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What is the difference between an "increase in demand" and an "increase in quantity demanded"?


A) There is no difference between the two terms; they both refer to a shift of the demand curve.
B) An "increase in demand" is represented by a rightward shift of the demand curve while an "increase in quantity demanded" is represented by a movement along a given demand curve.
C) There is no difference between the two terms; they both refer to a movement downward along a given demand curve.
D) An "increase in demand" is represented by a movement along a given demand curve, while an "increase in quantity demanded" is represented by a rightward shift of the demand curve.

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

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If consumers believe the price of iPads will decrease in the future, this will cause the demand for iPads to decrease now.

A) True
B) False

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A change in supply is represented by a shift of the supply curve.

A) True
B) False

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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 B)
F) A) and C)

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If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase.

A) True
B) False

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Which of the following is expected to occur as the baby-boom generation ages?


A) The demand for baby clothes should increase.
B) The demand for prescription drugs should decrease.
C) The demand for medical services should increase.
D) The demand for larger houses should increase.

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

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At auction experts expect a Jacques Plante hockey card to get a higher price than Sidney Crosby's rookie card.Which of the following events would cause the price difference in these cards to get smaller?


A) The demand for Crosby cards decreases.
B) The supply of Crosby rookie cards increases.
C) The demand for Crosby rookie cards increases and the supply of Plante cards increases.
D) The demand for Crosby rookie cards decreases and the demand for Plante cards increases.

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

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Figure 3.7 Figure 3.7 -Refer to Figure 3.7.Assume that the graphs in this figure represent the demand and supply curves for Fruitopia, a soft drink.Which panel describes what happens in the market for Fruitopia when the price of Snapple, a substitute product, decreases? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d) -Refer to Figure 3.7.Assume that the graphs in this figure represent the demand and supply curves for Fruitopia, a soft drink.Which panel describes what happens in the market for Fruitopia when the price of Snapple, a substitute product, decreases?


A) Panel (a)
B) Panel (b)
C) Panel (c)
D) Panel (d)

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

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Auctions in recent years have resulted in higher prices paid for Jacques Plante (goalie) hockey cards than Sidney Crosby (forward) rookie cards.What is a reason for this difference in price?


A) There is a surplus of Plante hockey cards and a shortage of Crosby rookie cards.
B) Many people are more fascinated by hockey goalies than by hockey forwards.
C) There are more Crosby rookie cards available for collectors to buy than there are Plante cards.
D) Plante was the first goalie to wear a mask in a game; the demand for his cards rose as wealthy former goalies attempted to buy them as thanks for still having teeth.

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

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Table 3.1  Loose Leaf Tea  Price per kg.  (dollars)   Sunil’s  Quantity  Demanded  (kgs)   Mia’s  Quantity  Demanded  (kgs)   Rest of Market  Quantity  Demanded  (kgs)   Market  Quantity  Demanded  (kgs)  $840306724059351412564315890\begin{array}{|c|c|c|c|c|}\hline \begin{array}{c}\text { Loose Leaf Tea } \\\text { Price per kg. } \\\text { (dollars) }\end{array} & \begin{array}{c}\text { Sunil's } \\\text { Quantity } \\\text { Demanded } \\\text { (kgs) }\end{array} & \begin{array}{c}\text { Mia's } \\\text { Quantity } \\\text { Demanded } \\\text { (kgs) }\end{array} & \begin{array}{c}\text { Rest of Market } \\\text { Quantity } \\\text { Demanded } \\\text { (kgs) }\end{array} & \begin{array}{c}\text { Market } \\\text { Quantity } \\\text { Demanded } \\\text { (kgs) }\end{array} \\\hline \$ 8 & 4 & 0 & 30 & \\\hline 6 & 7 & 2 & 40 & \\\hline 5 & 9 & 3 & 51 & \\\hline 4 & 12 & 5 & 64 & \\\hline 3 & 15 & 8 & 90 & \\\hline\end{array} -Refer to Table 3.1.The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia) and the rest of the market.At a price of $5, the quantity demanded in the market would be


A) 51 kgs.
B) 63 kgs.
C) 76 kgs
D) 146 kgs.

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

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The income effect of a price change refers to the impact of a change in


A) income on the price of a good.
B) demand when income changes.
C) the quantity demanded when income changes.
D) the price of a good on a consumer's purchasing power.

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

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An increase in the demand for lobster due to changes in consumer tastes, accompanied by a decrease in the supply of lobster as a result of bad weather reducing the number of fishermen trapping lobster, will result in


A) a decrease in the equilibrium quantity of lobster and no change in the equilibrium price.
B) an increase in the equilibrium price of lobster and no change in the equilibrium quantity.
C) an increase in the equilibrium price of lobster; the equilibrium quantity may increase or decrease.
D) a decrease in the equilibrium quantity of lobster; the equilibrium price may increase or decrease.

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

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In 2011, floods prevented many prairie farmers from planting their wheat crops.How did this affect the market price and market quantity of wheat?

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The supply curve for wheat shi...

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An increase in the quantity of a product supplied is caused by an increase in the price of the product.

A) True
B) False

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In October, market analysts predict that the price of platinum will fall in November.What happens in the platinum market in October, holding everything else constant?


A) The supply curve shifts to the right.
B) The supply curve shifts to the left.
C) The quantity demanded and the quantity supplied of platinum increase.
D) The demand curve shifts to the right.

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

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Figure 3.7 Figure 3.7 -Refer to Figure 3.7.Assume that the graphs in this figure represent the demand and supply curves for bicycle helmets.Which panel best describes what happens in this market if there is a substantial increase in the price of bicycles? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d) -Refer to Figure 3.7.Assume that the graphs in this figure represent the demand and supply curves for bicycle helmets.Which panel best describes what happens in this market if there is a substantial increase in the price of bicycles?


A) Panel (a)
B) Panel (b)
C) Panel (c)
D) Panel (d)

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

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

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In 2011, floods damaged the Canadian wheat and barley crops.In the market for grains


A) the supply curve shifted to the right resulting in an increase in the equilibrium price.
B) the supply curve shifted to the left resulting in an increase in the equilibrium price.
C) the demand curve shifted to the right resulting in an increase in the equilibrium price.
D) the demand curve shifted to the left resulting in a decrease in the equilibrium price.

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

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Which of the following would shift the supply curve for MP3 players to the right?


A) an increase in the price of a substitute in production
B) an increase in consumer income (assuming that all MP3 players are normal goods)
C) a decrease in the number of firms that produce MP3 players
D) a decrease in the price of an input used to produce MP3 players

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

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Which of the following will shift the demand curve for a good?


A) a change in the technology used to produce the good
B) an increase in the price of the good
C) a decrease in the price of a complementary good
D) a decrease in the price of the good

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

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