Question 1

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Accepted Answer

A) True 
 B)False

Question 2

Given a fixed demand curve,which of the following is affected when the price changes?

Accepted Answer

A)   income
B)   tastes
C)   expectations
D)   quantity demandedE) A) and C)
F) B) and C)

Question 3

Refer to the following:
A.What is the difference between a "change in supply" and a "change in quantity supplied"? (Graph your answer).
B.For each of the following changes,determine whether there will be a change in quantity supplied or a change in supply.
a.a change in the resource cost
b.a change in producer expectations
c.a change in price
d.a change in technology
e.a change in the number of sellers

Accepted Answer

A.A change in supply refers to a shift in the supply curve.A change in quantity supplied refers to a movement along a fixed supply curve.  B.A change in price causes a change in quantity supplied.All of the other changes listed shift the supply curve.

Question 4

Market demand is given as Qd = 200 - 6P.Market supply is given as Qs = 4P.What would result if the market price were $30?

Accepted Answer

A)   a shortage of 100
B)   a surplus of 100
C)   a surplus of 160
D)   a shortage of 160E) A) and D)
F) A) and B)

Question 5

A local cable TV company might be a monopolist.

Accepted Answer

A) True 
 B)False

Question 6

When evaluating differences or similarities between an increase in supply and an increase in quantity supplied,what do we know?

Accepted Answer

A)   The former is a shift of the curve and the latter is a movement along the curve.
B)   The former is a movement along the curve and the latter is a shift of the curve.
C)   Both are shifts of the supply curve.
D)   Both are movements along the curve.E) B) and D)
F) None of the above

Question 7

New oak tables are normal goods.What will happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,some buyers exit the market for oak tables,and the price of wood saws increased?

Accepted Answer

A)   price will fall and the effect on quantity is ambiguous
B)   price will rise and the effect on quantity is ambiguous
C)   quantity will fall and the effect on price is ambiguous
D)   quantity will rise and the effect on price is ambiguousE) B) and C)
F) B) and D)

Question 8

Which of the following best resembles a perfectly competitive market?

Accepted Answer

A)   tap water market
B)   banana market
C)   tea market
D)   smart phone marketE) None of the above
F) A) and D)

Question 9

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up,the price of jelly (a complementary good) increased,fewer firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you?

Accepted Answer

A)   price will fall and the effect on quantity is ambiguous
B)   price will rise and the effect on quantity is ambiguous
C)   quantity will fall and the effect on price is ambiguous
D)   effect on both price and quantity is ambiguousE) A) and C)
F) A) and D) D

Question 10

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

Accepted Answer

A)   space A
B)   space B
C)   space C
D)   space DE) A) and D)
F) None of the above

Question 11

You have decided to purchase a new Mustang convertible.A friend tells you that Ford will be offering a $3000 rebate on Mustangs starting next month.As a result of this information,what will happen to your demand curve for Mustangs?

Accepted Answer

A)   could shift either right or left
B)   shifts right today
C)   curve will be unaffected
D)   shifts left todayE) B) and D)
F) B) and C)

Question 12

Figure 4-4 
-Refer to the Figure 4-4.In this market,what would the equilibrium price and quantity be?

Accepted Answer

A)   $15 and 700
B)   $20 and 600
C)   $25 and 500
D)   $25 and 800E) A) and C)
F) A) and D)

Question 13

Which of the following would definitely result in a higher price in the market for smart phones?

Accepted Answer

A)   demand increases and supply decreases
B)   demand and supply both decrease
C)   demand decreases and supply increases
D)   demand and supply both increaseE) All of the above
F) B) and C)

Question 14

Which of the following would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Accepted Answer

A)   an increase in the price of wool shirts and a decrease in the price of raw cotton
B)   a decrease in the price of wool shirts and a decrease in the price of raw cotton
C)   an increase in the price of wool shirts and an increase in the price of raw cotton
D)   a decrease in the price of wool shirts and an increase in the price of raw cottonE) A) and B)
F) C) and D)

Question 15

What are the forces that make market economies work?

Accepted Answer

A)   price and quantity
B)   demand and supply
C)   cost and benefit
D)   employment and incomeE) A) and D)
F) All of the above

Question 16

Suppose you make jewellery.If the price of silver falls,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 jewelleryE) B) and C)
F) A) and B)

Question 17

An increase in the price of pizza will shift the demand curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Question 18

Suppose that the Canadian Medical Association announces that men who shave their heads are less likely to die of heart failure.What could we expect to happen?

Accepted Answer

A)   the current demand for hair gel to increase
B)   the current demand for razors to increase
C)   the current demand for combs to increase
D)   the current demand for hair dye for men to increaseE) A) and D)
F) B) and C) B

Question 19

You have decided to purchase a new Mustang convertible.A friend tells you that Ford will stop offering a $3000 rebate on Mustangs starting next month.As a result of this information,what will happen to your demand curve for Mustangs?

Accepted Answer

A)   could shift either right or left
B)   shifts right today
C)   curve will be unaffected
D)   shifts left todayE) C) and D)
F) B) and D)

Question 20

Figure 4-2 
-Refer to the Figure 4-2.What would happen at a price of $35?

Accepted Answer

A)   There would be a shortage of 400 units.
B)   There would be a shortage of 200 units.
C)   There would be a surplus of 200 units.
D)   There would be a surplus of 400 units.E) B) and C)
F) A) and D)

Exam 4: The Market Forces of Supply and Demand

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Correct Answer
verified

Given a fixed demand curve,which of the following is affected when the price changes?

Correct Answer
verified

Market demand is given as Qd = 200 - 6P.Market supply is given as Qs = 4P.What would result if the market price were $30?

Correct Answer
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A local cable TV company might be a monopolist.

Correct Answer
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When evaluating differences or similarities between an increase in supply and an increase in quantity supplied,what do we know?

Correct Answer
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New oak tables are normal goods.What will happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,some buyers exit the market for oak tables,and the price of wood saws increased?

Correct Answer
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Which of the following best resembles a perfectly competitive market?

Correct Answer
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What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up,the price of jelly (a complementary good) increased,fewer firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you?

Correct Answer
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D

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

Correct Answer
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You have decided to purchase a new Mustang convertible.A friend tells you that Ford will be offering a $3000 rebate on Mustangs starting next month.As a result of this information,what will happen to your demand curve for Mustangs?

Correct Answer
verified

Figure 4-4 -Refer to the Figure 4-4.In this market,what would the equilibrium price and quantity be?

Correct Answer
verified

Which of the following would definitely result in a higher price in the market for smart phones?

Correct Answer
verified

Which of the following would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Correct Answer
verified

What are the forces that make market economies work?

Correct Answer
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Suppose you make jewellery.If the price of silver falls,what would we expect you to do?

Correct Answer
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An increase in the price of pizza will shift the demand curve for pizza to the left.

Correct Answer
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Suppose that the Canadian Medical Association announces that men who shave their heads are less likely to die of heart failure.What could we expect to happen?

Correct Answer
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B

You have decided to purchase a new Mustang convertible.A friend tells you that Ford will stop offering a $3000 rebate on Mustangs starting next month.As a result of this information,what will happen to your demand curve for Mustangs?

Correct Answer
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Figure 4-2 -Refer to the Figure 4-2.What would happen at a price of $35?

Correct Answer
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Exam 4: The Market Forces of Supply and Demand

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Correct AnswerverifiedShow Answer

Given a fixed demand curve,which of the following is affected when the price changes?

Correct AnswerverifiedShow Answer

Market demand is given as Qd = 200 - 6P.Market supply is given as Qs = 4P.What would result if the market price were $30?

Correct AnswerverifiedShow Answer

A local cable TV company might be a monopolist.

Correct AnswerverifiedShow Answer

When evaluating differences or similarities between an increase in supply and an increase in quantity supplied,what do we know?

Correct AnswerverifiedShow Answer

New oak tables are normal goods.What will happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,some buyers exit the market for oak tables,and the price of wood saws increased?

Correct AnswerverifiedShow Answer

Which of the following best resembles a perfectly competitive market?

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up,the price of jelly (a complementary good) increased,fewer firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you?

Correct AnswerverifiedD

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

Correct AnswerverifiedShow Answer

You have decided to purchase a new Mustang convertible.A friend tells you that Ford will be offering a $3000 rebate on Mustangs starting next month.As a result of this information,what will happen to your demand curve for Mustangs?

Correct AnswerverifiedShow Answer

Figure 4-4 -Refer to the Figure 4-4.In this market,what would the equilibrium price and quantity be?

Correct AnswerverifiedShow Answer

Which of the following would definitely result in a higher price in the market for smart phones?

Correct AnswerverifiedShow Answer

Which of the following would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Correct AnswerverifiedShow Answer

What are the forces that make market economies work?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An increase in the price of pizza will shift the demand curve for pizza to the left.

Correct AnswerverifiedShow Answer

Suppose that the Canadian Medical Association announces that men who shave their heads are less likely to die of heart failure.What could we expect to happen?

Correct AnswerverifiedB

You have decided to purchase a new Mustang convertible.A friend tells you that Ford will stop offering a $3000 rebate on Mustangs starting next month.As a result of this information,what will happen to your demand curve for Mustangs?

Correct AnswerverifiedShow Answer

Figure 4-2 -Refer to the Figure 4-2.What would happen at a price of $35?

Correct AnswerverifiedShow Answer

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D

Correct Answer
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B

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Correct Answer
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