ECON CH #

You have noticed that there is a persistent shortage of teachers in an inner-city school district in your state. Based on this observation, you suspect that:

the wage for teachers in that district is lower than the equilibrium wage.

When a market is in equilibrium:

there is neither excess demand nor excess supply.

Suppose you bought three tickets to a concert in advance at the University ticket window. At the last minute one friend cancelled, so you could use only two of the tickets. You sold the third ticket just outside the entrance to the concert for more than the price you had originally paid. Which transaction occurred in a market?

Both the purchase at the University ticket window and the sale at the concert entrance were market transactions.

Assume both the demand for beef and the supply of beef decrease. Which of the following outcomes is certain to occur?

The equilibrium quantity of beef will fall.

Suppose you drive a car that gets good gas mileage, and you notice that more and more people are driving gas-guzzling cars. Their increased demand for gas:

is likely to cause the price you pay for gas to increase.

The market equilibrium quantity:

is sometimes the socially optimal quantity.

GRAPH

the equilibrium quantity will increase and the equilibrium price will increase.

Refer to the accompanying figure. The equilibrium price is ______, and the equilibrium quantity is ______.

$6; 4

Which of the following is likely to lead to a decrease in the demand for tennis balls?

An increase in the price of tennis racquets.

GRAPH

NOT 50 cups are sold per hour at a price of $2.50 each.

GRAPH

NOT an increase in supply and an increase in demand.

Office workers and word processing programs are complements if:

NOT an increase in the price of word processing programs leads to an increase in the demand for office workers.

Refer to the given table. The equilibrium price in this market is:

NOT between 20 & 30

If a country's economic decisions are made by an individual or small number of individuals, then it has a

NOT capitalist economy

If the demand for olives falls when the price of cheese falls, then we know that cheese and olives are:

NOT complements.

GRAPH

NOT decrease in the product's expected future price.

As the price of a good rises:

NOT firms generally increase the supply of the good.

GRAPH

NOT increase by $1.00.

GRAPH

NOT increase in the product's expected future price.

market equilibrium

NOT is socially optimal.

An outcome is socially optimal if it:

NOT leaves no unexploited opportunities for individuals.

Efficiency occurs if the:

NOT market is in equilibrium.

f demand increases and supply decreases, the change in the equilibrium price will be ______, and the change in the equilibrium quantity will be ______.

NOT positive, positive

Suppose rice is a normal good. If consumers' incomes fall, and a new technology is introduced that lowers the marginal cost of producing rice, then the equilibrium:

NOT price of rice will increase, but we cannot say for sure what will happen to the equilibrium quantity.

A good example of central planning at work in the U.S. is

NOT unions working with businesses to establish wages.

One reason the demand curve slopes ______ is that as prices fall ______.

NOT upward; more people find that the price is now less than their reservation price.

Assume the demand for coffee increases and the supply of coffee decreases. Which of the following outcomes is certain to occur?

The equilibrium price of coffee will rise.

Suppose that a disease that affects people who consume beef has been discovered in the United States. One likely result is:

a decrease in demand for beef.

The entire group of buyers and sellers of a particular good or service makes up:

a market

Refer to the accompanying figure, which shows the market for cups of coffee. Consider the original supply and the original demand curve. If the government imposes a price ceiling of $1.00 on a cup of coffee, then there would be:

an excess demand for coffee.

GRAPH

an increase in supply and an increase in demand.

Assume consumers eat either rice or pasta for dinner every night. If the price of rice increases, then one would expect to see:

an increase in the demand for pasta.

Suppose a new study highlights the health benefits of eating bacon. At the same time, suppose the cost of producing bacon falls. Given these changes, you should expect to see:

an increase in the equilibrium quantity of bacon, but it's hard to say what will happen to the equilibrium price.

An increase in the demand for GM automobiles results in:

an increase in the quantity supplied of GM automobiles.

When a slice of pizza at the student union sold for $2, Moe did not purchase any. When the price fell to $1.75, Moe purchased a slice each day for lunch. Thus, we can infer that Moe's reservation price for a slice of pizza is:

at least $1.75 but less than $2.

When the price of a good changes, the amount of that good that buyers wish to buy changes:

because of both the substitution and the income effects.

To understand how the price of a good is determined in a free market, one must account for the desires of:

buyers and sellers

A decrease in both the equilibrium price and the equilibrium quantity of rice is best explained by:

decrease in demand for rice

Suppose that the equilibrium price of T-shirts increases and the equilibrium quantity of T-shirts decreases. This is best explained by:

decrease in supply for t shirts

22 is a graph question

demand curve shifts

Suppose that recent studies conclude that high-fiber diets do not reduce the risk of developing colon cancer as was previously thought. The likely result will be that the:

demand for high-fiber foods will decrease.

The price of bananas will increase in response to:

excess demand

If the local slaughterhouse gives off an unpleasant stench, then the equilibrium quantity of meat will be _____ the quantity that maximizes total economic surplus.

higher than

Suppose that the equilibrium price of pickles falls while the equilibrium quantity rises. The most likely explanation for these changes is:

increase in supply of pickles

Buyers and sellers of a particular good make up the:

market for the good

Efficiency is an important social goal because:

movements toward economic efficiency make the total economic pie larger.

Which of the following is NOT a characteristic of a market in equilibrium?

neither buyers nor sellers want to change price?

A seller's reservation price is generally equal to:

seller's marginal cost

In a free market, if the price of a good is above the equilibrium price, then;

sellers, dissatisfied with growing inventories, will lower their prices.

"All else constant, consumers will purchase more of a good as the price falls." This statement reflects the behavior underlying:

the demand curve