Question 1

Ceteris paribus,which of the following statements describes a market when transportation costs are high relative to selling prices?

Accepted Answer

A) There are numerous markets that are geographically limited. 
B) There are few markets that are geographically limited. 
C) There are numerous markets that are global in scope. 
D) There are few markets that are global in scope. 
A) There are numerous markets that are geographically limited. 
B) There are few markets that are geographically limited. 
C) There are numerous markets that are global in scope. 
D) There are few markets that are global in scope. A

Question 2

As consumers experience an increase in income,the demand for steak increases and the demand for macaroni and cheese decreases.What can we determine from this information?

Accepted Answer

A) Steak and macaroni are substitute goods. 
B) Steak and macaroni are complementary goods. 
C) Steak is an inferior good, and macaroni is normal. 
D) Steak is a normal good, and macaroni is inferior. 
A) Steak and macaroni are substitute goods. 
B) Steak and macaroni are complementary goods. 
C) Steak is an inferior good, and macaroni is normal. 
D) Steak is a normal good, and macaroni is inferior. D

Question 3

If an increase in the price of Good X causes a decrease in the demand for Good Y,what can we conclude?

Accepted Answer

A) The price of Good Y will increase. 
B) Goods X and Y are normal goods. 
C) Goods X and Y are complements. 
D) Goods X and Y are substitutes. 
A) The price of Good Y will increase. 
B) Goods X and Y are normal goods. 
C) Goods X and Y are complements. 
D) Goods X and Y are substitutes. C

Question 4

Farm land can be used to produce either cattle or wheat.If the demand for cattle increases,what will happen in the market for wheat?

Accepted Answer

A) The demand for wheat will decrease. 
B) The supply of wheat will decrease. 
C) The supply of wheat will increase. 
D) The demand for wheat will increase. 
A) The demand for wheat will decrease. 
B) The supply of wheat will decrease. 
C) The supply of wheat will increase. 
D) The demand for wheat will increase.

Question 5

Assuming that Chinese food and Thai food are substitutes,which of the following will result if P.F.Chang's Chinese Restaurant reduces its prices?

Accepted Answer

A) The demand for meals at P. F. Chang's will increase. 
B) The demand for meals at the Bah Thai restaurant will decrease. 
C) The sales of the nearby Bah Thai restaurant will increase. 
D) The quantity of food demanded from P. F. Chang's will decrease. 
A) The demand for meals at P. F. Chang's will increase. 
B) The demand for meals at the Bah Thai restaurant will decrease. 
C) The sales of the nearby Bah Thai restaurant will increase. 
D) The quantity of food demanded from P. F. Chang's will decrease.

Question 6

What is the difference between a change in quantity supplied and a change in supply?

Accepted Answer

A) A change in supply and a change in the quantity supplied are the same thing. 
B) A change in quantity supplied is a change in the amount people want to sell, while a change in supply is a change in the amount they actually sell. 
C) A change in quantity supplied is caused by a change in a good's own price, while a change in supply is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. 
D) A change in supply is caused by a change in a good's own price, while a change in the quantity supplied is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. 
A) A change in supply and a change in the quantity supplied are the same thing. 
B) A change in quantity supplied is a change in the amount people want to sell, while a change in supply is a change in the amount they actually sell. 
C) A change in quantity supplied is caused by a change in a good's own price, while a change in supply is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. 
D) A change in supply is caused by a change in a good's own price, while a change in the quantity supplied is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes.

Question 7

If producers expect the price of a good to rise in the near future,what will be the effect on supply?

Accepted Answer

A) Current supply will increase. 
B) Current supply will decrease. 
C) Current supply will not be affected. 
D) Future supply will decrease. 
A) Current supply will increase. 
B) Current supply will decrease. 
C) Current supply will not be affected. 
D) Future supply will decrease.

Question 8

When the relative price of steak falls,we would expect people to buy a greater quantity of steak.

Accepted Answer

A) True 
 B)False

Question 9

What are the five things that will shift a demand curve to the right?

Accepted Answer

•A decrease in the price of a complement

Question 10

Which of the following statements about the law of supply is most accurate?

Accepted Answer

A) There is an inverse relationship between price and the 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) There is a direct relationship between price and the quantity supplied. 
A) There is an inverse relationship between price and the 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) There is a direct relationship between price and the quantity supplied.

Question 11

Which of the following changes does NOT cause a change in demand?

Accepted Answer

A) a change in the tastes of demanders 
B) a change in prices of unrelated goods 
C) a change in the incomes of demanders 
D) a change in the number of demanders 
A) a change in the tastes of demanders 
B) a change in prices of unrelated goods 
C) a change in the incomes of demanders 
D) a change in the number of demanders

Question 12

FIGURE 3-3
  
-Refer to Figure 3-3.The University Theatre faces market demand curve D₀ and has begun charging $10,up from $5,for tickets for Friday and Saturday night shows.What will students do as a result?

Accepted Answer

A) Increase their quantity of tickets demanded to Q₄. 
B) Decrease their demand for tickets to Q₁. 
C) Increase their demand for tickets to Q₄. 
D) Decrease their quantity of tickets demanded to Q₁. 
A) Increase their quantity of tickets demanded to Q₄. 
B) Decrease their demand for tickets to Q₁. 
C) Increase their demand for tickets to Q₄. 
D) Decrease their quantity of tickets demanded to Q₁.

Question 13

FIGURE 3-1
  
-Refer to Figure 3-1.Beginning on D₁,what would a shift to D₀ indicate?

Accepted Answer

A) an increase in quantity demanded 
B) a decrease in demand 
C) a decrease in quantity demanded 
D) an increase in demand 
A) an increase in quantity demanded 
B) a decrease in demand 
C) a decrease in quantity demanded 
D) an increase in demand

Question 14

What would happen to demand if consumers expect the price of a good to rise in the near future?

Accepted Answer

A) The current demand would increase. 
B) The future demand would decrease. 
C) The current demand would not be affected. 
D) The current demand would decrease. 
A) The current demand would increase. 
B) The future demand would decrease. 
C) The current demand would not be affected. 
D) The current demand would decrease.

Question 15

Other things constant,what will be the effect of a decrease in the price of fertilizer on the market for wheat?

Accepted Answer

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

Question 16

What does an upward-sloping supply curve show?

Accepted Answer

A) Suppliers expand production as the product price falls. 
B) Suppliers are willing to increase production of their goods if they receive higher prices for them. 
C) Buyers are willing to pay more for particularly scarce products. 
D) Buyers are willing to buy more as the product price falls. 
A) Suppliers expand production as the product price falls. 
B) Suppliers are willing to increase production of their goods if they receive higher prices for them. 
C) Buyers are willing to pay more for particularly scarce products. 
D) Buyers are willing to buy more as the product price falls.

Question 17

FIGURE 3-4
  
-Refer to Figure 3-4.What does a change from Point A to Point B represent?

Accepted Answer

A) a decrease in demand 
B) a decrease in quantity demanded 
C) an increase in demand 
D) an increase in quantity demanded 
A) a decrease in demand 
B) a decrease in quantity demanded 
C) an increase in demand 
D) an increase in quantity demanded

Question 18

What does a supply curve illustrate a direct relationship between?

Accepted Answer

A) price and quantity demanded 
B) price and demand 
C) price and quantity supplied 
D) price and supply 
A) price and quantity demanded 
B) price and demand 
C) price and quantity supplied 
D) price and supply

Question 19

A severe freeze has once again damaged the Ontario grape crop.What will the impact be on the market for wine?

Accepted Answer

A) a leftward shift of the supply curve 
B) a leftward shift of the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price 
C) a leftward shift of both the supply and demand curves 
D) a leftward shift of the demand curve, as consumers try to economize because of the shortage 
A) a leftward shift of the supply curve 
B) a leftward shift of the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price 
C) a leftward shift of both the supply and demand curves 
D) a leftward shift of the demand curve, as consumers try to economize because of the shortage

Question 20

Which of the following would NOT cause a change in the supply of milk?

Accepted Answer

A) an increase in the cost of feed for cows 
B) the discovery of growth hormones to stimulate the milk production of cows 
C) an increase in government subsidies to dairy farmers 
D) an increase in the price of milk 
A) an increase in the cost of feed for cows 
B) the discovery of growth hormones to stimulate the milk production of cows 
C) an increase in government subsidies to dairy farmers 
D) an increase in the price of milk

Ceteris paribus,which of the following statements describes a market when transportation costs are high relative to selling prices?

As consumers experience an increase in income,the demand for steak increases and the demand for macaroni and cheese decreases.What can we determine from this information?

If an increase in the price of Good X causes a decrease in the demand for Good Y,what can we conclude?

Farm land can be used to produce either cattle or wheat.If the demand for cattle increases,what will happen in the market for wheat?

Assuming that Chinese food and Thai food are substitutes,which of the following will result if P.F.Chang's Chinese Restaurant reduces its prices?

What is the difference between a change in quantity supplied and a change in supply?

If producers expect the price of a good to rise in the near future,what will be the effect on supply?

When the relative price of steak falls,we would expect people to buy a greater quantity of steak.

What are the five things that will shift a demand curve to the right?

Which of the following statements about the law of supply is most accurate?

Which of the following changes does NOT cause a change in demand?

FIGURE 3-3 -Refer to Figure 3-3.The University Theatre faces market demand curve D₀ and has begun charging $10,up from $5,for tickets for Friday and Saturday night shows.What will students do as a result?

FIGURE 3-1 -Refer to Figure 3-1.Beginning on D₁,what would a shift to D₀ indicate?

What would happen to demand if consumers expect the price of a good to rise in the near future?

Other things constant,what will be the effect of a decrease in the price of fertilizer on the market for wheat?

What does an upward-sloping supply curve show?

FIGURE 3-4 -Refer to Figure 3-4.What does a change from Point A to Point B represent?

What does a supply curve illustrate a direct relationship between?

A severe freeze has once again damaged the Ontario grape crop.What will the impact be on the market for wine?

Which of the following would NOT cause a change in the supply of milk?

The Role and Method of Economics

Scarcity, trade-Offs, and Production Possibilities

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters

Exam 3: Supply and Demand

Ceteris paribus,which of the following statements describes a market when transportation costs are high relative to selling prices?

As consumers experience an increase in income,the demand for steak increases and the demand for macaroni and cheese decreases.What can we determine from this information?

If an increase in the price of Good X causes a decrease in the demand for Good Y,what can we conclude?

Farm land can be used to produce either cattle or wheat.If the demand for cattle increases,what will happen in the market for wheat?

Assuming that Chinese food and Thai food are substitutes,which of the following will result if P.F.Chang's Chinese Restaurant reduces its prices?

What is the difference between a change in quantity supplied and a change in supply?

If producers expect the price of a good to rise in the near future,what will be the effect on supply?

When the relative price of steak falls,we would expect people to buy a greater quantity of steak.

What are the five things that will shift a demand curve to the right?

Which of the following statements about the law of supply is most accurate?

Which of the following changes does NOT cause a change in demand?

FIGURE 3-3 -Refer to Figure 3-3.The University Theatre faces market demand curve D₀ and has begun charging $10,up from $5,for tickets for Friday and Saturday night shows.What will students do as a result?

FIGURE 3-1 -Refer to Figure 3-1.Beginning on D₁,what would a shift to D₀ indicate?

What would happen to demand if consumers expect the price of a good to rise in the near future?

Other things constant,what will be the effect of a decrease in the price of fertilizer on the market for wheat?

What does an upward-sloping supply curve show?

FIGURE 3-4 -Refer to Figure 3-4.What does a change from Point A to Point B represent?

What does a supply curve illustrate a direct relationship between?

A severe freeze has once again damaged the Ontario grape crop.What will the impact be on the market for wine?

Which of the following would NOT cause a change in the supply of milk?

The Role and Method of Economics

Scarcity, trade-Offs, and Production Possibilities

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters