Deck 3: Demand, Supply, and Price

Question 1

A decrease in supply

A) has the same meaning as "a decrease in quantity supplied."
B) refers to a drop in the quantity actually exchanged.
C) is likely to result from a decrease in the price of a factor of production.
D) refers to a leftward shift in the supply curve.
E) refers to a downward movement along a supply curve.

Answer 1

D

Question 2

The "law of demand" hypothesizes that, other things being equal,

A) price and demand vary inversely.
B) the lower the price, the greater the demand.
C) price and quantity demanded are positively related.
D) the higher the price, the lower the quantity demanded.
E) the higher the income, the higher the quantity demanded.

Answer 2

D

Question 3

The supply and demand schedules for dozens of roses are given below: $$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity Supplied per } \\\text { period }\end{array} & \begin{array} { l } \text { Quantity Demanded per } \\\text { period }\end{array} \\\hline \$ 10 & 200 & 500 \\\hline \$ 20 & 300 & 450 \\\hline \$ 30 & 400 & 400 \\\hline \$ 40 & 500 & 350 \\\hline \$ 50 & 600 & 300 \\\hline\end{array}\\\text { TABLE 3- } 1\end{array}$$

-Refer to Table 3- 1. How many dozens of roses would actually be purchased if the price in this market were $10?

A) 500
B) 300
C) 400
D) 350
E) 200

Answer 3

200

Question 4

FIGURE 3- 2
Refer to Figure 3- 2. If the supply curve is given by S, the energy- efficient light bulbs is 175 000 when the price is $9.

A) quantity purchased of
B) quantity sold of
C) supply schedule for
D) quantity supplied of
E) supply of

Question 5

Suppose the demand curves for goods A, B, and C have the following functional forms, where Q denotes quantity demanded, P denotes price, and M denotes income:
QA = 120 - 3.5PA - 6PB + 14M QB= 100 - 2PB + 3PC + 1.1M QC = 1500 - 0.5PC - 300M.
Based on these demand curves, which of the following goods are known to be inferior goods?

A) A
B) B
C) C
D) A and B only
E) A, B and C

Question 6

The table below displays hypothetical demand and supply schedules for the market for overnight parcel deliveries in Canada. $$\begin{array}{l}\begin{array} { | l | l | l | l | l | l | } \hline & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (millions) }\end{array} & && \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (millions) }\end{array} & \\\hline \text { Price (\$) } & \text { Year 1 } & \text { Year 2 } & & \text { Year 1 } & \text { Year 2 } \\\hline & & & & \\\hline 30 & 80 & 95 && 140 & 125 \\\hline 26 & 90 & 105 & &135 & 120 \\\hline 22 & 100 & 115 && 130 & 115 \\\hline 18 & 110 & 125 & &125 & 110 \\\hline 14 & 120 & 135 && 120 & 105 \\\hline 10 & 130 & 145 & &115 & 100 \\\hline\end{array}\\\text { TABLE 3- } 3\end{array}$$

-Refer to Table 3- 3. Which of the following statements describes a likely event in the market for overnight parcel delivery? From Year 1 to Year 2,

A) the price of regular parcel delivery decreased.
B) the government introduced a subsidy for overnight parcel delivery.
C) consumer preferences changed toward a desire for faster delivery.
D) the number of suppliers of overnight parcel delivery service increased.
E) there was a decrease in the price of jet fuel.

Question 7

Economists say there has been a change in demand when there is

A) a price change.
B) a movement along the demand curve.
C) a shift of the supply curve.
D) a shift of the demand curve.
E) a quantity change.

Question 8

The supply and demand schedules for the umbrella market are given below: $$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Price } & \text { Quantity Supplied } & \text { Quantity Demanded } \\\hline \$ 10 & 400 & 700 \\\hline \$ 15 & 500 & 650 \\\hline \$ 20 & 600 & 600 \\\hline \$ 25 & 700 & 550 \\\hline \$ 30 & 800 & 500 \\\hline\end{array}\\\text { TABLE } 3 - 2\end{array}$$

-Refer to Table 3- 2. What number of umbrellas would actually be purchased if the price in this market were $10?

A) 700
B) 650
C) 400
D) 500
E) 550

Question 9

FIGURE 3- 5
Refer to Figure 3- 5. If supply were to increase, this would lead to

A) an increase in both P and Q.
B) an increase in P and a decrease in Q.
C) a decrease in both P and Q.
D) no change in P or Q.
E) a decrease in P and an increase in Q.

Question 10

Suppose we observe an increase in the price of good A and an increase in the quantity of good A exchanged. Which of the following is a likely explanation?

A) The supply of good A has increased.
B) The "law of supply" is violated.
C) The "law of demand" is violated.
D) The demand for good A has increased.
E) There is an excess supply of good A.

Question 11

If the legal beer- drinking age is raised from 18 to 21, the changes to the equilibrium price and quantity of beer are likely to be that

A) price falls and quantity rises.
B) price rises and quantity rises.
C) no change in price or quantity occurs.
D) price rises and quantity falls.
E) price falls and quantity falls.

Question 12

FIGURE 3- 1
Refer to Figure 3- 1. A shift of the demand curve for energy- efficient light bulbs from D to D2 could be caused by

A) an increase in the price of ordinary light bulbs.
B) a change in preferences away from ordinary bulbs to energy- efficient bulbs.
C) a news bulletin stating that energy- efficient light bulbs emit a harmful gas.
D) a decrease in the price of energy- efficient light bulbs.
E) an expectation that new government regulation will require the use of energy- efficient light bulbs only.

Question 13

Which of the following pairs of goods are likely to be substitutes for a large group of consumers?

A) eggs and toast
B) green beans and peas
C) coffee and cream
D) pancakes and syrup
E) wieners and buns

Question 14

If a demand curve and a supply curve can be stated functionally as Qd = 100 - 5P; and Qs = 90 +
5P, respectively, then the equilibrium quantity and price (Q, P) would be

A) 190; 10.
B) 190; 1.
C) 95; 1.
D) 95; 10
E) 1; 95.

Question 15

Consider cars and gasoline. Other things being equal, when the price of cars decreases, the demand for gasoline is likely to

A) decrease because the two goods are complements.
B) remain unchanged because cars and gasoline are two distinct markets.
C) remain unchanged.
D) remain unchanged because cars and gasoline are produced independently of one another.
E) increase because the two goods are complements.

Question 16

A left ward shift in the supply curve indicates

A) a decrease in the quantity supplied at each price.
B) that an increase in income results in an increase in the quantity demanded at each price.
C) that more is demanded at each price.
D) that more suppliers have entered the industry.
E) an increase in the quantity supplied at each price.

Question 17

If the price of tea falls and as a consequence the demand for sugar rises, then tea and sugar are

A) luxury goods.
B) independent goods.
C) complementary goods.
D) neutral goods.
E) substitute goods.

Question 18

Excess demand is the same thing as

A) the area to the left of the equilibrium price on a supply and demand diagram.
B) quantity demanded exceeding quantity supplied.
C) quantity supplied exceeding quantity demanded.
D) excess supply.
E) the area to the right of the equilibrium price on a supply and demand diagram.

Question 19

FIGURE 3- 1
Refer to Figure 3- 1. A shift of the demand curve for energy- efficient light bulbs from D to D1 could be caused by

A) a change in preferences toward ordinary light bulbs.
B) a decrease in the price of energy- efficient light bulbs.
C) a decrease in the price of ordinary light bulbs.
D) a news bulletin stating that energy- efficient light bulbs emit a harmful gas.
E) an expectation that government regulation will soon prohibit the use of ordinary light bulbs.

Question 20

Which of the following would cause a movement along the demand curve for ski- lift tickets, other things being equal?

A) an increase in price as the supply curve for lift tickets shifts to the left
B) a change in tastes in favour of skiing
C) a rise in average household income
D) a rise in the price of ski boots and skis
E) an increase in population

Question 21

Suppose that the demand curves for goods A, B, and C have the following functional forms:, where Q denotes quantity demanded and P denotes price:
QA = 120 - 3.5PA - 6PB QB = 100 - 2PB + 3PC QC = 1500 - 0.5PC.
Based on these demand curves, which of the following pairs of goods are known to be substitutes?

A) A and B
B) A and C, and B and C
C) B and C
D) A and C
E) None of the pairs are substitutes.

Question 22

Suppose new medical research suggests that consuming 200 grams of tofu everyday helps to prevent heart disease. Widespread knowledge of this research, other things being equal, is likely to have what impact on the market for tofu?

A) shift the whole demand curve to the left
B) there would likely be no effect.
C) movement along the demand curve to the right
D) shift the whole demand curve to the right
E) movement along the demand curve to the left

Question 23

A surplus exists in the market when

A) the quantity demanded exceeds the quantity supplied.
B) supply and demand are equal.
C) the quantity demanded is less than the quantity supplied.
D) the supply curve has shifted to the left.
E) the equilibrium price is too low.

Question 24

Suppose there is a decrease in the quantity supplied of copper at each price. This change would imply

A) a shift to the left of the supply curve.
B) a shift to the right of the supply curve.
C) a movement down the supply curve.
D) a movement up the supply curve.

Question 25

A rise in the quantity demanded of lemons can be attributed to a

A) decline in the number of people drinking lemonade.
B) leftward shift in the supply curve of lemons.
C) rightward shift in the supply curve of lemons.
D) cold spell which makes people want less lemonade.
E) decrease in the price of artificial lemon flavouring.

Question 26

A normal good is one

A) for which demand does not vary with household income.
B) that normal people consume.
C) that everyone normally consumes.
D) for which demand varies inversely with household income.
E) for which demand varies directly with household income.

Question 27

The table below displays hypothetical demand and supply schedules for the market for overnight parcel deliveries in Canada. $$\begin{array}{l}\begin{array} { | l | l | l | l | l | l | } \hline & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (millions) }\end{array} & && \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (millions) }\end{array} & \\\hline \text { Price (\$) } & \text { Year 1 } & \text { Year 2 } & & \text { Year 1 } & \text { Year 2 } \\\hline & & & & \\\hline 30 & 80 & 95 && 140 & 125 \\\hline 26 & 90 & 105 & &135 & 120 \\\hline 22 & 100 & 115 && 130 & 115 \\\hline 18 & 110 & 125 & &125 & 110 \\\hline 14 & 120 & 135 && 120 & 105 \\\hline 10 & 130 & 145 & &115 & 100 \\\hline\end{array}\\\text { TABLE 3- } 3\end{array}$$

-Refer to Table 3- 3. Which of the following statements describes a likely event in the market for overnight parcel delivery? From Year 1 to Year 2,

A) there was a decrease in consumers' income.
B) the number of suppliers of overnight parcel delivery service increased.
C) there was an improvement in technology for tracking overnight parcels.
D) there was a rise in the price of jet fuel.
E) the price of regular parcel delivery decreased.

Question 28

Which of the following events would cause a change in the quantity supplied of some agricultural commodity but would not cause a change in the supply of that same commodity?

A) a change in the number of suppliers of the commodity.
B) a change in the price of substitute goods.
C) a technological change.
D) a change in factor costs.
E) a change in the price of the commodity.

Question 29

A fall in the price of raw milk (which is used in the production of ice cream) will

A) decrease the supply of ice cream, causing the supply curve to shift to the right.
B) have no effect on the supply curve of ice cream but cause a downward movement along the supply curve of ice cream.
C) increase the supply of ice cream, causing the supply curve of ice cream to shift to the right.
D) decrease the supply of ice cream, causing the supply curve of ice cream to shift to the left.
E) increase the supply of ice cream, causing the supply curve to shift to the left.

Question 30

The market supply curve for wooden shipping crates would shift to the right

A) if a tax is applied to shipping crates.
B) if technological conditions for the production of crates deteriorates.
C) if a government subsidy for shipping crates is withdrawn.
D) if the prices of inputs fall.
E) if suppliers leave the industry.

Question 31

The price of one good divided by the price of another good is called a

A) ceteris paribus price.
B) absolute price.
C) marginal price.
D) relative price.
E) money price.

Question 32

If goods X and Y are complements and the price of X falls, all other things being equal, the demand curve for Y will

A) unable to determine.
B) not shift at all.
C) shift to the left.
D) shift to the right.

Question 33

A demand curve is

A) a numerical table showing the inverse relationship between quantity demanded and price, other things being equal.
B) a timetable showing the quantity demanded at different time periods.
C) an abstract concept underlying the graph of a demand curve.
D) a functional statement of the demand relationship.
E) a graph showing the relationship between quantity demanded and the price of a commodity, other things being equal.

Question 34

The table below displays hypothetical demand and supply schedules for the market for overnight parcel deliveries in Canada. $$\begin{array}{l}\begin{array} { | l | l | l | l | l | l | } \hline & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (millions) }\end{array} & && \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (millions) }\end{array} & \\\hline \text { Price (\$) } & \text { Year 1 } & \text { Year 2 } & & \text { Year 1 } & \text { Year 2 } \\\hline & & & & \\\hline 30 & 80 & 95 && 140 & 125 \\\hline 26 & 90 & 105 & &135 & 120 \\\hline 22 & 100 & 115 && 130 & 115 \\\hline 18 & 110 & 125 & &125 & 110 \\\hline 14 & 120 & 135 && 120 & 105 \\\hline 10 & 130 & 145 & &115 & 100 \\\hline\end{array}\\\text { TABLE 3- } 3\end{array}$$

-Refer to Table 3- 3. The equilibrium price and quantity for overnight parcel delivery in Year 2 is
And million parcels.

A) $22; 115
B) $14; 120
C) $18; 125
D) $18; 110
E) $10; 100

Question 35

If goods X and Y are substitutes and the price of X falls, all other things being equal, the demand curve for Y will

A) shift to the left.
B) not shift at all.
C) shift to the right.
D) be indeterminate.

Question 36

A fall in the price of potatoes, which are used in the production of french fries, will

A) lead to an increase in the supply of french fries, causing the supply curve of french fries to shift to the right.
B) lead to a decrease in the supply of french fries, causing the supply curve of french fries to shift to the left.
C) have no effect on the supply of french fries but cause a movement along the supply curve of french fries.
D) have no effect on the supply of french fries.
E) lead to a decrease in the demand for french fries.

Question 37

The supply and demand schedules for dozens of roses are given below: $$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity Supplied per } \\\text { period }\end{array} & \begin{array} { l } \text { Quantity Demanded per } \\\text { period }\end{array} \\\hline \$ 10 & 200 & 500 \\\hline \$ 20 & 300 & 450 \\\hline \$ 30 & 400 & 400 \\\hline \$ 40 & 500 & 350 \\\hline \$ 50 & 600 & 300 \\\hline\end{array}\\\text { TABLE 3- } 1\end{array}$$

-Refer to Table 3- 1. The equilibrium price for a dozen roses is .

A) $30
B) $50
C) $20
D) $40
E) $10

Question 38

FIGURE 3- 3
Refer to Figure 3- 3. At a price of P1 there would be excess supply equal to

A) Q4 Q5
B) Q2 Q4
C) Q1 Q5
D) 0
E) Q1 Q2

Question 39

FIGURE 3- 3
Refer to Figure 3- 3. At a price of P1 there is excess in the market for X and pressure for the price to .

A) demand; rise
B) supply; rise
C) supply; fall
D) demand; fall

Question 40

With a given upward- sloping supply curve for sirloin steak (a normal good), a rise in household income will cause the

A) equilibrium price to decrease and equilibrium quantity of sirloin steak to increase.
B) equilibrium price and equilibrium quantity of sirloin steak to both increase.
C) equilibrium price and equilibrium quantity of sirloin steak to both decrease.
D) equilibrium price to increase and equilibrium quantity of sirloin steak to decrease.
E) equilibrium price to increase and equilibrium quantity of sirloin steak to remain constant.

Question 41

The term "quantity supplied" is the amount of a commodity that

A) firms wish to sell at a given price during a given period of time.
B) firms actually sell during a given period of time at a given price.
C) is supplied at a fair market price.
D) is exchanged between firms and consumers during a given period of time at a given price.
E) households wish firms would sell during a given period of time at a given price.

Question 42

FIGURE 3- 5
Refer to Figure 3- 5. If supply and demand were to increase simultaneously, this would lead to

A) an increase in Q and an indeterminate change in P.
B) a decrease in P and in Q.
C) an increase in P and an indeterminate change in Q.
D) an increase in P and in Q.
E) no change in P or Q.

Question 43

An increase in the number of firms wanting to provide accounting services will cause a for accounting services.

A) leftward shift in the supply curve
B) rightward shift in the supply curve
C) leftward shift in the demand curve
D) simultaneous shift of both the demand and supply curves
E) rightward shift in the demand curve

Question 44

Consider butter and margarine, which are substitutes. When the price of butter falls, the demand curve for margarine is likely to

A) shift to the left.
B) remain stationary.
C) remain stationary, although its price will rise.
D) remain stationary, although its price will fall.
E) shift to the right.

Question 45

Which of the following best defines quantity demanded?

A) The amount an individual purchases at its current price.
B) The various amounts that a society desires at all relevant prices.
C) The amount an individual purchases at his or her current income.
D) The amount, per time period, that is desired at a given price.
E) The amount, per time period, an individual desires and is able to purchase at the given price.

Question 46

Suppose that supply for some good increases and that simultaneously the demand for the same good decreases. The result would be

A) a decrease in P and an indeterminate change in Q.
B) no change in either P or Q.
C) an increase in Q and a decrease in P.
D) a decrease in Q and an indeterminate change in P.
E) an increase in Q and an increase in P.

Question 47

Assume that apples and oranges are substitute goods. Given the initial supply and demand curves for apples, a reduction in the price of oranges will tend to

A) increase the price of apples.
B) increase the demand for oranges.
C) decrease the price of apples
D) decrease the demand for oranges.
E) increase the demand for apples.

Question 48

Suppose that many coal mines are shut for environmental reasons. This will cause

A) a movement up the supply curve.
B) a decrease in the supply of coal (a leftward shift of the supply curve).
C) no change in the supply curve, only a change in price.
D) an increase in the supply of coal (a rightward shift of the supply curve).
E) a movement down the supply curve.

Question 49

Suppose that the price of wheat has fallen from $3 to $2 per bushel and that the price of newsprint has fallen from $200 to $100 per tonne. The relative price of wheat in terms of newsprint

A) has risen.
B) has fallen.
C) cannot be determined from the above data.
D) is completely unrelated.
E) remained constant.

Question 50

FIGURE 3- 5
Refer to Figure 3- 5. If supply were to increase and demand were to decrease simultaneously, this would lead to

A) an increase in Q and a decrease in P.
B) a decrease in P and an indeterminate change in Q.
C) no change in P or Q.
D) an increase in Q and an increase in P.
E) a decrease in Q and an indeterminate change in P.

Question 51

An equilibrium price is the

A) price that producers want to charge.
B) price in the middle of supply and demand.
C) price that consumers are willing to pay.
D) price at which quantity demanded of the commodity is equal to the quantity supplied.
E) price at which demand for the commodity is equal to supply.

Question 52

For a given commodity, quantity demanded can be represented by

A) a demand curve.
B) the price on the vertical axis.
C) a demand schedule.
D) a point on a demand curve.
E) the money value of the stock of the commodity held by households.

Question 53

FIGURE 3- 6
Refer to Figure 3- 6. If the initial demand and supply curves are D1 and S1, and demand shifts to
D2, then

A) a shortage will occur at any price above P3.
B) a permanent shortage of X will result.
C) a surplus of Q1Q3 will occur.
D) if price remained at P2, a shortage of Q1Q3 would exist.
E) all of the above

Question 54

Which of the following statements is correct for a market with an upward- sloping supply curve and a downward- sloping demand curve?

A) If the demand curve shifts left and the supply curve shifts left, equilibrium price will fall.
B) If the demand curve shifts right and the supply curve shifts left, equilibrium price will rise.
C) If the demand curve shifts left and the supply curve shifts right, equilibrium price will rise.
D) If the supply curve shifts right and the demand curve remains constant, equilibrium price will rise.
E) If the supply curve shifts left and demand remains constant, equilibrium quantity will rise.

Question 55

FIGURE 3- 6
Refer to Figure 3- 6. If the demand curve shifts from D1 to D2, while supply remains at S1, one could say that

A) there has been an increase in demand for X.
B) the price of a good which is a substitute for X must have fallen.
C) there is now an excess demand at the new price of P1.
D) the price increase has caused an increase in quantity demanded.
E) the quantity demanded has decreased to Q1 and price has fallen to P2.

Question 56

FIGURE 3- 1
Refer to Figure 3- 1. If demand is given by the curve D, the energy- efficient light bulbs is 200 000 at a price of $9.

A) demand for
B) quantity sold of
C) demand schedule for
D) quantity demanded of
E) quantity purchased of

Question 57

Suppose that some resource X is necessary to produce some good Y. If the price of X falls

A) there is a movement along the supply curve of good Y.
B) the demand curve for X shifts to the right.
C) the supply curve of good Y shifts to the right.
D) the supply curve of resource X shifts to the left.
E) the supply curve of good Y is unaffected.

Question 58

FIGURE 3- 6
Refer to Figure 3- 6. A shift in the supply curve from S2 to S1 might be caused by

A) a decrease in demand for X.
B) an improvement in the technology of producing good X.
C) additional suppliers entering the industry.
D) a rise in the costs of producing good X.
E) a decrease in the price of X.

Question 59

The "law of demand" describes

A) a direct relationship between the price of a good and the quantity of the good demanded per unit of time, ceteris paribus.
B) an inverse relationship between the price of a good and the demand for the good, per unit of time.
C) a direct relationship between the price of a good and the demand for the good.
D) any relationship between quantity demanded and demand for a good.
E) an inverse relationship between the price of a good and the quantity of the good demanded per unit of time, other things being equal.

Question 60

Weekend train travel costs less than weekday train travel. If the supply of train service remains the same between weekdays and weekends, then the most likely explanation for this difference in price is that the weekend

A) supply curve is to the right of the weekday supply curve.
B) demand curve is to the left of the weekday demand curve.
C) demand curve is random.
D) supply curve is to the left of the weekday supply curve.
E) demand curve is to the right of the weekday demand curve.

Question 61

The supply and demand schedules for the umbrella market are given below: $$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Price } & \text { Quantity Supplied } & \text { Quantity Demanded } \\\hline \$ 10 & 400 & 700 \\\hline \$ 15 & 500 & 650 \\\hline \$ 20 & 600 & 600 \\\hline \$ 25 & 700 & 550 \\\hline \$ 30 & 800 & 500 \\\hline\end{array}\\\text { TABLE } 3 - 2\end{array}$$

-Refer to Table 3- 2. At a price of there would be an excess of umbrellas.

A) $20; supply
B) $20; demand
C) $10; supply
D) $30; demand
E) $10; demand

Question 62

FIGURE 3- 5
Refer to Figure 3- 5. A price at which there would be a surplus in this market is

A) P1.
B) P2.
C) P3.
D) both P1 and P2.
E) both P1 and P3.

Question 63

Which of the following pairs of goods are likely to be complements for a large group of consumers?

A) tea and coffee
B) televisions and radios
C) televisions and DVD players
D) cars and trucks
E) tents and tent- trailers

Question 64

The term "supply" in a particular market refers to

A) the particular quantity supplied at the moment.
B) the quantity actually sold to consumers.
C) the entire relationship between quantity supplied and price.
D) only one point on the supply curve.
E) only one entry in a supply schedule.

Question 65

When deriving the market demand curve for a commodity, the only variable(s) that can change is (are) the

A) income of consumers.
B) price of a related commodity.
C) quantity of the commodity demanded.
D) price of the commodity.
E) both C and D.

Question 66

Ceteris paribus means

A) among other things.
B) other things being equal.
C) knowledge gained before the study of evidence is made.
D) and so forth.
E) in a historical context.

Question 67

The supply and demand schedules for dozens of roses are given below: $$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity Supplied per } \\\text { period }\end{array} & \begin{array} { l } \text { Quantity Demanded per } \\\text { period }\end{array} \\\hline \$ 10 & 200 & 500 \\\hline \$ 20 & 300 & 450 \\\hline \$ 30 & 400 & 400 \\\hline \$ 40 & 500 & 350 \\\hline \$ 50 & 600 & 300 \\\hline\end{array}\\\text { TABLE 3- } 1\end{array}$$

-Refer to Table 3- 1. At a price of _ there would be an excess _ of 300 dozen roses.

A) $30; supply
B) $10; supply
C) $10; demand
D) $30; demand
E) $50; demand

Question 68

The positive slope of a supply curve indicates that

A) as price goes up, quantity supplied will increase.
B) as price goes up, quantity supplied will remain constant.
C) as price goes up, quantity supplied will decrease.
D) consumers will want to buy less at higher prices.
E) if the costs of production increase, the quantity supplied will increase.

Question 69

A variable that is assumed to be constant along an individual's demand curve for good X is the

A) price of good X.
B) quantity of X demanded per unit of time.
C) consumer's real purchasing power.
D) amount of X the individual wishes to purchase.
E) price of a substitute good Y.

Question 70

To say that the demand curve for movies is negatively sloped means that

A) less quantity will be demanded at higher prices.
B) less quantity will be demanded as preferences change.
C) more quantity will be demanded as consumers' income increases.
D) less quantity will be demanded at lower prices.
E) less quantity will be demanded at the same price.

Question 71

A demand curve is a representation of the relationship, ceteris paribus, between quantity demanded and

A) supply.
B) price.
C) wealth.
D) income.
E) preferences.

Question 72

Consider the following two statements. (1) An increase in the price of eggs will cause a decrease in the demand for eggs. (2) An increase in the price of eggs will cause a decrease in the demand for bacon. In which of these two statements is the term "demand" used correctly?

A) neither statement
B) both statements
C) the first statement only
D) more information is needed
E) the second statement only

Question 73

The table below displays hypothetical demand and supply schedules for the market for overnight parcel deliveries in Canada. $$\begin{array}{l}\begin{array} { | l | l | l | l | l | l | } \hline & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (millions) }\end{array} & && \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (millions) }\end{array} & \\\hline \text { Price (\$) } & \text { Year 1 } & \text { Year 2 } & & \text { Year 1 } & \text { Year 2 } \\\hline & & & & \\\hline 30 & 80 & 95 && 140 & 125 \\\hline 26 & 90 & 105 & &135 & 120 \\\hline 22 & 100 & 115 && 130 & 115 \\\hline 18 & 110 & 125 & &125 & 110 \\\hline 14 & 120 & 135 && 120 & 105 \\\hline 10 & 130 & 145 & &115 & 100 \\\hline\end{array}\\\text { TABLE 3- } 3\end{array}$$

-Refer to Table 3- 3. The equilibrium price and quantity for overnight parcel delivery in Year 1 is
And million parcels.

A) $22; 115
B) $14; 120
C) $22; 130
D) $10; 115
E) $30; 80

Question 74

The supply and demand schedules for the umbrella market are given below: $$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Price } & \text { Quantity Supplied } & \text { Quantity Demanded } \\\hline \$ 10 & 400 & 700 \\\hline \$ 15 & 500 & 650 \\\hline \$ 20 & 600 & 600 \\\hline \$ 25 & 700 & 550 \\\hline \$ 30 & 800 & 500 \\\hline\end{array}\\\text { TABLE } 3 - 2\end{array}$$

-Refer to Table 3- 2. The equilibrium price for umbrellas is .

A) $15
B) $20
C) $30
D) $10
E) $25

Question 75

The supply for some good or service will decrease

A) if the prices of inputs increase.
B) if technology improves.
C) if more suppliers enter the industry.
D) if technology improves and the price of inputs falls.
E) if the prices of inputs fall.

Question 76

The demand for a given commodity will remain the same with a change in

A) population.
B) the price of the commodity.
C) tastes in favour of the commodity.
D) the distribution of income.
E) average household income.

Question 77

Cars and gasoline are likely to be

A) independent goods.
B) substitute goods.
C) complementary goods.
D) luxury goods.
E) inferior goods.

Question 78

The table below displays hypothetical demand and supply schedules for the market for overnight parcel deliveries in Canada. $$\begin{array}{l}\begin{array} { | l | l | l | l | l | l | } \hline & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (millions) }\end{array} & && \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (millions) }\end{array} & \\\hline \text { Price (\$) } & \text { Year 1 } & \text { Year 2 } & & \text { Year 1 } & \text { Year 2 } \\\hline & & & & \\\hline 30 & 80 & 95 && 140 & 125 \\\hline 26 & 90 & 105 & &135 & 120 \\\hline 22 & 100 & 115 && 130 & 115 \\\hline 18 & 110 & 125 & &125 & 110 \\\hline 14 & 120 & 135 && 120 & 105 \\\hline 10 & 130 & 145 & &115 & 100 \\\hline\end{array}\\\text { TABLE 3- } 3\end{array}$$

-Refer to Table 3- 3. Suppose the price of overnight parcel delivery in Year 1 is $22. Which of the following statements is correct? In Year 1

A) 115 million parcels will be delivered.
B) there is an excess demand of 30 million deliveries.
C) there is an excess supply of 30 million deliveries.
D) there is an excess demand of 15 million deliveries.
E) there is an excess supply of 15 million deliveries.

Question 79

FIGURE 3- 2
Refer to Figure 3- 2. A shift of the supply curve for energy- efficient light bulbs from S to S2 could be caused by

A) a change in preferences toward energy- efficient light bulbs.
B) the elimination of government subsidies to suppliers of energy- efficient light bulbs.
C) an increase in the number of suppliers.
D) a decrease in the price of energy- efficient light bulbs.
E) an increase in the price of energy- efficient light bulbs.

Question 80

An important assumption underlying a demand schedule is that

A) household tastes rarely change.
B) everything else except the product's price is being held constant.
C) quantity demanded and demand mean the same thing.
D) the numbers are not important; the general relationship between the variables is.
E) income has little significance to household demand.