Lecture 3 Macro (demand, supply, and Price)

A normal good is a good for which the demanded decreases as income decreases, holding everything else constant. Question 16 options: True False

A

Farmers can raise either goats or ostriches on their land. Which of the following would cause the supply of goats to decrease? Question 15 options: an increase in the price of ostriches a decrease in the price of goats an increase in the demand for goats an increase in the price of ostrich feed a technological advancement in raising goats

A

If a demand curve and a supply curve can be stated functionally as Qd = 500 - 0.1P and Qs = 440 + 0.4P, respectively, then the equilibrium quantity and price (Q, P) would be Question 13 options: 488; 120 120; 488. 150; 485. 150; 150. 940; 0.4.

A

If an increase in income leads to in an increase in the demand for sushi, then sushi is Question 19 options: a normal good. a neutral good. a complement. a necessity. an inferior good.

A

https://bolt.bloomu.edu/content/enforced1/2071334-2016FallECONOMIC-121-01_02_CC/Q3F3-5.jpg?_&d2lSessionVal=qaEwjjlbJDDKDQSmbM210xkc0 Refer to Figure 3-5. At a price of $15, the quantity sold Question 14 options: is 2 units. is 4 units. is 6 units. is 8 units. cannot be determined.

A

An increase in quantity supplied is represented by a rightward shift of the supply curve. Question 18 options: True False

B

Consider the law of demand. Other things being equal, the quantity of beer demanded will be greater if the Question 2 options: incomes of beer drinkers are higher. price of beer is lower. price of wine is higher. number of beer drinkers is higher. demand for beer rises.

B

If goods X and Y are complements and the price of X falls, all other things being equal, the demand curve for Y will Question 4 options: shift to the left. shift to the right. not shift at all. unable to determine. shift downward.

B

If the price of peaches, a substitute for plums, increases the demand for plums will decrease. Question 17 options: True False

B

Chart

C

Excess demand is the same thing as Question 7 options: excess supply. demand. quantity demanded minus quantity supplied. quantity supplied exceeding quantity demanded. an equilibrium condition.

C

To say that the demand curve for movies is negatively sloped means that Question 3 options: less quantity will be demanded at lower prices. more quantity will be demanded as home theatre systems become more expensive. less quantity will be demanded at higher prices. less quantity will be demanded as movies become poorer in quality. less quantity will be demanded at the same price.

C

chart 2

C

https://bolt.bloomu.edu/content/enforced1/2071334-2016FallECONOMIC-121-01_02_CC/Q3F3-3.jpg?_&d2lSessionVal=qaEwjjlbJDDKDQSmbM210xkc0 Refer to Figure 3-3. At a price of P1 there would be excess supply equal to Question 10 options: 0 Q1 Q5 Q2 Q4 Q1 Q2 Q4 Q5

C

Given a positively sloped supply curve, a rise in the demand for that commodity causes Question 11 options: a shortage of other goods. a fall in sales of that commodity. a decrease in the equilibrium price and an increase in the equilibrium quantity exchanged. an increase in both the equilibrium price and the equilibrium quantity exchanged. a decrease in both the equilibrium price and the equilibrium quantity exchanged. Save

D

Which of the following best defines quantity demanded? Question 1 options: The amount an individual purchases at its current price. The amount an individual purchases at his or her current income. The amount, per time period, that is desired at a given price. The amount, per time period, an individual desires and is able to purchase at the given price. The various amounts that a society desires at all relevant prices.

D

Which of the following pairs of goods are likely to be complements for a large group of consumers? Question 20 options: televisions and radios cars and trucks tea and coffee televisions and DVD players tents and tent-trailers

D

If the legal beer-drinking age is raised by two years, the changes to the equilibrium price and quantity of beer will be such that Question 12 options: price rises, quantity rises. price falls, quantity rises. price rises, quantity falls. no change in price or quantity occurs. price falls, quantity falls.

E

https://bolt.bloomu.edu/content/enforced1/2071334-2016FallECONOMIC-121-01_02_CC/Q3F3-1.jpg?_&d2lSessionVal=qaEwjjlbJDDKDQSmbM210xkc0 Refer to Figure 3-1. A shift of the demand curve for energy-efficient light bulbs from D to D2 could be caused by Question 5 options: an increase in the price of ordinary light bulbs. a change in preferences away from ordinary bulbs to energy-efficient bulbs. an expectation that new government regulation will require the use of energy-efficient light bulbs only. a decrease in the price of energy-efficient light bulbs. a news bulletin stating that energy-efficient light bulbs emit a harmful gas.

E

https://bolt.bloomu.edu/content/enforced1/2071334-2016FallECONOMIC-121-01_02_CC/Q3F3-2.jpg?_&d2lSessionVal=qaEwjjlbJDDKDQSmbM210xkc0 Refer to Figure 3-2. A shift of the supply curve from S to S1 could be caused by Question 6 options: an increase in the price of energy-efficient light bulbs. a decrease in the price of energy-efficient light bulbs. an expectation that new government regulations will ban the use of energy-efficient light bulbs. a change in consumers' preferences away from ordinary light bulbs toward energy-efficient light bulbs. a decrease in the price of glass, a major input in the production of energy-efficient light bulbs.

E