ECON Chap 3

An individuals valuation of a good or service a. can be expressed in the marketplace b. is generally the same for most people c. is known as the "market price" d. is lower than the maximum that the individual will pay

A

An individuals valuation of a good or service is: a. generally the same from person to person b. known as willingness to pay c. impossible for individuals to express d. lower than the maximum that the individual will pay

B

When quantity supplied exceeds quantity demanded, a: a. shortage occurs and prices are bid up toward equilibrium b. shortage occurs and prices are pushed down toward equilibrium c. surplus occurs and prices are bid up toward equilibrium d. a surplus occurs and prices are pushed down toward equilibrium

D

Electricity is essential in the production of aluminum. If electricity prices increase: a. the supply curve for aluminum shifts leftward b. the supply curve for aluminum shifts rightward c. aluminum becomes cheaper because it is a substitute good for electricity d. aluminum is turned into an inferior good

A

If the producers of cotton shirts face a higher cotton prices, which of the following is likely to occur? a. the supply of shirts decrease the equilibrium price of shirts rise, and equilibrium quantity falls b. supply of shirts decrease, price rises, quantity rises c. supply of shirts increases, price rises, and quantity falls d. supply increases, price falls, and quantity rises

A

Supposed the terrific tube company ran a very successful advertising campaign. Economic analysis would suggest that the campaign would cause the equilibrium price to ___ and the equilibrium quantity to ______. a. rise, rise b. fall, rise c. rise, fall d. fall, fall

A

When quantity demanded in a market equals quantity supplied, then the: a. market is in equilibrium b. equilibrium price is less than expected by buyers. c. market will not clear without further price adjustments d. market is in temporary disequilibrium

A

At any price below the equilibrium price: a. the quantity demanded equals the quantity supplied in the market b. the quantity demanded exceeds the quantity supplied in the market c. demand exceeds supply in the market d. the quantity demanded is less than the quantity supplied in the market

B

If the quantity demanded is greater than the quantity supplied: a. firms will reduce price b. some consumers will offer to pay more for the product c. a surplus results for the increased demand d. firms will decrease production to drive up the price

B

supply is defined by: a. the maximum amount of a product that buyers are willing and able to purchase over the some time period at various prices, holding all other relevant factors constant b. the maximum amount a product that sellers are willing and able to provide for the sale over some time period ar various prices, holding all other relevant factors constant. c. the minimum amount of a product that buyers are willing and able to purchase over some time period and at various prices, holding all other relevant factors constant d. the minimum amount of a product that sellers are willing and able to provide for sale over some time period at various prices, holding all other relevant factors constant

B

which if the following will cause a decrease in demand? a. an increase in the price of the product b. an increase in the price of a complementary good c. an increase in the price of a substitute good d. a decrease in income for an inferior good

B

Alfred Marshall is primarily responsible for: a. the idea of comparative advantage b. the idea of the invisible hand c. developing the law of supply and demand d. the iron law of wages

C

The supply curve slopes up and to the right because: a. due to constant opportunity costs, producers feel that people will buy more if they charge a higher price b. due to inefficiencies, producers feel that people will buy more if they charge a higher price c. due to increasing opportunity costs, producers must charge more to produce more in order to cover their costs d. the supply curve actually slopes downward and to the right

C

What is the difference between a change in quantity supplied and a change in supply? a. there is no difference b. a change in the quantity supplied shifts the supply curve, and a change in supply simply moves along the supply curve c. a change in the market price affects the quantity supplied but not the supply d. a change in the market price affects the supply, but not the quantity supplied

C

When demand increases, the demand curve: a. shifts to the left b. does not change c. shifts to the right d. shifts counter-clockwise

C

When production technology improves, supply increases and the equilibrium: a. price and quantity increase b. price and quantity decreases c. a surplus results for the increased demand d. firms will decrease production to drive up the price

C

When the supply curve shifts out (to the right) and the demand curve shifts in (to the left) the equilibrium quantity will: a. increase b. decrease c. be intermediate d. there is not enough information to tell

C

Which of the following is an example of an inferior good? a. gasoline b. t-bone steak c. city bus d. clothing

C

Which of the following will NOT cause the supply curve for kayaks to shift to the left? a. an increase in the costs of materials to buy a kayak b. a decrease in the number of sellers of kayaks c. a decrease in the price of a kayak d. an increase in the taxes on kayaks

C

suppose is it discovered that consumption of greek yogurt leads to a longer life. this information would lead to a(n) a. decrease in demand b. increase in quantity demanded c. increase in demand d. decrease in quantity demanded.

C

Assume the demand schedule for smart phones is downward sloping. If the price of smart phones increases from $200 to $600: a. the demand for smart phones will decrease b. the demand for smart phone will increase c. an increase in quantity demanded of smart phones will occur d. a decrease in quantity demanded of smart phones will occur

D

Butter is a substitute for margarine. If the price of margarine drops, we would expect to see: a. the price of butter to rise and the quantity of butter traded to fall b. the price of butter to fall and the quantity of butter traded rise c. both the price of butter and the quantity of butter traded rise d. both the price of butter and quantity of butter traded fall

D