Chapter 2 supply and demand

b increases product supply

a government subsidy to the producers of a product a) reduces product supplu b) increases product supply c) reduces product demand d) increases product demand

c at some point costs will rise

which of the following does not explain the law of demand a) income effect b) law of diminishing marginal utility c) at some point costs will rise d) common sense

a consumer income have declined and consumers now want to buy less eggs (eggs is a normal good)

a shift to the left in the demand curve for eggs can be reasonably explained by saying that a) a consumer income have declined and consumers now want to buy less eggs b) the price of eggs have increased and as a result consumers want to purchase less of it c) consumer preferences have changed in favor of eggs d) the price of eggs has declined and as a result consumers want to purchase more of it

c shortages

all of the following are consequences of price floors except a) inefficient use of resources b) surpluses c) shortages d) waste of tax dollars

a a decrease in number of buyers

all of the following cause the demand curve to shift right except increase in demand a) a decrease in number of buyers b) an increase in income good is normal c) change in taste or preference that is favorable d) increase in number of buyers

b a change in resource prices

all of the following will cause a change in demand for a product except a) a change in the price of a related good b) a change in resource prices c) a change in income if the good is normal or inferior d) a change in consumer expectations

c a change in the number of buyers

all of the following will cause a change in supply for a product except a) a change in tech b) the price of an alternative good or other good c) a change in the number of buyers d) an increase or decrease in subsidy

c rise the supply of bread to decrease and the demand for potatoes to increase

assume a drought in cali reduces the supply of grains grain is a basic ingredient in the production of bread and potatoes are a substitute for bread. We would expect the price of grain to a) decrease the supply of bread to increase and the demand for potatoes to increase b) rise the supply of bread to decrease and the demand for potatoes to decrease c) rise the supply of bread to decrease and the demand for potatoes to increase d) increase the supply of bread to increase and the demand for potatoes to increase

a true

changes in demand have nothing to do with the price of a roudct or service changing a) true b) false

a true

changes in supply have nothing to do with the price of a product or service changing a) true b) false

a price floors price ceilings

government set prices refer to a)price floors price ceilings b) equilibrium prices c) the rate of inflation d) relative price and opportunity cost

b there will be a shift of the supply curve to the left

if producers or suppliers expect future prices to be lower a) increase equilibrium price b) there will be a shift of the supply curve to the left c) there will be a shift of the supply curve to the right d) shift the demand curve to the left

b supply to shift left

if workers demand a raise in wages this will likely cause a) supply to shift right b) supply t shift left c) demand to shift right d) demand to shift left

d surpluses

look at picture 3 all of the following are consequences of price ceilings except a) rationing b) black markets c) shortages d) surpluses

b three dollars

look at picture 3 equilibrium price will be a) four dollars b) three dollars c) two dollars d) one dollars

b increasing prices of the product and service

markets naturally correct shortages by a) deceasing prices of the product and service b) increasing prices of the product and service c) keeping prices stable of the product and service

a decreasing prices of the product and serivce

markets naturally correct surpluses by a) decreasing prices of the product and service b) increasing prices of the product and service c) keeping prices stable of the product and service

b the price of the product changing

movement along the supply or the demand curve is caused by a) favorable change in taste or preference b) the price of the product changing c) the prices of related goods d) consumers income increasing or decreasing

d the price of corn has increased or decreased

newspaper headline change in quantity supplied of corn this headline indicates a) the number of sellers in the market increased or decreased b) resource prices changed c) sales expectations have changed d) the price of corn has increased or decreased

b false because it creates unintended consequences

price floors price ceilings interest rate lids agriculture price support---all terms for artificially setting prices are advantageous in a free market economy a) true because it corrects markets b) false because it creates unintended consequences c) false because it only helps producers d) true because it prevents inflation

a move from point x to point y

refer to diagram 1 on phone an increase in quantity demanded is depicted by a a) move from point x to point y b) shift from d1 to d2 c) shift from d2 to d1 d) move from point y to point x

c price c

refer to diagram 5 a government set price ceiling is best illustrated by a) price a b) price b c) price c d) quantity e

a price a

refer to diagram 5 a government set price floor is best illustrated by a) price a b) price b c) price c d) quantity E

b decrease in the price of stadium parking

refer to diagram 6 which shows demand and supply conditions in the competitive market for football tickets a shift in the demand curve from d1 to d0 might be caused by a) decrease in income b) decrease in the price of stadium parking c) decrease in number of buyers d) increase in the price of concession food

c increase in a tax on football tickets

refer to diagram 6 which shows demand and supply conditions in the competitive market for football tickets other things equal a shift of the supply curve from SO to S1 might be caused by a) increase in a subsidy to team owners b ) increase in number of sellers c) increase in a tax on football tickets d) decrease in wage rate for stadium workers

c shift from d2 to d1

refer to the diagram 1 on phone a decrease in demand is depicted by a a) move from point x to point y b) shift from d1 to d2 c) shift from d2 to d1 d) move from point y to point x

a move from point y to point x

refer to the diagram 2 an increase in quantity supplied is depicted by a a) move from point y to point x b)shift from s1 to s2 c) shift from s2 to s1 d) move from point x to point y

c shift from s2 to s1

refer to the diagram 2 on phone a decrease in supply is depicted by a a) move from point x and point y b) shift from s1 to s2 c) shift from s2 to s1 d) move from point y to point x

b is above the equilibrium level

refer to the diagram 4 if there is a surplus of a product its price a) is below the equilibrium level b) is above the equilibrium level c) will rise in the near future d) is in equilibrium

a one dollar and 200

refer to the diagram 4 the equilibrium price and quantity in this market will be a) one dollar and 200 b) 1.60 and 130 c) fifty cents and 130 d) 1.60 and 290

c supply curve

the curve that illustrates a positive direct relationship a) demand curve b) equilibrium curve c) supply curve

c price and quantity demanded

the demand curve shows the buyers intentions in regards to a) money income and quantity demanded b) price and production costs c) price and quantity demanded d) consumer tastes and quantity demanded

c consumers will purchase less of a good at high prices than at low prices

the law of supply indicates that all things equal a) as price increases quantity supplied increases b) the product supply curve is downward sloping c) consumers will purchase less of a good at high prices than at low prices d) producers will offer more of a product at low prices than at high prices

b law of diminishing marginal utility

the notion that each additional unit of a product yields less utility best describes a) substation effect b) law of diminishing marginal utility c) equilibrium point

c voluntary exchange

tickets scalping illustrates the following economic principle a) marginal analysis b) the law of diminishing marginal utility c) voluntary exchange d) income effect

c costs may rise and incentive

what explains the law of supply a) income effect b)law of diminishing marginal utility c) costs may rise and incentive d) substitution effect

a the demand curve shifts left

what happens in the market for airline travel when the price of traveling by rail decreases a) the demand curve shifts left b) the demand curve shifts right c) the supply curve shifts left d) the supply curve shifts right

b real

when prices decrease _________________ income increases a) nominal b) real c) nominal and real

c the substitution effect

when the price of Seattle's best coffee dropped, coffee drinkers purchased more cups of Seattles best and fewer cups of Starbucks this can best describe a) the income effect b) a change in coffee supply for Seattles best c) the substation effect d) the concept of marginal analysis

b a reduction in the price of cattle feed, a resource price

which of the following would not shift the demand curve for beef a) a widely publicized study that indicated beef increases one's cholesterol b) a reduction in the price of cattle feed a resource price c) a change in the incomes of beef consumers d) an increase in the number of beef buyers