Large gold deposits are discovered in northern Canada. What is the effect on 1.

Question

Large gold deposits are discovered in northern Canada. What is the effect on 1. Demand, 2. Supply, 3.price and 4. Quantity respectively, in the gold market?

a) 1. does not change, 2. decreases, 3. increases, 4. decreases

b) 1. increases, 2. Does not change 3. increases, 4. Increases

c) 1. Does not change, 2. Does not change, 3. Does not change, 4. Increases

d) 1. Does not change, 2. Increases, 3. Decreases, 4 increases

e) 1. Decreases, 2. Increases, 3. Does not change, 4. Does not change

3. There is increasing concern by consumers about physical fitness. Also, the price of gasoline falls. What is the effect on 1. Demand, 2. Supply, 3.price and 4. Quantity respectively for the bike market?

a) 1. Increases, 2 does not change, 3. Decreases, 4 decreases

b) 1. Uncertain, 2. Does not change, 3. Uncertain, 4. Uncertain

c). 1.Increases, 2 does not change, 3. Increases, 4. Increases

d) 1.uncertain, 2.increases, 3.uncertain, 4. Uncertain

e) 1. Decreases, 2. Increases, 3. Decreases, 4. Decreases

4. The population of drinking age increases; also, brewery unions negotiate a big increase in wages. What is the effect on 1. Demand, 2. Supply, 3. Price and 4. Quantity respectively, in the beer market?

a) 1. Decreases, 2. Decreases, 3. Decreases, 4 uncertain

b) 1. Increases, 2 decreases, 3. Increases, 4. Increases

c) 1. Increases, 2 decreases, 3. Increases, 4. Decreases

d) 1 increases, 2.uncertain, 3. Uncertain, 4.uncertain

e) 1. Increases, 2. Decreases, 3.increases, 4.uncertain

5. House prices are expected to rise significantly in the near future. What is the effect on 1. Demand, 2. Supply, 3. Price and 4. Quantity respectively in the housing market?

a) 1. does not change, 2. Decreases, 3 increases, 4 decreases

b) 1 increases, 2. Increases, 3. Increases, 4. Uncertain

c) 1. Increases, 2 does not change, 3 increases, 4 increases

d) 1. Increases, 2, decreases, 3 increases, 4 uncertain

e) 1 increases, 2 increases, 3. Increases, 4.increases

Explanation / Answer

2) Option D. Because there are gold deposits discovered this will increase the supply of gold. The supply curve will shift to the right and the price will decrease while the quantity will increase.

3) Option B. because there is a concerned about fitness the demand for bikes will decrease while at the same time cheaper gasoline will increase the demand for bike. We see that there is uncertain change in the demand and no change in the supply and hence everything remains uncertain.

4) Option E. Increased population will increase the demand for beer and increased wage bill will decrease the supply. Hence demand shifts to the right, supply shifts to the left, quantity change is uncertain and price rises

5) Option C

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