Question 1

For a normal good,an increase in consumer income will lead to
I.A movement down the demand curve
II.An outward shift in the demand curve
III.An increase in supply

Accepted Answer

A)  I only
B)  II only
C)  III only
D)  Both II and III

Question 2

When the price of a good falls,there will be

Accepted Answer

A)  no change in quantity demanded.
B)  an outward shift in the demand for the good.
C)  a movement along the good's demand curve.
D)  both an outward shift in the demand for the good and a movement along the good's demand curve.

Question 3

A shortage will occur whenever

Accepted Answer

A)  the supply curve is upward sloping.
B)  price is set equal to the equilibrium price.
C)  price is set below the equilibrium price.
D)  price is set above the equilibrium price.

Question 4

Which one of the following statements is FALSE?

Accepted Answer

A)  There is some price at or below which the quantity supplied of a product is zero.
B)  As product price increases,producers are willing to offer more of the good for sale.
C)  To entice producers to offer more of a product on the market for sale,product price must rise.
D)  There is an inverse (negative) relationship between product price and quantity supplied.

Question 5

The law of demand states that,other things being equal,

Accepted Answer

A)  the quantity of a good or service demanded is inversely related to its price.
B)  the quantity of a good or service demanded is directly related to its price.
C)  changes in price and changes in quantity demanded move in the same direction.
D)  people always demand less at lower prices and more at higher prices.

Question 6

An increase in the price of coffee,holding other things constant,will

Accepted Answer

A)  increase the demand for coffee.
B)  decrease the supply of coffee.
C)  decrease the quantity of coffee demanded.
D)  decrease the demand for coffee.

Question 7

Figure 3-2 
-In Figure 3-2,if 40 million litres were supplied,the maximum price at which they could be sold is

Accepted Answer

A)  $0.30
B)  $0.40
C)  $0.60
D)  zero

Question 8

If other factors remain constant,the Canadian government's lowering of taxes on consumer electronic products would result in

Accepted Answer

A)  a decrease in demand for consumer electronic products in Canadian border towns.
B)  a decrease in demand for consumer electronic products by Canadians in U.S.border towns.
C)  an increase in demand for consumer electronic products in United States border towns.
D)  no change in demand for consumer electronic products.

Question 9

Table 3-2
 
-In the market described by Table 3-2 there will be a surplus of the product if price is above ________.

Accepted Answer

The answer of Table 3-2
 
-In the market described by...

Question 10

Table 3-2
 
-According to Table 3-2,a surplus exists when

Accepted Answer

A)  the price is $2 per unit.
B)  the price is $3 per unit.
C)  the price is $1 per unit.
D)  the price is greater than $3 per unit.

Question 11

The price of a movie increased from $5 to $7 while the price of renting a movie video increased from $2 to $3.50.The price of attending a movie relative to the price of renting a video

Accepted Answer

A)  decreased,but we need more information to know by how much.
B)  increased,but we need more information to know by how much.
C)  increased from 0.4 to 0.5.
D)  decreased from 2.5 to 2.0.

Question 12

Assume that beef and chicken are substitutes.Given a downward sloping demand curve for beef,a fall in beef prices will result in ________.

Accepted Answer

a decrease...

Question 13

In the long run,the number of producers in an industry may change.If the number of farmers growing soybeans increases,ceteris paribus,then

Accepted Answer

A)  the supply curve of soybeans will shift inward to the left.
B)  the demand curve of soybeans will shift inward to the left.
C)  the demand curve of soybeans will shift outward to the right.
D)  the supply curve of soybeans will shift outward to the right.

Question 14

Figure 3-1 
-In Figure 3-1,if both A and B are inferior goods,the effect of an increase in income is best shown by the

Accepted Answer

A)  shift of D₂ to D₁ in Graph A.
B)  movement along D₀ from P₂ to P₁ in Graph B.
C)  movement along D₀ from P₁ to P₂ in Graph B.
D)  shift of D₁ to D₂ in Graph A.

Question 15

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

Accepted Answer

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

Question 16

Figure 3-2 
-If Figure 3-2 represents a free market economy,market price and quantity will adjust to equilibrium at

Accepted Answer

A)  $0.60 and 10 million litres.
B)  $0.40 and 60 million litres.
C)  $0.30 and 50 million litres.
D)  $0.40 and 30 million litres.

Question 17

If there is a shortage in a free market,then

Accepted Answer

A)  suppliers will decrease their output to match demand.
B)  consumers competing for a limited quantity supplied will drive down the price.
C)  suppliers will accept any price below equilibrium.
D)  consumers competing for a limited quantity supplied will drive up the price of the good.

Exam 3: Demand and Supply

Table 3-2 -According to Table 3-2,a surplus exists when

Correct Answer
verified

If other factors remain constant,the Canadian government's lowering of taxes on consumer electronic products would result in

Correct Answer
verified

When the price of a good falls,there will be

Correct Answer
verified

If there is a shortage in a free market,then

Correct Answer
verified

For a normal good,an increase in consumer income will lead to I.A movement down the demand curve II.An outward shift in the demand curve III.An increase in supply

Correct Answer
verified

In the long run,the number of producers in an industry may change.If the number of farmers growing soybeans increases,ceteris paribus,then

Correct Answer
verified

The price of a movie increased from $5 to $7 while the price of renting a movie video increased from $2 to $3.50.The price of attending a movie relative to the price of renting a video

Correct Answer
verified

Assume that beef and chicken are substitutes.Given a downward sloping demand curve for beef,a fall in beef prices will result in ________.

Correct Answer
verified
a decrease...
View Answer

Figure 3-1 -In Figure 3-1,if both A and B are inferior goods,the effect of an increase in income is best shown by the

Correct Answer
verified

Which one of the following statements is FALSE?

Correct Answer
verified

An increase in the price of coffee,holding other things constant,will

Correct Answer
verified

The law of demand states that,other things being equal,

Correct Answer
verified

Figure 3-2 -If Figure 3-2 represents a free market economy,market price and quantity will adjust to equilibrium at

Correct Answer
verified

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

Correct Answer
verified

Table 3-2 -In the market described by Table 3-2 there will be a surplus of the product if price is above ________.

Correct Answer
verified

A shortage will occur whenever

Correct Answer
verified

Figure 3-2 -In Figure 3-2,if 40 million litres were supplied,the maximum price at which they could be sold is

Correct Answer
verified

Exam 3: Demand and Supply

Table 3-2 -According to Table 3-2,a surplus exists when

Correct AnswerverifiedShow Answer

If other factors remain constant,the Canadian government's lowering of taxes on consumer electronic products would result in

Correct AnswerverifiedShow Answer

When the price of a good falls,there will be

Correct AnswerverifiedShow Answer

If there is a shortage in a free market,then

Correct AnswerverifiedShow Answer

For a normal good,an increase in consumer income will lead to I.A movement down the demand curve II.An outward shift in the demand curve III.An increase in supply

Correct AnswerverifiedShow Answer

In the long run,the number of producers in an industry may change.If the number of farmers growing soybeans increases,ceteris paribus,then

Correct AnswerverifiedShow Answer

The price of a movie increased from $5 to $7 while the price of renting a movie video increased from $2 to $3.50.The price of attending a movie relative to the price of renting a video

Correct AnswerverifiedShow Answer

Assume that beef and chicken are substitutes.Given a downward sloping demand curve for beef,a fall in beef prices will result in ________.

Correct Answerverifieda decrease...View AnswerShow Answer

Figure 3-1 -In Figure 3-1,if both A and B are inferior goods,the effect of an increase in income is best shown by the

Correct AnswerverifiedShow Answer

Which one of the following statements is FALSE?

Correct AnswerverifiedShow Answer

An increase in the price of coffee,holding other things constant,will

Correct AnswerverifiedShow Answer

The law of demand states that,other things being equal,

Correct AnswerverifiedShow Answer

Figure 3-2 -If Figure 3-2 represents a free market economy,market price and quantity will adjust to equilibrium at

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 3-2 -In the market described by Table 3-2 there will be a surplus of the product if price is above ________.

Correct AnswerverifiedShow Answer

A shortage will occur whenever

Correct AnswerverifiedShow Answer

Figure 3-2 -In Figure 3-2,if 40 million litres were supplied,the maximum price at which they could be sold is

Correct AnswerverifiedShow Answer

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a decrease...
View Answer

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