider the market for cell phones. Suppose the price of a cell phone falls. Explain the effect of this event on the quantity of cell phones demanded and on the demand for cell phones.

Table 3.5.1 The Market for Car-Seat Heaters Use the table below to answer the following questions. -Refer to Table 3.5.1. If the price is set at $80, there will be a

If we observe a decrease in the equilibrium quantity of good A, we know that

Some sales managers are talking shop. Which one of the following quotations refers to a leftward shift of the demand curve?

If the price is above the equilibrium price, then

If A and B are complements in production and the price of A falls, the supply of B

Figure 3.4.1 Use the figure below to answer the following questions. -At price P₁ in Figure 3.4.1,

If Canadians suddenly develop a strong urge to escape the cold winter by taking vacations in Hawaii, the

A shortage is the amount by which quantity

Suppose we observe a fall in the price of good A and a decrease in the quantity of good A bought and sold. Which one of the following is a likely explanation?

If a factor of production can be used to produce either good A or good B, then A and B are

Suppose we observe a fall in the price of good A and an increase in the quantity of good A bought and sold. Which one of the following is a likely explanation?

Suppose we observe a rise in the price of good A and an increase in the quantity of good A bought and sold. Which one of the following is a likely explanation?

The demand curve for knobs is P = 75 - 6QD and the supply curve for knobs is P = 35 + 2QS. What is the equilibrium price of a knob?

What Is Economics

The Economic Problem

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 3: Demand and Supply

Lower labour costs

When the demand for good A increases,

Table 3.4.1 Use the table below to answer the following questions. -Refer to Table 3.4.1. If the price is $7, then the surplus is

Which of the following will definitely result in an increase in the equilibrium price?

Consider the market for cell phones. Suppose the price of a cell phone falls. Explain the effect of this event on the quantity of cell phones demanded and on the demand for cell phones.

Table 3.5.1 The Market for Car-Seat Heaters Use the table below to answer the following questions. -Refer to Table 3.5.1. If the price is set at $80, there will be a

If we observe a decrease in the equilibrium quantity of good A, we know that

Some sales managers are talking shop. Which one of the following quotations refers to a leftward shift of the demand curve?

If the price is above the equilibrium price, then

If A and B are complements in production and the price of A falls, the supply of B

Figure 3.4.1 Use the figure below to answer the following questions. -At price P1 in Figure 3.4.1,

If Canadians suddenly develop a strong urge to escape the cold winter by taking vacations in Hawaii, the

A shortage is the amount by which quantity

Suppose we observe a fall in the price of good A and a decrease in the quantity of good A bought and sold. Which one of the following is a likely explanation?

If a factor of production can be used to produce either good A or good B, then A and B are

Suppose we observe a fall in the price of good A and an increase in the quantity of good A bought and sold. Which one of the following is a likely explanation?

Suppose we observe a rise in the price of good A and an increase in the quantity of good A bought and sold. Which one of the following is a likely explanation?

The demand curve for knobs is P = 75 - 6QD and the supply curve for knobs is P = 35 + 2QS. What is the equilibrium price of a knob?

What Is Economics

The Economic Problem

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Figure 3.4.1 Use the figure below to answer the following questions. -At price P₁ in Figure 3.4.1,