Pick the correct multiple choice for each question

Question 1

A large gas station sells 8.5 million litres of gas a month at a price of $0.06 per litre. If the station's owners raise their prices to $0.70 per litre, the quantity demanded by the station's customers falls to 8 million litres. What (approximately) is the coefficient of demand?

a. .67

b. 2.54

c. .39

d. 1.35

Question 2

Assume that the market price of steel rises from $135 per tonne to $150. The manufacturer expands production immediately from 2.25 million tonnes a day to 2.5 million tonnes per day. What is (approximately) the coefficient of supply?

a. .9

b. 1.2

c. 1.0

d.68

Question 3

Assume that you are wearing a slimmer style of jeans because your friends are buying and wearing that style. Which of the following determinants of supply/supply elasticity of demand/demand elasticity applies?

a. Changes in buyers' future expectations

b. Product substitutability

c. Product cost in relation to income

d. Changes in buyers' tastes

Question 4

North American automobile companies announce their intent to introduce another assembly shift to increase production at certain manufacturing facilities (in response to increased demand for cars). Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

a. Passage of time

b. Feasibility and cost of storage

c. Product substitutability

d. Characteristics of the production process

Question 5

Assume that the cost of fabric has decreased in the fabric store where you work, allowing you to sell curtains at a cheaper price. Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

Question 6

Assume that your parents are planning to purchase a house in two years, but realize that house prices are rising more quickly than they forecast. Therefore, they have decided to buy a house now. Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

a. Changes in the prices of related commodities

b. Product cost in relation to income

c. Changes in income

d. Changes in buyers' future expectations

Question 7 The summer of 2017 proves to be wet and cloudy across Ontario for crops. Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

a. Changes in the number of producers

b. Passage of time

c. Changes in the natural conditions of production

d. Changes in income

Question 8

In view of high wheat prices in 2016, farmers in Western Canada intend to plant more wheat in 2017. Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

a. Changes in the prices of related commodities

b. Characteristics of the production process

c. Passage of time

d. Changes in technology

Question 9

The price of corn rises dramatically with the demand for corn related food products and so farmers plant more corn. Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

a. Passage of time

b. Characteristics of the production process

c. Changes in technology

d. Changes in the prices of related commodities

Question 10

A new farmer's market opens in the Grand Bend area where you and your friends often go for a swim. Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

a. Feasibility and cost of storage

b. Changes in the number of producers

c. Characteristics of the production process

d. Changes in the prices of related commodities

Question 11 You were recently hired for part time hours for $13 per hour and can now afford more trendy clothing. Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

a. Changes in buyers' tastes

b. Changes in the size of markets

c. Changes in government policy regarding taxes and subsidies

d. Changes in income

Question 12

The federal government introduces a lower corporate income tax for Canadian businesses. Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

a. Changes in the size of markets

b. Changes in the prices of related commodities

c. Changes in producers' expectations regarding future prices and costs

d. Changes in government policy regarding taxes and subsidies

Question 13 The decrease in the value of the Canadian dollar means higher prices for imports from the United States for Canadian manufacturers wishing to buy new equipment. Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

a. Changes in the prices of related commodities

b. Changes in producers' expectations regarding future prices and costs

c. Changes in government policy regarding taxes and subsidies

d. Changes in the size of markets

Question 14

The Ontario government introduces a new minimum wage which increases prices for fast food. Which of the following determinants. of supply/supply elasticity or demand/demand elasticity applies?

a. Changes in income

b. Changes in the number of producers

c. Changes in the prices of factors of production

d. Changes in the size of markets

Question 15

Rising cocoa prices increase the price of chocolate in all products. Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

a. Changes in buyers' tastes

b. Whether products are necessities or luxuries

c. Passage of time

d. Product substitutability

Question 16.

Corn prices drop in the autumn before harvest and many farmers decide to sell their harvested corn during the following spring season. Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

a. Characteristics of the production process

b. Passage of time

c. Feasibility and cost of storage

d. Changes in income

Question 17

The price of apples has risen while the price of pears has dropped. Which of the following determinants of supply/supply elasticity or demand/demand elasticity applies?

a. Changes in technology

b. Passage of time

c. Changes in the prices of related commodities

d. Characteristics of the production process

Question 18

A pencil is an _____ item that is a/an ______ item and a______ part of most budgets.

a. inelastic, essential, small

b. inelastic, non-essential, small

c. elastic, essential, big

d. elastic, non-essential, big

Question 19

A steak is an _______ item that is a/an ________meat; therefore, substitutes are available if prices rise.

a. elastic, non-essential, other

b. inelastic, non-essential, other

c. inelastic, essential, no other

d. elastic, essential, no other

Question 20