Econ unit 1

An excess amount of coconuts in a competitive market would indicate that:

Price is currently above the equilibrium point.

Suppose the minimum wage is a price floor. When it is set above the equilibrium point:

There will be an excess supply of labor (surplus)

The price of cocoa beans used in the production of chocolate has fallen. This will lead to:

an increase in the supply of chocolate

The Law of Supply states that:

as price increases, producers will supply more of a product.

If both demand and supply increase in the market for smartphones

change in price is unknown but quantity will increase.

When the price of Good X decreases, the demand for Good Y increases. Good X and Good Y are:

complementary goods

All of the following groups of people benefit from a price floor in the milk market EXCEPT: (cheese manufacturers... consumers of milk... milk bottling companies... dairy farmers)

consumers of milk

Which of the following items are NOT a requirement of a properly labeled graph? (title, x and y axis labels, different curve labels or demand schedule)

demand schedule

The main difference between the shortrun and the longrun in economics is that in the long run

enough time has gone by for people to adjust to all changes.

In almost all circumstances, a decrease in supply will cause:

price to increase and quantity to decrease.

In almost all circumstances, an increase in demand will cause:

price to increase and quantity to increase.

All of the following are reasons why economists think price controls are inefficient EXCEPT: (resources are not allocated efficiently... resources are wasted... they promote illegal activity... they have environmental benefits.)

they have environmental benefits

A vendor had a revenue of $500. He raised the price, but revenue fell to $450. This means

total revenue decreased, so the item is elastic over this price range

Which of the following will NOT cause a shift in the demand curve for new cars? (An extensive marketing campaign run by car manufacturers... Consumers expect the economy to shrink in the near future... A change in the price of new cars...A change in consumer income)

A change in the price of new cars.

Which of the following will cause a shift in the supply curve for corn? (Consumer incomes increase... Thousands of tobacco farmers switch production to cotton... A drought throughout the US, which affected many farmers... A new study shows the health benefits of consuming more corn)

A drought throughout the US, which affected many farmers

A change in quantity demanded is represented how?

A movement was made along the demand curve.

All of the following goods are likely considered complementary goods for computers EXCEPT (mouse, keyboard, gasoline or software)

gasoline

The law of demand states that:

high prices lower demand, low prices increase demand

All of the following goods are likely considered substitute goods for orange juice EXCEPT (pineapple juice, hot chocolate, cranberry juice or sports drink)

hot chocolate

The price elasticity of demand measures

how sensitive quantity demand is to a change in price

When a government imposes a quota in a market, it means that:

only those with a license can supply the good or service.

When people have more money, they tend to buy

more normal goods and fewer inferior goods.

All of the following scenarios will cause supply to increase EXCEPT if: (technology improves... the opportunities in different markets are bad...the costs of production decrease...sellers exit the market.)

sellers exit the market

Price ceilings usually create a ___________; while price floors usually create a _____________.

shortage; surplus

Why would a diamond ring be considered elastic?

the item is a luxury