Question 1

An increase in income will cause a rightward shift in the demand curve if the good is a normal good.

Accepted Answer

A) True 
 B)False

Question 2

An increase in the number of scholarships issued for university education would:

Accepted Answer

A)   increase the supply of education
B)   decrease the supply of education
C)   increase the demand for education
D)   decrease the demand for educationE) A) and B)
F) All of the above C

Question 3

In some countries the exchange rate with is set by the government. This is often below the market equilibrium exchange rate. How would this affect buyers and sellers of foreign currency?

Accepted Answer

If the price is below the market equilib...

Question 4

Generally, the market for ice-cream would be considered:

Accepted Answer

A)   a monopolistic market
B)   more organised than an auction
C)   a competitive market
D)   a market where individual sellers have significant pricing powerE) C) and D)
F) A) and B)

Question 5

If the demand for movies falls when income falls, then movies must be an inferior good.

Accepted Answer

A) True 
 B)False

Question 6

When an increase in the price of one good raises the demand for another good, the two goods are called complements.

Accepted Answer

A) True 
 B)False

Question 7

One reason why government taxes on cigarettes imposed on sellers reduces smoking is that:

Accepted Answer

A)   cigarette companies are successful in passing much of the tax on to consumers
B)   cigarette companies do not pass much of the tax on to consumers
C)   there are many good substitutes for cigarettes
D)   none of the above answers is correctE) C) and D)
F) A) and C)

Question 8

A demand curve:

Accepted Answer

A)   is always depicted as a straight line
B)   illustrates an inverse relationship between price and quantity demanded
C)   is upward sloping
D)   shows that when incomes rise people are willing to buy more of a goodE) All of the above
F) A) and B)

Question 9

If there is a shift of the demand curve, this is known as:

Accepted Answer

A)   a 'change in demand'
B)   a 'movement along the demand curve'
C)   a 'change in tastes'
D)   a 'change in taxation'E) C) and D)
F) B) and C)

Question 10

Which of the following would not shift the demand curve for beef?

Accepted Answer

A)   a reduction in the price of cattle farm fencing
B)   a change in the incomes of beef consumers
C)   an effective advertising campaign by pork producers
D)   a widely publicised study that indicates beef increases one's cholesterolE) A) and D)
F) B) and C)

Question 11

How important are prices in allocating resources in a market economy?

Accepted Answer

Prices play the key role in the allocati...

Question 12

In 1989 an international trade ban was announced for ivory. If people expected the price of ivory to rise after the ban, then their demand before the ban would:

Accepted Answer

A)   increase
B)   decrease
C)   be unchanged
D)   impossible to tellE) B) and C)
F) A) and C) A

Question 13

Which of the following would be an example of a monopoly?

Accepted Answer

A)   local cement companies
B)   a local petrol station in the country town
C)   a bakery in a large city
D)   a potato farmerE) A) and D)
F) B) and C)

Question 14

A change in the cost of producing a good will cause the supply curve of the good to shift.

Accepted Answer

A) True 
 B)False

Question 15

Why would Qantas be interested in the price of its competitors in the trans-Tasman air route?

Accepted Answer

Qantas's competitors are a sub...

Question 16

Graph 4-4
 1 could be caused by: A)  a decrease in the price of the good B)  an increase in cost of wages for the supplier C)  an increase in income D)  an improvement in technology" class="answers-bank-image d-inline" rel="preload" >
-Refer to Graph 4-4. On the graph, the movement from S to S1 could be caused by:

Accepted Answer

A)   a decrease in the price of the good
B)   an increase in cost of wages for the supplier
C)   an increase in income
D)   an improvement in technologyE) A) and B)
F) A) and C)

Question 17

The law of demand states that:

Accepted Answer

A)   price and quantity demanded are inversely related
B)   the larger the number of buyers in a market, the lower product price
C)   price and quantity demanded are directly related
D)   consumers will buy more of a given product at high prices than they will at low pricesE) A) and D)
F) All of the above

Question 18

Which of the following is NOT one of the steps in analysing how an event affects a market?

Accepted Answer

A)   determine the names of the market participants
B)   decide whether the curve shifts to the right or to the left
C)   determine whether the event shifts the supply, the demand, or both curves
D)   use a supply-demand diagram to examine how the shift(s)  affect the equilibriumE) B) and C)
F) A) and B)

Question 19

Many ivory carvers stockpiled ivory in the 1980s. A plausible explanation is:

Accepted Answer

A)   they wanted to supply more ivory carvings in the 1980s
B)   the technology to carve ivory had changed
C)   the demand for ivory fell in the 1980s
D)   they expected the price of ivory to rise in the next decadeE) A) and B)
F) All of the above

Question 20

Graph 4-3
 
-Refer to Graph 4-3. The movement from point A to point B on the graph is called:

Accepted Answer

A)   a decrease in supply
B)   an increase in supply
C)   a decrease in the quantity supplied
D)   an increase in the quantity suppliedE) B) and C)
F) A) and D) D

Exam 4: The Market Forces of Supply and Demand

An increase in income will cause a rightward shift in the demand curve if the good is a normal good.

Correct AnswerverifiedShow Answer

An increase in the number of scholarships issued for university education would:

Correct AnswerverifiedC

In some countries the exchange rate with is set by the government. This is often below the market equilibrium exchange rate. How would this affect buyers and sellers of foreign currency?

Correct AnswerverifiedIf the price is below the market equilib...View AnswerShow Answer

Generally, the market for ice-cream would be considered:

Correct AnswerverifiedShow Answer

If the demand for movies falls when income falls, then movies must be an inferior good.

Correct AnswerverifiedShow Answer

When an increase in the price of one good raises the demand for another good, the two goods are called complements.

Correct AnswerverifiedShow Answer

One reason why government taxes on cigarettes imposed on sellers reduces smoking is that:

Correct AnswerverifiedShow Answer

A demand curve:

Correct AnswerverifiedShow Answer

If there is a shift of the demand curve, this is known as:

Correct AnswerverifiedShow Answer

Which of the following would not shift the demand curve for beef?

Correct AnswerverifiedShow Answer

How important are prices in allocating resources in a market economy?

Correct AnswerverifiedPrices play the key role in the allocati...View AnswerShow Answer

In 1989 an international trade ban was announced for ivory. If people expected the price of ivory to rise after the ban, then their demand before the ban would:

Correct AnswerverifiedA

Which of the following would be an example of a monopoly?

Correct AnswerverifiedShow Answer

A change in the cost of producing a good will cause the supply curve of the good to shift.

Correct AnswerverifiedShow Answer

Why would Qantas be interested in the price of its competitors in the trans-Tasman air route?

Correct AnswerverifiedQantas's competitors are a sub...View AnswerShow Answer

Graph 4-4 -Refer to Graph 4-4. On the graph, the movement from S to S1 could be caused by:

Correct AnswerverifiedShow Answer

The law of demand states that:

Correct AnswerverifiedShow Answer

Which of the following is NOT one of the steps in analysing how an event affects a market?

Correct AnswerverifiedShow Answer

Many ivory carvers stockpiled ivory in the 1980s. A plausible explanation is:

Correct AnswerverifiedShow Answer

Graph 4-3 -Refer to Graph 4-3. The movement from point A to point B on the graph is called:

Correct AnswerverifiedD

Correct Answer
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C

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If the price is below the market equilib...
View Answer

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Prices play the key role in the allocati...
View Answer

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A

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Correct Answer
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Correct Answer
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Qantas's competitors are a sub...
View Answer

Graph 4-4 -Refer to Graph 4-4. On the graph, the movement from S to S₁ could be caused by:

Correct Answer
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Correct Answer
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D