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Microeconomics: Canada in the Global Environment - CH 03 Supply and Demand - Test Bank.pdf

36 Pages
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Department
Economics
Course Code
ECON 1050
Professor
Pat Martin

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University of LethbridgeDepartment of EconomicsECON 1012Introduction to MicroeconomicsInstructorMichael G LanyiChapter 3Demand and Supply1The relative price of a good is all of the following exceptAthe money price of the good divided by a price indexBan opportunity costCthe ratio of one price to anotherDthe same as the money price of a goodEdetermined in a marketTopicMarkets and Prices2How many sides does a market haveAone sidebuyersBone sidesellersCtwo sidesdomestic and foreignDtwo sidesbuyers and sellersEthree sidesbuyers sellers and the governmentTopicMarkets and Prices3Which market is an example of a market for goodsAlabour marketBhaircut marketCenergy marketDmanufactured input marketEapple marketTopicMarkets and Prices4Which market is an example of a market for servicesAmanufactured input marketBorange marketClabour marketDtennis lessons marketEenergy marketTopicMarkets and Prices5Which market is an example of a resource marketAfurniture marketBlabour marketCautomobile marketDhaircut marketEapple marketTopicMarkets and Prices6The demand and supply model determinesAmoney pricesBdemand pricesCsupply pricesDabsolute pricesErelative pricesTopicMarkets and Prices1Use the table below to answer the following questionsTable 311YearCoffee PriceTea PriceCola Price2007125110080200815010010020091251201007Refer to Table 311 In 2007 the relative price of coffee in terms of tea isA125B110C088D114E100TopicMarkets and Prices8Refer to Table 311 In 2009 the relative price of coffee in terms of cola isA100B156C125D067Eunknown without more informationTopicMarkets and Prices9Refer to Table 311 In 2009 the relative price of cola in terms of tea isA100B120C125D083Eunknown without more informationTopicMarkets and Prices10Refer to Table 311 Between 2007 and 2008 the price of coffee relative to the price of teawhile the price of coffeerelative to the price of cola Afell roseBfell stayed constantCrose roseDrose fellEfell fellTopicMarkets and Prices11Refer to Table 311 Between 2008 and 2009 the price of coffee relative to the price of teawhile the price of coffeerelative to the price of cola Afell fellBfell stayed constantCrose fellDfell roseErose roseTopicMarkets and Prices212A market where no single buyer or seller can influence the price isAa buyers marketBa competitive marketCan output marketDan input marketEa sellers marketTopicMarkets and Prices13A relative price isAan opportunity costBthe ratio of one price to anotherCdetermined by demand and supplyDa quantity of a basket of goods and services forgoneEall of the aboveTopicMarkets and Prices14William Gregg owned a mill in South Carolina In December 1862 he placed a notice in the Edgehill Advertister announcinghis willingness to exchange cloth for food and other items Here is an extract1 yard of cloth for 1 pound of bacon2 yards of cloth for 1 pound of butter4 yards of cloth for 1 pound of wool8 yards of cloth for 1 bushel of saltIf the money price of bacon was 20 a pound and the money price of salt was 200 a bushel people would Abuy bacon and trade it for cloth and then trade the cloth for salt because salt is more important for life than either clothor baconBnot buy bacon and trade it for cloth because they would have to buy 8 yards of cloth for 160 and then give Mr Greggan extra 040 to buy a bushel of saltCnot buy bacon and trade it for cloth because the relative price of 1 bushel of salt is only 18 yard of clothDbuy bacon and trade it for cloth because cloth is more expensive than baconEbuy bacon and trade it for cloth because they could buy 8 yards of cloth for only 160 and use that cloth to obtain abushel of saltTopicMarkets and Prices15The law of demand states that other things remaining the sameAthe higher the price of a good the greater is the quantity demandedBthe higher the price of a good the smaller is the quantity demandedCthe higher the price of a good the smaller is the quantity suppliedDas income increases willingness to pay for the last unit increasesEprice and quantity supplied are positively relatedTopicDemand16Which one of the following events shifts the demand curve for grape jelly to the rightAan increase in income if grape jelly is a normal goodBa decrease in the price of strawberry preserves a substitute for grape jellyCa decrease in the price of grape jellyDa decrease in the populationEan increase in the price of peanut butter a complement of grape jellyTopicDemand3
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