Select the number of the question and the letter to indicate the answer you consider correct for each question. Answers to all questions are to be recorded on the answer sheet. (Please note - Do not submit the full question with a circle answer. ONLY the number and the letter). 1. The Law of demand a. applies to final consumer goods but not to the productive resources purchased by business firms. b. tells us how much of a good people want, but not necessarily how much of that good they are willing to pay for. c. tells us that when the price of a good falls, quantity demanded will increase. d. applies only to goods that are not absolute necessities. 2. The law of supply states that all other things remaining the same: a. as the price of a good increases, supply of the good will increase. b. as the price of a good increases, the quantity of the good supplied will increase. c. as the price of a good increases, demand for the good will increase. d. as the price of a good increases, the quantity of the good demanded will decrease. 3. Which of the following most appropriately illustrates the law demand? a. Sellers increase the amount they sell because the price of the product increases. b. A household buys more CDs after the price of CDs falls. c. Consumers prefer more goods to fewer goods. d. Households purchase fewer houses when their income falls. 4. Which of the following most appropriately illustrate the law of supply? a. Corporation XYZ has access to more labour resources, so it increases production. b. Because No Choice TV is the only cable company, it can charge a relatively high price for its services. c. As the price of chicken wings rises, Fred's BBQ is willing to sell more chicken wings. d. As the price of automobiles increases people are willing to buy fewer automobiles. 5. An increase in price of gasoline will: a. increase the supply of gasoline. b. increase the quantity of gasoline supplied. c. decrease the supply of gasoline. d. decrease the quantity of gasoline supplied. 6. A change in which of the following will cause a movement along the supply curve? a. a change in the state of technology. b. a change in taxes. c. a change in expectations about future prices. d. a change in the price of the good . 7. Other things equal, which of the following would NOT shift the supply curve for gasoline? a. a fall in the price of crude oil (from which gasoline is refined). b. an increase in the price of gasoline. c. an improvement in refining techniques that allows more gasoline to be squeezed out of a barrel of crude oil. d. an increase in the wages paid to people working in oil refineries. 8. To say that the market is in equilibrium implies that: a. producers are earning a profit. b. the quantity that buyers are willing and able to buy equals the quantity that sellers willing and able to sell. c. the market allocates goods fairly. d. the government is not intervening. 9. Any situation where quantity supplied does not equal quantity demanded indicates: a. a market equilibrium. b. a situation in which the actions of buyers do not match the actions of sellers. c. a place where the laws of supply and demand do not hold. d. a point where quantity demanded is equal to quantity supplied. 10. Demand is said to be elastic if a. the price of the good responds substantially to changes in demand. b. demand shifts substantially when income or the expected future price of the good changes. buyers do not respond much to changes in the price of the good. c. buyers respond substantially to changes in the price of the good. d. the price of the good responds only slightly to changes in demand. 11. Demand is said to be inelastic if a. buyers respond substantially to changes in the price of the good. b. demand shifts only slightly when the price of the good changes. c. the quantity demanded changes only slightly when the price of the good changes. d. the price of the good responds only slightly to changes in demand. 12. A certain production possibilities frontier shows production possibilities for two goods: pants and shirts. Which of the following concepts cannot be illustrated in this model? a. the flow of dollars between (i) sellers of pants and shirts and (ii) buyers of pants and shirts. b. the tradeoff between production of pants and production of shirts. c. the opportunity cost of shirts in terms of pants.d. the effect of economic growth on production possibilities involving pants and shirts. 13. Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that a. the nation is producing beyond its capacity, and inflation will occur. b. the nation is not using all available resources or is using inferior technology or both. c. the nation is producing an efficient combination of goods. d. there will be a large opportunity cost if the nation tries to increase production of any good.
Select the number of the question and the letter to indicate the answer you consider correct
for each question. Answers to all questions are to be recorded on the answer sheet. (Please
note - Do not submit the full question with a circle answer. ONLY the number and the
letter).
1. The Law of demand
a. applies to final consumer goods but not to the productive resources purchased by
business firms.
b. tells us how much of a good people want, but not necessarily how much of that good they
are willing to pay for.
c. tells us that when the price of a good falls, quantity demanded will increase.
d. applies only to goods that are not absolute necessities.
2. The law of supply states that all other things remaining the same:
a. as the price of a good increases, supply of the good will increase.
b. as the price of a good increases, the quantity of the good supplied will
increase.
c. as the price of a good increases, demand for the good will increase.
d. as the price of a good increases, the quantity of the good demanded will
decrease.
3. Which of the following most appropriately illustrates the
a. Sellers increase the amount they sell because the price of the product increases.
b. A household buys more CDs after the price of CDs falls.
c. Consumers prefer more goods to fewer goods.
d. Households purchase fewer houses when their income falls.
4. Which of the following most appropriately illustrate the law of supply?
a. Corporation XYZ has access to more labour resources, so it increases
production.
b. Because No Choice TV is the only cable company, it can charge a relatively
high price for its services.
c. As the price of chicken wings rises, Fred's BBQ is willing to sell more chicken
wings.
d. As the price of automobiles increases people are willing to buy fewer
automobiles.
5. An increase in price of gasoline will:
a. increase the supply of gasoline.
b. increase the quantity of gasoline supplied.
c. decrease the supply of gasoline.
d. decrease the quantity of gasoline supplied.
6. A change in which of the following will cause a movement along the supply curve?
a. a change in the state of technology.
b. a change in taxes.
c. a change in expectations about future prices.
d. a change in the price of the good .
7. Other things equal, which of the following would NOT shift the supply curve
for gasoline?
a. a fall in the price of crude oil (from which gasoline is
refined).
b. an increase in the price of gasoline.
c. an improvement in refining techniques that allows more gasoline to be squeezed out of a
barrel of crude oil.
d. an increase in the wages paid to people working in oil refineries.
8. To say that the market is in equilibrium implies that:
a. producers are earning a profit.
b. the quantity that buyers are willing and able to buy equals the quantity that sellers willing
and able to sell.
c. the market allocates goods fairly.
d. the government is not intervening.
9. Any situation where quantity supplied does not equal quantity demanded indicates:
a. a market equilibrium.
b. a situation in which the actions of buyers do not match the actions of
sellers.
c. a place where the laws of supply and demand do not hold.
d. a point where quantity demanded is equal to quantity supplied.
10. Demand is said to be elastic if
a. the price of the good responds substantially to changes in demand.
b. demand shifts substantially when income or the expected future price of the good
changes. buyers do not respond much to changes in the price of the good.
c. buyers respond substantially to changes in the price of the good.
d. the price of the good responds only slightly to changes in demand.
11. Demand is said to be inelastic if
a. buyers respond substantially to changes in the price of the good.
b. demand shifts only slightly when the price of the good changes.
c. the quantity demanded changes only slightly when the price of the good
changes.
d. the price of the good responds only slightly to changes in demand.
12. A certain
goods: pants and shirts. Which of the following concepts cannot be illustrated in
this model?
a. the flow of dollars between (i) sellers of pants and shirts and (ii) buyers of pants
and shirts.
b. the tradeoff between production of pants and production of shirts.
c. the
13. Suppose a nation is currently producing at a point inside its production
possibilities frontier. We know that
a. the nation is producing beyond its capacity, and inflation will occur.
b. the nation is not using all available resources or is using inferior technology or
both.
c. the nation is producing an efficient combination of goods.
d. there will be a large opportunity cost if the nation tries to increase production of
any good.
Step by step
Solved in 4 steps
