Question 1

If a shortage exists in a market,what do we know

Accepted Answer

A)  The actual price is below equilibrium price, and quantity demanded is greater than quantity supplied.
B)  The actual price is above equilibrium price, and quantity demanded is greater than quantity supplied.
C)  The actual price is above equilibrium price, and quantity supplied is greater than quantity demanded.
D)  The actual price is below equilibrium price, and quantity supplied is greater than quantity demanded.E) None of the above
F) B) and C)

Question 2

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) A) and B)
F) B) and C)

Question 3

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $10 to $14,what is the price elasticity of demand

Accepted Answer

A)  0.3
B)  0.7
C)  1.2
D)  1.4E) C) and D)
F) None of the above

Question 4

If 50-inch flat screen TVs became cheaper and buyers expected Netflix subscription prices to fall next year,what could we safely conclude would happen to the equilibrium price of a new Netflix subscription

Accepted Answer

A)  It would rise.
B)  It would fall.
C)  It would stay the same.
D)  It could either rise or fall.E) None of the above
F) B) and C)

Question 5

Market demand is given as QD = 75 - P.Market supply is given as QS = 3P + 15.If price increases from $5 to $7,what is the price elasticity of demand

Accepted Answer

A)  0.1
B)  0.3
C)  1.1
D)  2.3E) None of the above
F) B) and C)

Question 6

The law of demand states that the quantity demanded of a product is positively related to price.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following would NOT be a determinant of demand

Accepted Answer

A)  the price of related goods
B)  income
C)  expectations
D)  the prices of the inputs used to produce the goodE) B) and C)
F) None of the above

Question 8

Market demand is given as QD = 80 - 2P.Market supply is given as QS = 2P.What would result if the market price were $25

Accepted Answer

A)  a shortage of 30
B)  a surplus of 30
C)  a surplus of 20
D)  a shortage of 20E) A) and B)
F) None of the above

Question 9

Market demand is given as QD = 75 - P.Market supply is given as QS = 3P + 15.If price increases from $48 to $54,what is the price elasticity of demand

Accepted Answer

A)  0.1
B)  0.7
C)  2.1
D)  2.7E) A) and D)
F) None of the above

Question 10

What happens at the equilibrium price

Accepted Answer

A)  Buyers have an incentive to buy more.
B)  It is possible for there to be a shortage.
C)  Firms have an incentive to increase production.
D)  Everyone in the market has been satisfied.E) None of the above
F) All of the above

Question 11

What is the price where quantity supplied equals quantity demanded

Accepted Answer

A)  coordinating price
B)  cooperative price
C)  equilibrium price
D)  balancing priceE) A) and B)
F) None of the above

Question 12

In a market,the price of any good adjusts until quantity demanded equals quantity supplied.

Accepted Answer

A) True 
 B)False

Question 13

What is an example of an inferior good

Accepted Answer

A)  neckties
B)  one-ply toilet paper
C)  cotton sheets
D)  cut flowersE) C) and D)
F) All of the above

Question 14

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) A) and C)

Question 15

Sugar is a normal good.You observe that both the equilibrium price and quantity of sugar has fallen over time.Which of the following would be most consistent with this observation

Accepted Answer

A)  Consumers have experienced an increase in income and sugar-production technology has improved.
B)  The price of artificial sweetener has risen and the price of coffee has fallen.
C)  Consumer tastes have changed so as to prefer sugar less than before.
D)  The demand curve for sugar must be positively sloped.E) C) and D)
F) A) and B)

Question 16

It is not possible for demand and supply to shift at the same time.

Accepted Answer

A) True 
 B)False

Question 17

Market demand is given as QD = 300- 3P.Market supply is given as QS = 2P + 100.If price increases from $50 to $60,what is the price elasticity of demand

Accepted Answer

A)  0.6
B)  0.8
C)  1.2
D)  2.1E) B) and D)
F) All of the above

Question 18

A reduction in an input price will cause a change in quantity supplied,but not a change in supply.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following determines a market supply curve but not an individual supply curve

Accepted Answer

A)  number of sellers
B)  expectations
C)  input prices
D)  technologyE) A) and B)
F) A) and C)

Question 20

What is the market demand

Accepted Answer

A)  the sum of all individual demands
B)  the demand for every product in an industry
C)  the average quantity demanded at each price
D)  the quantity demanded that exceeds supplyE) A) and D)
F) B) and C)

Exam 4: The Market Forces of Supply and Demand

Market demand is given as QD = 300- 3P.Market supply is given as QS = 2P + 100.If price increases from $50 to $60,what is the price elasticity of demand

Correct AnswerverifiedShow Answer

What is the price where quantity supplied equals quantity demanded

Correct AnswerverifiedShow Answer

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

Market demand is given as QD = 80 - 2P.Market supply is given as QS = 2P.What would result if the market price were $25

Correct AnswerverifiedShow Answer

It is not possible for demand and supply to shift at the same time.

Correct AnswerverifiedShow Answer

What is the market demand

Correct AnswerverifiedShow Answer

Which of the following determines a market supply curve but not an individual supply curve

Correct AnswerverifiedShow Answer

Sugar is a normal good.You observe that both the equilibrium price and quantity of sugar has fallen over time.Which of the following would be most consistent with this observation

Correct AnswerverifiedShow Answer

If 50-inch flat screen TVs became cheaper and buyers expected Netflix subscription prices to fall next year,what could we safely conclude would happen to the equilibrium price of a new Netflix subscription

Correct AnswerverifiedShow Answer

What is an example of an inferior good

Correct AnswerverifiedShow Answer

The law of demand states that the quantity demanded of a product is positively related to price.

Correct AnswerverifiedShow Answer

Market demand is given as QD = 75 - P.Market supply is given as QS = 3P + 15.If price increases from $5 to $7,what is the price elasticity of demand

Correct AnswerverifiedShow Answer

If a shortage exists in a market,what do we know

Correct AnswerverifiedShow Answer

In a market,the price of any good adjusts until quantity demanded equals quantity supplied.

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 AnswerverifiedShow Answer

Which of the following would NOT be a determinant of demand

Correct AnswerverifiedShow Answer

What happens at the equilibrium price

Correct AnswerverifiedShow Answer

Market demand is given as QD = 75 - P.Market supply is given as QS = 3P + 15.If price increases from $48 to $54,what is the price elasticity of demand

Correct AnswerverifiedShow Answer

A reduction in an input price will cause a change in quantity supplied,but not a change in supply.

Correct AnswerverifiedShow Answer

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $10 to $14,what is the price elasticity of demand

Correct AnswerverifiedShow Answer

Market demand is given as Q_D= 300- 3P.Market supply is given as Q_S= 2P + 100.If price increases from $50 to $60,what is the price elasticity of demand

Correct Answer
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Market demand is given as Q_D= 80 - 2P.Market supply is given as Q_S= 2P.What would result if the market price were $25

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Market demand is given as Q_D= 75 - P.Market supply is given as Q_S= 3P + 15.If price increases from $5 to $7,what is the price elasticity of demand

Correct Answer
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Market demand is given as Q_D= 75 - P.Market supply is given as Q_S= 3P + 15.If price increases from $48 to $54,what is the price elasticity of demand

Correct Answer
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Correct Answer
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Market demand is given as Q_D= 300 - 6P.Market supply is given as Q_S= 4P.If price increases from $10 to $14,what is the price elasticity of demand

Correct Answer
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