Question 1

Market demand is given as Qd = 95 - P.Market supply is given as Qs = 3P + 15.What would result if the market price were $10?

Accepted Answer

A)   a shortage of 20
B)   a surplus of 20
C)   a surplus of 40
D)   a shortage of 40E) B) and C)
F) A) and D)

Question 2

If the number of buyers in the housing market decreases,what will happen?

Accepted Answer

A)   Demand in the market will increase.
B)   Demand in the market will decrease.
C)   Supply in the market will increase.
D)   Supply in the market will decrease.E) B) and C)
F) A) and B)

Question 3

A supply curve slopes upward because,all else equal,a higher price means a greater quantity supplied.

Accepted Answer

A) True 
 B)False

Question 4

Workers at a bicycle assembly plant currently make minimum wage.If the provincial government increases the minimum wage by $1.00 an hour,what will likely happen?

Accepted Answer

A)   Demand for bicycle assembly workers will increase.
B)   Supply of bicycles will shift to the right.
C)   Supply of bicycles will shift to the left.
D)   The firm must increase output to maintain profit levels.E) C) and D)
F) A) and D)

Question 5

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 demandedE) All of the above
F) C) and D)

Question 6

Once the demand curve for a product or service is drawn,what is possible?

Accepted Answer

A)   It can shift either right or left.
B)   It remains stable over time at a given price.
C)   It can shift if the price changes.
D)   It can only be accurate at one price.E) B) and D)
F) C) and D)

Question 7

What might cause a movement along the supply curve?

Accepted Answer

A)   a change in technology
B)   a change in input prices
C)   a change in expectations about future prices
D)   a change in the price of the good or serviceE) C) and D)
F) None of the above

Question 8

Market demand is given as Qd = 300 - 0.5P.Market supply is given as Qs = 50 + 2P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market?

Accepted Answer

A)   price will be $200 and quantity will be 150
B)   price will be $35 and quantity will be 70
C)   price will be $100 and quantity will be 250
D)   price will be $150 and quantity will be 300E) B) and D)
F) B) and C)

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

What happens when the price of a good or service changes?

Accepted Answer

A)   Supply shifts in the opposite direction.
B)   Demand shifts in the opposite direction.
C)   Demand shifts in the same direction.
D)   There is a movement along a stable demand curve.E) A) and B)
F) B) and D)

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 togetherE) A) and C)
F) None of the above

Question 12

Suppose that the number of buyers in a market decreases 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.E) B) and C)
F) A) and D)

Question 13

Figure 4-5 
-Refer to the Figure 4-5.Which of the following is shown in Graph C?

Accepted Answer

A)   a decrease in demand
B)   a decrease in the number of sellers
C)   an increase in supply
D)   an increase in input pricesE) A) and B)
F) B) and C)

Question 14

What impact does a person's expectations about the future have?

Accepted Answer

A)   cannot affect demand because expectations change
B)   can affect future demand
C)   can affect current demand
D)   can shift a supply curveE) A) and D)
F) All of the above

Question 15

If goods A and B are complements,what will result from an increase in the price of A?

Accepted Answer

A)   more A and more B is sold
B)   more A and less B is sold
C)   less A and more B is sold
D)   less A and less B is soldE) C) and D)
F) A) and D)

Question 16

Market demand is given as Qd = 300 - 2P.Market supply is given as Qs = 2P + 100.In a perfectly competitive equilibrium,what will be price and quantity?

Accepted Answer

A)   Price will be $20 and quantity will be 140.
B)   Price will be $50 and quantity will be 200.
C)   Price will be $100 and quantity will be 300.
D)   Price will be $140 and quantity will be 380.E) A) and B)
F) A) and C)

Question 17

Market demand is given as QD = 220 - 4P.Market supply is given as QS = 2P + 40.If price increases from $50 to $53,what is the price elasticity of demand?

Accepted Answer

A)   0.1
B)   1.0
C)   12.0
D)   14.7E) A) and D)
F) A) and C)

Question 18

What is the term for buyers and sellers who have no influence on market price?

Accepted Answer

A)   price makers
B)   market pawns
C)   price takers
D)   powerlessE) B) and D)
F) C) and D)

Question 19

Which of the following would NOT shift the demand curve for a good or service?

Accepted Answer

A)   a change in income
B)   a change in the price of the good or service
C)   a change in expectations about the price of the good or service
D)   a change in the price of a related goodE) A) and D)
F) A) and C)

Question 20

Figure 4-10 
-Refer to the Figure 4-10.What would cause the movement from point B to point A on the graph?

Accepted Answer

A)   a decrease in the price of the good
B)   an increase in the price of the good
C)   an increase in technology
D)   a decrease in input pricesE) B) and C)
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

What impact does a person's expectations about the future have?

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

Correct AnswerverifiedShow Answer

Market demand is given as Qd = 300 - 2P.Market supply is given as Qs = 2P + 100.In a perfectly competitive equilibrium,what will be price and quantity?

Correct AnswerverifiedShow Answer

Workers at a bicycle assembly plant currently make minimum wage.If the provincial government increases the minimum wage by $1.00 an hour,what will likely happen?

Correct AnswerverifiedShow Answer

What happens when the price of a good or service changes?

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If the number of buyers in the housing market decreases,what will happen?

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Which of the following would NOT shift the demand curve for a good or service?

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A supply curve slopes upward because,all else equal,a higher price means a greater quantity supplied.

Correct AnswerverifiedShow Answer

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

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If goods A and B are complements,what will result from an increase in the price of A?

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Market demand is given as Qd = 300 - 0.5P.Market supply is given as Qs = 50 + 2P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market?

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Figure 4-10 -Refer to the Figure 4-10.What would cause the movement from point B to point A on the graph?

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Market demand is given as Qd = 95 - P.Market supply is given as Qs = 3P + 15.What would result if the market price were $10?

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Market demand is given as QD = 220 - 4P.Market supply is given as QS = 2P + 40.If price increases from $50 to $53,what is the price elasticity of demand?

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Once the demand curve for a product or service is drawn,what is possible?

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What is the term for buyers and sellers who have no influence on market price?

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Figure 4-5 -Refer to the Figure 4-5.Which of the following is shown in Graph C?

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

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What is a market?

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What might cause a movement along the supply curve?

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