Q36. A supply curve is defined as the relationship between

A.

the price of a good and the quantity that consumers are willing to buy.

B.

the income of consumers and the quantity of a product that consumers are willing to buy.

C.

the price of a good and the quantity that producers are willing to sell.

D.

the income of consumers and the quantity of a product that producers are willing to sell.

Q37. Which of the following statements isINCORRECT?

A.

The price elasticity of demand tends to be greater when a product accounts for a smaller portion of theconsumer's budget.

B.

The price elasticity of demand tends to be greater for a specific brand of a product than for a product in general.

C.

The price elasticity of demand tends to be smaller when consumers have less time to adjust to price changes.

D.

The price elasticity of demand tends to be greater for a product with more substitutes available.

Q38. Recall the Application about the decrease in the price of wool in the 1990s to answer the followingquestion(s). In the1990s, the world price of wool decreased by about 30 percent and prices have remained relatively low since then. In2012, an organization in New Zealand proposed that sheep shearing be added to the Commonwealth Games and the Olympics as a spectator sport in an effort to increase the awareness and the demand for wool.

Recall the Application. As the world price of wooldecreased, the quantity of wool supplied by individual ranchers would________, and the quantity supplied in the whole market would________.

A.

increase; increase

B.

increase; decrease

C.

decrease; increase

D.

decrease; decrease

Q39. The difference between the maximum amount that a consumer is willing to pay for a product and the price that is paid for the productdescribes:

A.

the cost of producing a unit of the product.

B.

producer surplus.

C.

marginal utility.

D.

consumer surplus.

Q40. Goods are considered to be complements when there is a

A.

negative relationship between the quantity demanded of one good and the price of that good.

B.

positive relationship between increased income and the quantity demanded.

C.

negative relationship between the quantity demanded of one good and the price of another.

D.

positive relationship between the quantity demanded of one good and the price of another.

Q41Suppose that the quantity demanded for cars exceeds the quantity supplied of cars. We would expect that

A.

the price of cars will increase.

B.

the price of cars will decrease.

C.

the demand will decrease(demand will shift to theleft) to meet the supply.

D.

the supply will increase(supply will shift to theright) to meet the demand.

Q42. Suppose that the bakers of bread face a decrease in the price of flour(an input). In the market forbread, this will cause the________ and the equilibrium price to________.

A.

demand for bread todecrease; increase

B.

supply of bread todecrease; increase

C.

demand for bread toincrease; increase

D.

supply of bread toincrease; decrease

Q43. If the quantity demanded of peanut butter falls by12% when income rises by10%, then peanut butteris:

A.

an inferior good.

B.

a normal good.

C.

a necessity.

D.

both A and C.

Q44. Suppose the market price for a cup of coffee is$1.25. If CoffeeExpress's marginal cost of making that cup of coffee is$0.75, its producer surplus from that cup of coffeeis:

A.

$0.75.

B.

$0.50.

C.

$1.50.

D.

$1.25.

Q45. Recall the Application about the decrease in taxes on cigarettes in several Canadian provinces in 1994 to answer the followingquestion(s).

Recall the Application. The change in demand for cigarettes resulting from the decrease in taxes would normallycreate, ceteris paribus,

A.

a decrease in their supply.

B.

an increase in their quantity supplied.

C.

a decrease in their quantity supplied.

D.

an increase in their supply.