Question 1

Morgan tells you that the price of lattes at the coffee shop will be going up next week.How will you probably respond

Accepted Answer

A)  by decreasing your current demand for lattes
B)  by increasing your current demand for lattes
C)  by not changing your current demand for lattes
D)  by refusing to ever buy any more lattes at that shop

Question 2

For teens,what does a 10 percent increase in the price of cigarettes lead to

Accepted Answer

A)  a 6 percent drop in teenage smoking
B)  a 12 percent drop in teenage smoking
C)  a 18 percent drop in teenage smoking
D)  a 24 percent drop in teenage smoking

Question 3

What does the law of demand imply

Accepted Answer

A)  price and quantity supplied are inversely related
B)  price and quantity demanded are inversely related
C)  price and quantity demanded are positively related
D)  price and quantity supplied are positively related

Question 4

Suppose you make jewellery.If the price of silver increases,what would we expect you to do

Accepted Answer

A)  be willing and able to produce less jewellery than before at each possible price
B)  be willing and able to produce more jewellery than before at each possible price
C)  face a greater demand for your jewellery
D)  face a weaker demand for your jewellery

Question 5

Recent pine beetle infestations that are destroying trees in the western provinces are expected to cause the price of lumber to rise in the next six months.As a result,what can we expect to happen to the supply of lumber

Accepted Answer

A)  It will fall in six months, but not now.
B)  It will increase in six months when the price goes up.
C)  It will fall now.
D)  It will increase now to meet as much demand as possible.

Question 6

Table 4-2
 
-Refer to the Table 4-2.What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price

Accepted Answer

A)  space A
B)  space B
C)  space C
D)  space D

Question 7

Figure 4-7
 
-Refer to the Figure 4-7.What does the movement from point B to point A on the graph show

Accepted Answer

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

Question 8

Suppose that the number of buyers in a market increases and a technological advancement occurs.What would we expect to happen in the 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.

Question 9

Baseballs and baseball bats are substitute goods.

Accepted Answer

A) True 
 B)False

Question 10

Holding all else constant,what will result from a higher price for ski-lift tickets

Accepted Answer

A)  increased number of skiers
B)  decreased supply of ski resorts
C)  decreased demand for other winter recreational activities
D)  decreased ski sales

Question 11

What is a market

Accepted Answer

A)  a group of demanders and suppliers of a particular good or service
B)  a group of people with common desires
C)  a place where only sellers meet
D)  a place where only buyers come together

Question 12

What is a demand curve

Accepted Answer

A)  the downward-sloping line relating the price of the good to the quantity demanded
B)  the upward-sloping line relating price to quantity supplied
C)  the curve that relates income to quantity demanded
D)  the curve that shows the same relationship between two goods as a production possibilities frontier

Question 13

Who ultimately determines the demand for a product or service

Accepted Answer

A)  those who buy the product or service
B)  the government
C)  the producers who create the product or service
D)  those who supply the raw materials used in the production of the good or service

Question 14

What is one reason that government taxes on cigarettes reduce smoking

Accepted Answer

A)  Cigarette companies are successful in passing much of the tax on to consumers.
B)  Cigarette companies do not pass much of the tax on to consumers.
C)  There are many good substitutes for cigarettes.
D)  Higher prices suggest less harmful cigarettes.

Question 15

On what basis is a good considered either a normal good or an inferior good

Accepted Answer

A)  the quality of the good
B)  the price of the good
C)  personal preference toward the good
D)  the amount of a person's income

Question 16

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $8 to $11,what is the price elasticity of demand

Accepted Answer

A)  0.2
B)  0.9
C)  1.1
D)  1.2

Question 17

Why does market price prevail in a perfectly competitive market

Accepted Answer

A)  because there are few sellers
B)  because the market is unregulated
C)  because there are distinctive products
D)  because no one has market power

Question 18

Other things equal,what happens when the price of a good rises

Accepted Answer

A)  The quantity demanded of the good increases.
B)  The supply increases.
C)  The quantity supplied of the good rises.
D)  The demand curve shifts to the left.

Question 19

Suppose that scientists find evidence that proves tattoos improve the body's immune system.What would we expect to see

Accepted Answer

A)  no change in the demand for tattoos
B)  a decrease in the demand for tattoos
C)  an increase in the demand for tattoos
D)  a decrease in the supply of tattoos

Question 20

Market demand is given as QD = 95 - P.Market supply is given as QS = 3P + 15.In a perfectly competitive equilibrium,what will be the quantity

Accepted Answer

A)  20
B)  60
C)  75
D)  80

Exam 4: The Market Forces of Supply and Demand

For teens,what does a 10 percent increase in the price of cigarettes lead to

Correct AnswerverifiedShow Answer

Baseballs and baseball bats are substitute goods.

Correct AnswerverifiedShow Answer

Other things equal,what happens when the price of a good rises

Correct AnswerverifiedShow Answer

What is one reason that government taxes on cigarettes reduce smoking

Correct AnswerverifiedShow Answer

Market demand is given as QD = 95 - P.Market supply is given as QS = 3P + 15.In a perfectly competitive equilibrium,what will be the quantity

Correct AnswerverifiedShow Answer

Suppose that scientists find evidence that proves tattoos improve the body's immune system.What would we expect to see

Correct AnswerverifiedShow Answer

Suppose that the number of buyers in a market increases and a technological advancement occurs.What would we expect to happen in the market

Correct AnswerverifiedShow Answer

What is a demand curve

Correct AnswerverifiedShow Answer

Recent pine beetle infestations that are destroying trees in the western provinces are expected to cause the price of lumber to rise in the next six months.As a result,what can we expect to happen to the supply of lumber

Correct AnswerverifiedShow Answer

Table 4-2 -Refer to the Table 4-2.What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price

Correct AnswerverifiedShow Answer

Why does market price prevail in a perfectly competitive market

Correct AnswerverifiedShow Answer

Suppose you make jewellery.If the price of silver increases,what would we expect you to do

Correct AnswerverifiedShow Answer

Morgan tells you that the price of lattes at the coffee shop will be going up next week.How will you probably respond

Correct AnswerverifiedShow Answer

What does the law of demand imply

Correct AnswerverifiedShow Answer

Holding all else constant,what will result from a higher price for ski-lift tickets

Correct AnswerverifiedShow Answer

Figure 4-7 -Refer to the Figure 4-7.What does the movement from point B to point A on the graph show

Correct AnswerverifiedShow Answer

On what basis is a good considered either a normal good or an inferior good

Correct AnswerverifiedShow Answer

Who ultimately determines the demand for a product or service

Correct AnswerverifiedShow Answer

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $8 to $11,what is the price elasticity of demand

Correct AnswerverifiedShow Answer

What is a market

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Market demand is given as Q_D= 95 - P.Market supply is given as Q_S= 3P + 15.In a perfectly competitive equilibrium,what will be the quantity

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Market demand is given as Q_D= 300 - 6P.Market supply is given as Q_S= 4P.If price increases from $8 to $11,what is the price elasticity of demand

Correct Answer
verified

Correct Answer
verified