chapter 4-- eco 2023

Which of the following would cause price to decrease? a. a surplus of the good b. an increase in demand c. a shortage of the good d. a decrease in supply

a. a surplus of the good

Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause a(n) a. decrease in the demand for printers and a decrease in the quantity supplied of printers. b. decrease in the supply of printers and a decrease in the quantity demanded of printers. c. increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers. d. decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers.

a. decrease in the demand for printers and a decrease in the quantity supplied of printers.

Which of the following events must cause equilibrium price to rise? a. demand decreases and supply increases b. demand and supply both decrease c. demand increases and supply decreases d. demand and supply both increase

c. demand increases and supply decreases

At the equilibrium price, the quantity of the good that buyers are willing and able to buy a. is greater than the quantity that sellers are willing and able to sell. b. exactly equals the quantity that sellers are willing and able to sell. c. is less than the quantity that sellers are willing and able to sell. d. Either a) or c) could be correct.

b. exactly equals the quantity that sellers are willing and able to sell.

If a decrease in income increases the demand for a good, then the good is a(n) a. complementary good. b. inferior good. c. normal good. d. substitute good.

b. inferior good.

New oak tables are normal goods. What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the price of the glue used in the production of the new oak tables increased? a. Quantity will rise, and the effect on price is ambiguous. b. Price will fall, and the effect on quantity is ambiguous. c. Price will rise, and the effect on quantity is ambiguous. d. Quantity will fall, and the effect on price is ambiguous.

c. Price will rise, and the effect on quantity is ambiguous.

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages? a. Quantity will rise, and the effect on price is ambiguous. b. Price will fall, and the effect on quantity is ambiguous. c. Quantity will fall, and the effect on price is ambiguous. d. Price will rise, and the effect on quantity is ambiguous.

c. Quantity will fall, and the effect on price is ambiguous.

Which of the following would most likely serve as an example of a monopoly? a. a restaurant in a large city b. a dry cleaners in a large city c. a local electrical company d. a local gas station

c. a local electrical company

A improvement in production technology will shift the a. demand curve to the right. b. demand curve to the left. c. supply curve to the right. d. supply curve to the left.

c. supply curve to the right.

A shortage exists in a market if a. there is an excess supply of the good. b. quantity supplied exceeds quantity demanded. c. the current price is below its equilibrium price. d. All of the above are correct.

c. the current price is below its equilibrium price.

In a market economy, supply and demand are important because they a. play a critical role in the allocation of the economy's scarce resources. b. determine how much of each good gets produced. c. can be used to predict the impact on the economy of various events and policies. d. All of the above are correct.

d. All of the above are correct.

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts? a. an increase in the price of wool shirts and an increase in the price of raw cotton b. an increase in the price of wool shirts and a decrease in the price of raw cotton c. a decrease in the price of wool shirts and an increase in the price of raw cotton d. a decrease in the price of wool shirts and a decrease in the price of raw cotton

d. a decrease in the price of wool shirts and a decrease in the price of raw cotton

A supply curve slopes upward because a. an increase in input prices increases supply. b. as more is produced, total cost of production falls. c. the quantity supplied of most goods and services increases over time. d. an increase in price gives producers an incentive to supply a larger quantity.

d. an increase in price gives producers an incentive to supply a larger quantity.

The highest form of competition is called a. arbitrage. b. monopolistic competition. c. equilibrium. d. perfect competition.

d. perfect competition.

Suppose there is an increase in the price of steel. We would expect the supply curve for steel beams to a. shift rightward. b. remain unchanged. c. become flatter. d. shift leftward.

d. shift leftward.

Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the a. firm must increase output to maintain profit levels. b. supply of bicycles will shift to the right. c. demand for bicycle assembly workers will increase. d. supply of bicycles will shift to the left.

d. supply of bicycles will shift to the left.