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The Internet has created a new category in the book selling market,namely,the "barely used" book.How does the availability of barely used books affect the market for new books?


A) The demand curve for new books shifts to the right.
B) The demand curve for new books shifts to the left.
C) The supply curve for new books shifts to the right.
D) The supply curve for new books shifts to the left.

E) All of the above
F) B) and D)

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Following the successful launch of Red Bull in the Canadian market in 2004,companies such as Coca Cola,Pepsi,and many others have introduced products to compete with Red Bull.The energy drinks introduced to compete with Red Bull would be considered


A) complements to Red Bull.
B) substitutes for Red Bull.
C) inferior goods compared to Red Bull.
D) normal goods compared to Red Bull.

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

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If,for a product,the quantity supplied exceeds the quantity demanded,the market price will fall until


A) the quantity demanded exceeds the quantity supplied.The market will then be in equilibrium.
B) quantity demanded equals quantity supplied.The equilibrium price will then be lower than the market price.
C) all consumers will be able to afford the product.
D) quantity demanded equals quantity supplied.The market price will then equal the equilibrium price.

E) A) and D)
F) A) and C)

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Several studies have shown promising links between green tea consumption and cancer prevention.How will this affect the market for green tea?


A) The quantity of green tea demanded will increase because of a change in tastes in favour of green tea.
B) The green tea demand curve will shift to the right because of a change in tastes in favour of green tea.
C) The green tea demand curve will shift to the left because this new information will increase the price of green tea.
D) The quantity of green tea demanded will decrease because this new information will increase the price of green tea.

E) B) and D)
F) A) and B)

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Which of the following would cause an increase in the supply of cheese?


A) a decrease in the price of wine (assuming that cheese and wine are complements)
B) an increase in the price of cheese
C) an increase in the price of a product that producers sell instead of cheese
D) an increase in the number of firms that produce cheese

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

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If the price of potato chips falls,the substitution effect due to the price change will cause


A) an increase in the demand for potato chips.
B) an increase in the demand for corn chips,a substitute for potato chips.
C) an increase in the quantity of potato chips demanded.
D) a decrease in the quantity of potato chips demanded.

E) B) and C)
F) All of the above

Correct Answer

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Figure 3.14 Figure 3.14 Alt text for Figure 3.14: In figure 3.14,a graph plotting intersecting demand and supply curves represents the change in equilibrium point in the apple market with the decrease in the price of a substitute fruit,orange and the increase in the wages of apple workers. Long description for Figure 3.14: The x-axis is labelled,Quantity and the y-axis is labelled,Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve D2 is parallel with curve D1,but is plotted to the left.Curve S1 is a straight line which slopes up from the bottom right corner to the top left corner.Curve S2 is parallel to curve S1,but is plotted to the left.The 4 curves intersect at 4 points; A,B,on the right side of the lines,and C and D,on the left sides of the lines. -Refer to Figure 3.14.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D<sub>2</sub> and S<sub>2</sub> (point A) a positive change in the technology used to produce apples and decrease in the price of oranges,a substitute for apples B) an increase in the wages of apple workers and a decrease in the price of oranges,a substitute for apples C) an increase in the number of apple producers and a decrease in the number of apple trees as a result of disease D) a decrease in the wages of apple workers and an increase in the price of oranges,a substitute for apples E) .Which of the following changes would cause the equilibrium to change to point A? Alt text for Figure 3.14: In figure 3.14,a graph plotting intersecting demand and supply curves represents the change in equilibrium point in the apple market with the decrease in the price of a substitute fruit,orange and the increase in the wages of apple workers. Long description for Figure 3.14: The x-axis is labelled,Quantity and the y-axis is labelled,Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve D2 is parallel with curve D1,but is plotted to the left.Curve S1 is a straight line which slopes up from the bottom right corner to the top left corner.Curve S2 is parallel to curve S1,but is plotted to the left.The 4 curves intersect at 4 points; A,B,on the right side of the lines,and C and D,on the left sides of the lines. -Refer to Figure 3.14.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D2 and S2 (point


A) a positive change in the technology used to produce apples and decrease in the price of oranges,a substitute for apples
B) an increase in the wages of apple workers and a decrease in the price of oranges,a substitute for apples
C) an increase in the number of apple producers and a decrease in the number of apple trees as a result of disease
D) a decrease in the wages of apple workers and an increase in the price of oranges,a substitute for apples
E) .Which of the following changes would cause the equilibrium to change to point A?

F) C) and D)
G) None of the above

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If Canada removed the additional taxes it currently charges on French cheese,what would happen in the Canadian market for French cheese?


A) The supply curve would shift to the left.
B) The supply curve would shift to the right.
C) The demand curve would shift to the right.
D) The demand curve would shift to the left.

E) All of the above
F) B) and C)

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Many universities offer student bus passes (often included with student fees) in an effort to reduce demand for on campus parking.This means universities must believe that


A) bus passes and on campus parking are substitutes.
B) taking the bus is better for students.
C) students are bad at parking.
D) bus passes are normal goods.

E) A) and C)
F) All of the above

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The phrase "demand has increased" means that


A) a demand curve has shifted to the left.
B) there has been an upward movement along a demand curve.
C) there has been a downward movement along a demand curve.
D) a demand curve has shifted to the right.

E) B) and C)
F) A) and D)

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If the demand curve for a product shifts to the left and the supply curve for the product shifts to the left,the equilibrium quantity will decrease.

A) True
B) False

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"The price of compact LED lights fell because of improvements in production technology.As a result,the demand for incandescent light bulbs decreased.This caused the price of incandescent light bulbs to fall; as the price of incandescent light bulbs fell the demand for incandescent light bulbs decreased even further." Evaluate this statement.


A) The statement is false.A decrease in the price of compact LED lights would decrease the demand for incandescent light bulbs,but a decrease in the price of incandescent light bulbs would not cause the demand for incandescent light bulbs to decrease.
B) The statement is false because the demand for incandescent light bulbs would increase as the price of compact LED lights fell.
C) The statement is false because compact LED lights producers would not reduce their prices as a result of improvements in technology; doing so would reduce their profits.
D) The statement is false because it confuses the law of demand with the law of supply.

E) C) and D)
F) A) and B)

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If the price of automobiles was to increase,then


A) the demand for gasoline would decrease.
B) the demand for gasoline would increase.
C) the supply of gasoline would increase.
D) the quantity demanded of gasoline would decrease.

E) C) and D)
F) B) and C)

Correct Answer

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A movement along the demand curve for toothpaste would be caused by


A) a change in the price of toothbrushes.
B) a change in consumer income.
C) a change in the price of toothpaste.
D) a change in population.

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

Correct Answer

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Which of the following is evidence of a surplus of bananas?


A) Firms raise the price of bananas.
B) The price of bananas is lowered in order to increase sales.
C) The equilibrium price of bananas rises due to an increase in demand.
D) The quantity demanded of bananas is greater than the quantity supplied.

E) None of the above
F) A) and B)

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An increase in quantity supplied is represented by a rightward shift of the supply curve.

A) True
B) False

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Which of the following would shift the supply curve for energy drinks to the left?


A) a decrease in the expected future price of energy drinks
B) an increase in consumer income (assuming that energy drinks are normal goods)
C) a decrease in the number of firms that produce energy drinks
D) a decrease in the price of an input used to produce energy drinks

E) A) and D)
F) B) and C)

Correct Answer

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Currently,China buys more than 40% of the Canadian canola crop.In the summer of 2016 the Chinese government was planning to implement policies that would severely limit the ability of Canadian farmers to sell canola to China.If China were to stop buying Canadian canola what would happen in the market for Canadian canola?

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The demand curve for Canadian ...

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An inferior good is a good for which the quantity demanded increases as the price decreases,holding everything else constant.

A) True
B) False

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Figure 3.2 Figure 3.2 Alt text for Figure 3.2: In figure 3.2,a graph of the effect of an increase in the price of a complement on demand curve. Long description for Figure 3.2: The x-axis is labelled,Quantity,and y-axis is labelled,Price.Curve Demand,D1,is a straight line which slopes down from the top left corner to the bottom right corner.Curve D2 follows the same slope as curve D1,but is plotted to the right.2 points,A and B,are plotted in the middle of curve D1.A right pointing arrow indicates the change from curve D1 to curve D2. -Refer to Figure 3.2.A decrease in the expected future price of the product would be represented by a movement from A) A to B. B) B to A. C) D<sub>1</sub> to D<sub>2</sub>. D) D<sub>2 </sub>to D<sub>1</sub>. Alt text for Figure 3.2: In figure 3.2,a graph of the effect of an increase in the price of a complement on demand curve. Long description for Figure 3.2: The x-axis is labelled,Quantity,and y-axis is labelled,Price.Curve Demand,D1,is a straight line which slopes down from the top left corner to the bottom right corner.Curve D2 follows the same slope as curve D1,but is plotted to the right.2 points,A and B,are plotted in the middle of curve D1.A right pointing arrow indicates the change from curve D1 to curve D2. -Refer to Figure 3.2.A decrease in the expected future price of the product would be represented by a movement from


A) A to B.
B) B to A.
C) D1 to D2.
D) D2 to D1.

E) B) and C)
F) A) and D)

Correct Answer

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