Question 1

The Government of Canada promises to produce more defence goods without any decrease in the production of other goods.This promise is valid

Accepted Answer

A) if Canada is producing at a point outside its PPF. 
B) if Canada is producing at a point on its PPF. 
C) if Canada is producing at a point inside its PPF. 
D) only if the PPF shifts rightward. 
E) only if technology advances or capital increases. 
A) if Canada is producing at a point outside its PPF. 
B) if Canada is producing at a point on its PPF. 
C) if Canada is producing at a point inside its PPF. 
D) only if the PPF shifts rightward. 
E) only if technology advances or capital increases.

Question 2

The following events occur one at a time: I. The price of crude oil rises.
II. The price of a car rises.
III. All speed limits on highways are abolished.
IV. Robots cut car production costs.
The quantity of gasoline supplied

Accepted Answer

A) increases when all speed limits on highways are abolished. 
B) increases when the price of crude oil rises. 
C) decreases when robots cut car production costs. 
D) increases when the price of a car rises. 
E) decreases when the price of crude oil rises. 
A) increases when all speed limits on highways are abolished. 
B) increases when the price of crude oil rises. 
C) decreases when robots cut car production costs. 
D) increases when the price of a car rises. 
E) decreases when the price of crude oil rises.

Question 3

When a market is in equilibrium,

Accepted Answer

A) there is neither a surplus nor a shortage. 
B) the number of buyers equals the number of sellers. 
C) firms are producing the maximum quantity possible given the existing technology. 
D) supply equals demand. 
E) the quantity supplied is greater than or equal to the quantity demanded. 
A) there is neither a surplus nor a shortage. 
B) the number of buyers equals the number of sellers. 
C) firms are producing the maximum quantity possible given the existing technology. 
D) supply equals demand. 
E) the quantity supplied is greater than or equal to the quantity demanded.

Question 4

The demand curve slopes downward to the right because

Accepted Answer

A) an increase in income leads to increased consumption. 
B) of the law of supply. 
C) of the law of demand. 
D) of comparative advantage. 
E) as income rises, the quantity demanded increases. 
A) an increase in income leads to increased consumption. 
B) of the law of supply. 
C) of the law of demand. 
D) of comparative advantage. 
E) as income rises, the quantity demanded increases.

Question 5

Use the figure below to answer the following questions.
   
Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans and a substitute in production, rises, what is the new beans equilibrium, ceteris paribus?

Accepted Answer

A) 2 
B) 3 
C) 9 
D) 4 
E) 7 
A) 2 
B) 3 
C) 9 
D) 4 
E) 7

Question 6

Use the figure below to answer the following questions.
   
Figure 3.4.2
-The equilibrium price in the market illustrated by Figure 3.4.2 is

Accepted Answer

A) $2 a unit. 
B) $4 a unit. 
C) $6 a unit. 
D) $8 a unit. 
E) $10 a unit. 
A) $2 a unit. 
B) $4 a unit. 
C) $6 a unit. 
D) $8 a unit. 
E) $10 a unit.

Question 7

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.A technological improvement lowers the cost of producing coffee.At the same time, preferences for coffee decrease.The equilibrium quantity of coffee

Accepted Answer

A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on whether the price of coffee falls or rises. 
E) increases, decreases, or remains the same depending on the relative shifts of the demand and supply curves. 
A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on whether the price of coffee falls or rises. 
E) increases, decreases, or remains the same depending on the relative shifts of the demand and supply curves.

Question 8

Oatmeal is a normal good and cold cereal is a substitute for oatmeal.Raisins are a complement of oatmeal.Which of the following increases the demand for oatmeal?

Accepted Answer

A) an increase in the price of raisins 
B) a decrease in income 
C) a decrease in population 
D) an increase in the price of cold cereal 
E) an increase in the supply of oatmeal 
A) an increase in the price of raisins 
B) a decrease in income 
C) a decrease in population 
D) an increase in the price of cold cereal 
E) an increase in the supply of oatmeal

Question 9

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a ________ in the market and the price will ________.

Accepted Answer

A) shortage; rise 
B) shortage; fall 
C) surplus; rise 
D) surplus; fall 
E) surplus; either rise or fall depending on whether supply increases to meet the surplus 
A) shortage; rise 
B) shortage; fall 
C) surplus; rise 
D) surplus; fall 
E) surplus; either rise or fall depending on whether supply increases to meet the surplus

Question 10

If A is an inferior good and consumer income rises, the demand for A

Accepted Answer

A) increases, and the equilibrium price and the equilibrium quantity increase. 
B) increases and the equilibrium price rises, but the equilibrium quantity decreases. 
C) decreases, and the equilibrium price and the equilibrium quantity decrease. 
D) decreases and the equilibrium price falls, but the equilibrium quantity increases. 
E) decreases, the equilibrium price rises, and the equilibrium quantity decreases. 
A) increases, and the equilibrium price and the equilibrium quantity increase. 
B) increases and the equilibrium price rises, but the equilibrium quantity decreases. 
C) decreases, and the equilibrium price and the equilibrium quantity decrease. 
D) decreases and the equilibrium price falls, but the equilibrium quantity increases. 
E) decreases, the equilibrium price rises, and the equilibrium quantity decreases.

Question 11

If we observe an increase 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 risen. 
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 risen.

Question 12

Some producers are chatting over a beer.Which one of the following quotations refers to a rightward shift of the supply curve?

Accepted Answer

A) "Wage increases have forced us to raise our prices." 
B) "Our new, sophisticated equipment will enable us to undercut our competitors." 
C) "Raw material prices have sky-rocketed; we will have to pass the cost on to our customers." 
D) "We anticipate a big increase in demand. Our product price should rise, so we are planning for an increase in output." 
E) "Competitors are leaving the industry." 
A) "Wage increases have forced us to raise our prices." 
B) "Our new, sophisticated equipment will enable us to undercut our competitors." 
C) "Raw material prices have sky-rocketed; we will have to pass the cost on to our customers." 
D) "We anticipate a big increase in demand. Our product price should rise, so we are planning for an increase in output." 
E) "Competitors are leaving the industry."

Question 13

Use the table below to answer the following questions.
Table 3.5.3
Demand and supply schedules for designer sport t-shirts at CoolU
  
-Refer to Table 3.5.3.The equilibrium price is $________ and the equilibrium quantity is ________ t-shirts per month.

Accepted Answer

A) 6; 200 
B) 7; 220 
C) 8; 180 
D) 8; 220 
E) 8; 200 
A) 6; 200 
B) 7; 220 
C) 8; 180 
D) 8; 220 
E) 8; 200

Question 14

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.A new study comes out, revealing that drinking Pepsi increases your ability to study.The equilibrium quantity of coffee

Accepted Answer

A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases or decreases depending on the relative shifts of the supply and demand curves. 
A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases or decreases depending on the relative shifts of the supply and demand curves.

Question 15

New Maple Sap Method
With the new way to tap maple trees, farmers could produce 10 times as much maple syrup per acre.
Source: cbc.ca, February 5, 2014
-The new method of tapping maple trees ________ the supply of maple syrup and ________ the quantity supplied of maple syrup.

Accepted Answer

A) increases; does not change 
B) increases; increases 
C) does not change; increases 
D) does not change; does not change 
E) does not change; decreases 
A) increases; does not change 
B) increases; increases 
C) does not change; increases 
D) does not change; does not change 
E) does not change; decreases

Question 16

Use the figure below to answer the following questions.
   
Figure 3.2.1
-Which one of the following statements best characterizes point B in Figure 3.2.1?

Accepted Answer

A) Producers would be unwilling to sell the 9,000th apple for less than $0.50. 
B) The most that consumers would be willing to pay for the 9,000th apple is $0.50. 
C) At a price of $0.50, consumers will be unwilling to buy any apples. 
D) At a price of $0.50, there will be an apple shortage. 
E) At point B, the market is in equilibrium. 
A) Producers would be unwilling to sell the 9,000th apple for less than $0.50. 
B) The most that consumers would be willing to pay for the 9,000th apple is $0.50. 
C) At a price of $0.50, consumers will be unwilling to buy any apples. 
D) At a price of $0.50, there will be an apple shortage. 
E) At point B, the market is in equilibrium.

Question 17

Which one of the following will definitely decrease the equilibrium quantity?

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 price 
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 price

Question 18

Use the table below to answer the following questions.
Table 3.5.1
The Market for Car-Seat Heaters
  
-Refer to Table 3.5.1.Suppose a problem develops with car-seat heaters - they malfunction and occasionally cause serious burns.As a result, demand decreases by 100 heaters at each price.Simultaneously, the cost of production rises, and supply decreases by 100 heaters at each price.The new equilibrium price is $________ and the new equilibrium quantity is ________ heaters per month.

Accepted Answer

A) 70; 450 
B) 70; 350 
C) 50; 450 
D) 50; 350 
E) 60; 300 
A) 70; 450 
B) 70; 350 
C) 50; 450 
D) 50; 350 
E) 60; 300

Question 19

Suppose income increases.Choose the correct statement.

Accepted Answer

A) The equilibrium price of turnips falls if a turnip is an inferior good. 
B) The equilibrium price of turnips rises if a turnip is an inferior good. 
C) The equilibrium quantity of turnips decreases if a turnip is an inferior good. 
D) The supply of turnips decreases whether or not a turnip is an inferior good. 
E) Both A and C 
A) The equilibrium price of turnips falls if a turnip is an inferior good. 
B) The equilibrium price of turnips rises if a turnip is an inferior good. 
C) The equilibrium quantity of turnips decreases if a turnip is an inferior good. 
D) The supply of turnips decreases whether or not a turnip is an inferior good. 
E) Both A and C

Question 20

The law of supply tells us that other things remaining the same, as the

Accepted Answer

A) price of gasoline falls, the quantity of gasoline supplied decreases. 
B) price of gasoline rises, the quantity of gasoline supplied decreases. 
C) supply of gasoline increases, the price of gasoline falls. 
D) cost of producing gasoline falls, the supply of gasoline will increase. 
E) cost of producing gasoline increases, the price of gasoline rises. 
A) price of gasoline falls, the quantity of gasoline supplied decreases. 
B) price of gasoline rises, the quantity of gasoline supplied decreases. 
C) supply of gasoline increases, the price of gasoline falls. 
D) cost of producing gasoline falls, the supply of gasoline will increase. 
E) cost of producing gasoline increases, the price of gasoline rises.

The Government of Canada promises to produce more defence goods without any decrease in the production of other goods.This promise is valid

The following events occur one at a time: I. The price of crude oil rises. II. The price of a car rises. III. All speed limits on highways are abolished. IV. Robots cut car production costs. The quantity of gasoline supplied

When a market is in equilibrium,

The demand curve slopes downward to the right because

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans and a substitute in production, rises, what is the new beans equilibrium, ceteris paribus?

Use the figure below to answer the following questions. Figure 3.4.2 -The equilibrium price in the market illustrated by Figure 3.4.2 is

Oatmeal is a normal good and cold cereal is a substitute for oatmeal.Raisins are a complement of oatmeal.Which of the following increases the demand for oatmeal?

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a in the market and the price will .

If A is an inferior good and consumer income rises, the demand for A

If we observe an increase in the equilibrium quantity of good A, we know that

Some producers are chatting over a beer.Which one of the following quotations refers to a rightward shift of the supply curve?

Use the table below to answer the following questions. Table 3.5.3 Demand and supply schedules for designer sport t-shirts at CoolU -Refer to Table 3.5.3.The equilibrium price is $ and the equilibrium quantity is t-shirts per month.

New Maple Sap Method With the new way to tap maple trees, farmers could produce 10 times as much maple syrup per acre. Source: cbc.ca, February 5, 2014 -The new method of tapping maple trees the supply of maple syrup and the quantity supplied of maple syrup.

Use the figure below to answer the following questions. Figure 3.2.1 -Which one of the following statements best characterizes point B in Figure 3.2.1?

Which one of the following will definitely decrease the equilibrium quantity?

Suppose income increases.Choose the correct statement.

The law of supply tells us that other things remaining the same, as the

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Exam 3: Demand and Supply

The Government of Canada promises to produce more defence goods without any decrease in the production of other goods.This promise is valid

The following events occur one at a time: I. The price of crude oil rises. II. The price of a car rises. III. All speed limits on highways are abolished. IV. Robots cut car production costs. The quantity of gasoline supplied

When a market is in equilibrium,

The demand curve slopes downward to the right because

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans and a substitute in production, rises, what is the new beans equilibrium, ceteris paribus?

Use the figure below to answer the following questions. Figure 3.4.2 -The equilibrium price in the market illustrated by Figure 3.4.2 is

Oatmeal is a normal good and cold cereal is a substitute for oatmeal.Raisins are a complement of oatmeal.Which of the following increases the demand for oatmeal?

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a ________ in the market and the price will ________.

If A is an inferior good and consumer income rises, the demand for A

If we observe an increase in the equilibrium quantity of good A, we know that

Some producers are chatting over a beer.Which one of the following quotations refers to a rightward shift of the supply curve?

Use the table below to answer the following questions. Table 3.5.3 Demand and supply schedules for designer sport t-shirts at CoolU -Refer to Table 3.5.3.The equilibrium price is $________ and the equilibrium quantity is ________ t-shirts per month.

New Maple Sap Method With the new way to tap maple trees, farmers could produce 10 times as much maple syrup per acre. Source: cbc.ca, February 5, 2014 -The new method of tapping maple trees ________ the supply of maple syrup and ________ the quantity supplied of maple syrup.

Use the figure below to answer the following questions. Figure 3.2.1 -Which one of the following statements best characterizes point B in Figure 3.2.1?

Which one of the following will definitely decrease the equilibrium quantity?

Suppose income increases.Choose the correct statement.

The law of supply tells us that other things remaining the same, as the

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a in the market and the price will .

Use the table below to answer the following questions. Table 3.5.3 Demand and supply schedules for designer sport t-shirts at CoolU -Refer to Table 3.5.3.The equilibrium price is $ and the equilibrium quantity is t-shirts per month.

New Maple Sap Method With the new way to tap maple trees, farmers could produce 10 times as much maple syrup per acre. Source: cbc.ca, February 5, 2014 -The new method of tapping maple trees the supply of maple syrup and the quantity supplied of maple syrup.