Question 1

Which of the following is a determinant of demand?

Accepted Answer

A) cost of production 
B) income 
C) technology 
D) number of suppliers 
A) cost of production 
B) income 
C) technology 
D) number of suppliers

Question 2

Table 3-3
  
-In Table 3-3 if the price is $2 there will be a shortage of ________ units.

Accepted Answer

The answer of Table 3-3
  
-In Table 3-3 if...

Question 3

Explain what is wrong with saying that market equilibrium occurs when "supply equals demand."

Accepted Answer

"Supply" refers to the entire supply cur

Question 4

Figure 3-6  
-In Figure 3-6 the a shift from S₁ to S₂ would be

Accepted Answer

A) a decrease in supply. 
B) an increase in supply. 
C) an increase in quantity supplied. 
D) a decrease in quantity supplied. 
A) a decrease in supply. 
B) an increase in supply. 
C) an increase in quantity supplied. 
D) a decrease in quantity supplied.

Question 5

Which one of the following is NOT a determinant of demand?

Accepted Answer

A) income 
B) future price expectations 
C) the prices of related goods 
D) the cost of inputs in production 
A) income 
B) future price expectations 
C) the prices of related goods 
D) the cost of inputs in production

Question 6

Explain what it means for a market to be in equilibrium.

Accepted Answer

Equilibrium is a situation of balance.In

Question 7

Figure 3-5  
-In Figure 3-5,suppose a change takes place and as a result a new equilibrium occurs at point E.The change could have been caused by

Accepted Answer

A) a decrease in the price of CDs. 
B) a reduction in the wages paid to workers in the CD industry. 
C) an increase in the tax on CDs. 
D) an increase in demand for CDs. 
A) a decrease in the price of CDs. 
B) a reduction in the wages paid to workers in the CD industry. 
C) an increase in the tax on CDs. 
D) an increase in demand for CDs.

Question 8

At a commodity's market-clearing price,

Accepted Answer

A) there will be an excess demand. 
B) the quantity demanded will just equal the quantity supplied. 
C) the demand function should shift out. 
D) there will be a tendency for price to rise over time. 
A) there will be an excess demand. 
B) the quantity demanded will just equal the quantity supplied. 
C) the demand function should shift out. 
D) there will be a tendency for price to rise over time.

Question 9

All of the following will cause the supply curve of good A to shift rightward EXCEPT

Accepted Answer

A) a reduction in the prices of inputs used to produce good A. 
B) an increase in the market price of good A. 
C) a decrease in the sales tax on good A which producers must pay. 
D) an increase in the number of firms in the industry producing good A. 
A) a reduction in the prices of inputs used to produce good A. 
B) an increase in the market price of good A. 
C) a decrease in the sales tax on good A which producers must pay. 
D) an increase in the number of firms in the industry producing good A.

Question 10

Any improvement in production technology that permits more of a good or service to be produced with the same level of inputs causes

Accepted Answer

A) a rightward shift of the supply curve so that more is offered for sale at each price. 
B) a leftward shift of the supply curve so that less is offered for sale at each price. 
C) no movement of the supply curve,but a fall in price and a decrease in quantity supplied. 
D) a movement up the supply curve resulting in both a higher price and greater quantity supplied. 
A) a rightward shift of the supply curve so that more is offered for sale at each price. 
B) a leftward shift of the supply curve so that less is offered for sale at each price. 
C) no movement of the supply curve,but a fall in price and a decrease in quantity supplied. 
D) a movement up the supply curve resulting in both a higher price and greater quantity supplied.

Question 11

If the price of apples goes down,then the demand for pears will

Accepted Answer

A) decrease if apples and pears are complements. 
B) remain constant if apples and pears are related goods. 
C) decrease if apples and pears are substitutes. 
D) increase if apples and pears are substitutes. 
A) decrease if apples and pears are complements. 
B) remain constant if apples and pears are related goods. 
C) decrease if apples and pears are substitutes. 
D) increase if apples and pears are substitutes.

Question 12

The position of the market demand curve will be affected by all of the following EXCEPT

Accepted Answer

A) tastes and preferences. 
B) consumer incomes. 
C) changes in expectations of future relative prices. 
D) prices of the resources used to produce the product. 
A) tastes and preferences. 
B) consumer incomes. 
C) changes in expectations of future relative prices. 
D) prices of the resources used to produce the product.

Question 13

Which of the following pairs of goods would most likely be substitutes?

Accepted Answer

A) beer and wine 
B) razors and razor blades 
C) gasoline and motor oil 
D) hot dog buns and hot dogs 
A) beer and wine 
B) razors and razor blades 
C) gasoline and motor oil 
D) hot dog buns and hot dogs

Question 14

Table 3-3
  
-In Table 3-3,at a price of $8 per unit,

Accepted Answer

A) a surplus of 100 units will exist on the market. 
B) a shortage of 80 units will exist on the market. 
C) there will be no tendency for the market to approach a stable equilibrium. 
D) consumers will continue to bid prices upward. 
A) a surplus of 100 units will exist on the market. 
B) a shortage of 80 units will exist on the market. 
C) there will be no tendency for the market to approach a stable equilibrium. 
D) consumers will continue to bid prices upward.

Question 15

If bagels and croissants are substitute goods,which of the following is likely to occur if the price of bagels falls?

Accepted Answer

A) a leftward movement along the bagel demand curve 
B) a shift to the right in the demand curve for croissants 
C) a shift to the left in the demand curve for bagels 
D) a shift to the left in the demand curve for croissants 
A) a leftward movement along the bagel demand curve 
B) a shift to the right in the demand curve for croissants 
C) a shift to the left in the demand curve for bagels 
D) a shift to the left in the demand curve for croissants

Question 16

Figure 3-2  
-In Figure 3-2,if gasoline were selling for twenty cents a litre,quantity demanded per day would be

Accepted Answer

A) zero. 
B) 50 million litres. 
C) 30 million litres. 
D) 10 million litres. 
A) zero. 
B) 50 million litres. 
C) 30 million litres. 
D) 10 million litres.

Question 17

Using a graph,show a market equilibrium.Next,show how the graph changes when input costs increase,ceteris paribus.Explain what happens in the market as a result.

Accepted Answer

In the graph,the original equilibrium is

Question 18

The market demand curve for a particular good

Accepted Answer

A) is the horizontal sum of each individual demand curve for the good. 
B) may be less than an individual demand curve for the good. 
C) will not be affected by any of the determinants of individual demand. 
D) may or may not show a direct relationship between price and quantity demanded. 
A) is the horizontal sum of each individual demand curve for the good. 
B) may be less than an individual demand curve for the good. 
C) will not be affected by any of the determinants of individual demand. 
D) may or may not show a direct relationship between price and quantity demanded.

Question 19

The price of a new car is $20 000 while the price of a five-year old car of the same brand is $8 000.The next year the price of the new car increases to $22 000 and the price of a five-year old car of the same brand is $8 800.The relative price of the used car

Accepted Answer

A) increased by $800. 
B) decreased by 10 percent. 
C) increased by 10 percent. 
D) remained constant at 0.4. 
A) increased by $800. 
B) decreased by 10 percent. 
C) increased by 10 percent. 
D) remained constant at 0.4.

Question 20

The equilibrium or market-clearing price occurs where

Accepted Answer

A) quantity demanded equals quantity supplied. 
B) there is a shortage of the desired good. 
C) the supply curve intersects the horizontal axis. 
D) the demand curve intersects the vertical axis. 
A) quantity demanded equals quantity supplied. 
B) there is a shortage of the desired good. 
C) the supply curve intersects the horizontal axis. 
D) the demand curve intersects the vertical axis.

Which of the following is a determinant of demand?

Table 3-3 -In Table 3-3 if the price is $2 there will be a shortage of ________ units.

Explain what is wrong with saying that market equilibrium occurs when "supply equals demand."

Figure 3-6 -In Figure 3-6 the a shift from S₁ to S₂ would be

Which one of the following is NOT a determinant of demand?

Explain what it means for a market to be in equilibrium.

Figure 3-5 -In Figure 3-5,suppose a change takes place and as a result a new equilibrium occurs at point E.The change could have been caused by

At a commodity's market-clearing price,

All of the following will cause the supply curve of good A to shift rightward EXCEPT

Any improvement in production technology that permits more of a good or service to be produced with the same level of inputs causes

If the price of apples goes down,then the demand for pears will

The position of the market demand curve will be affected by all of the following EXCEPT

Which of the following pairs of goods would most likely be substitutes?

Table 3-3 -In Table 3-3,at a price of $8 per unit,

If bagels and croissants are substitute goods,which of the following is likely to occur if the price of bagels falls?

Figure 3-2 -In Figure 3-2,if gasoline were selling for twenty cents a litre,quantity demanded per day would be

Using a graph,show a market equilibrium.Next,show how the graph changes when input costs increase,ceteris paribus.Explain what happens in the market as a result.

The market demand curve for a particular good

The price of a new car is $20 000 while the price of a five-year old car of the same brand is $8 000.The next year the price of the new car increases to $22 000 and the price of a five-year old car of the same brand is $8 800.The relative price of the used car

The equilibrium or market-clearing price occurs where

The Nature of Economics

Production Possibilities and Economic Systems

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 3: Demand and Supply

Which of the following is a determinant of demand?

Table 3-3 -In Table 3-3 if the price is $2 there will be a shortage of ________ units.

Explain what is wrong with saying that market equilibrium occurs when "supply equals demand."

Figure 3-6 -In Figure 3-6 the a shift from S₁ to S₂ would be

Which one of the following is NOT a determinant of demand?

Explain what it means for a market to be in equilibrium.

Figure 3-5 -In Figure 3-5,suppose a change takes place and as a result a new equilibrium occurs at point E.The change could have been caused by

At a commodity's market-clearing price,

All of the following will cause the supply curve of good A to shift rightward EXCEPT

Any improvement in production technology that permits more of a good or service to be produced with the same level of inputs causes

If the price of apples goes down,then the demand for pears will

The position of the market demand curve will be affected by all of the following EXCEPT

Which of the following pairs of goods would most likely be substitutes?

Table 3-3 -In Table 3-3,at a price of $8 per unit,

If bagels and croissants are substitute goods,which of the following is likely to occur if the price of bagels falls?

Figure 3-2 -In Figure 3-2,if gasoline were selling for twenty cents a litre,quantity demanded per day would be

Using a graph,show a market equilibrium.Next,show how the graph changes when input costs increase,ceteris paribus.Explain what happens in the market as a result.

The market demand curve for a particular good

The price of a new car is $20 000 while the price of a five-year old car of the same brand is $8 000.The next year the price of the new car increases to $22 000 and the price of a five-year old car of the same brand is $8 800.The relative price of the used car

The equilibrium or market-clearing price occurs where

The Nature of Economics

Production Possibilities and Economic Systems

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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