Econ201 Week 2 Quiz (Chapter 3)

(Exhibit: Supply and Demand Schedules for a Good) If there were a decrease in supply by 100 units at each price, the equilibrium price and quantity would be ________ and ________ units, respectively.

A. $2.00; 100 B. $3.00; 140 C. $3.50; 175 D. $4.00; 160 (CORRECT)

(Exhibit: Demand and Supply Schedules for a Good) The equilibrium price is ________ and the equilibrium quantity is ________.

A. $2.00; 230 units B. $3.00; 240 units (CORRECT) C. $4.00; 210 units D. impossible to determine; impossible to determine

(Exhibit: Demand and Supply Schedules for a Good.) If there were an increase in demand by 50 units at each price, the equilibrium price and quantity would be ________ and ________ units, respectively.

A. $2.00; 310 B. $2.50; 295 C. $3.00; 290 D. $3.50; 250 (CORRECT)

(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose oil becomes more expensive. Which panel best describes how this will affect the market for gasoline, which is made from oil?

A. Panel (a) B. Panel (b) C. Panel (c) D. Panel (d) (CORRECT)

(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose half the people in San Diego pack up and move to Colorado Springs. Which panel best describes how this will affect the supply of houses in San Diego?

A. Panel (a) B. Panel (b) C. Panel (c) (CORRECT) D. Panel (d)

(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose the technology for producing handheld calculators improves. Which panel best describes how this will affect the market for handheld calculators?

A. Panel (a) B. Panel (b) C. Panel (c) (CORRECT) D. Panel (d)

(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose consumer incomes increase. Which panel best describes how this will affect the market for dress ties, a normal good?

A. Panel (a) B. Panel (b) (CORRECT) C. Panel (c) D. Panel (d)

(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose half the people in San Diego move to Colorado Springs. Which panel best describes how this will affect the market for houses in Colorado Springs?

A. Panel (a) B. Panel (b) (CORRECT) C. Panel (c) D. Panel (d)

(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose the Surgeon General announces that eating chocolate prevents heart disease. Which panel best describes how this will affect the market for chocolate?

A. Panel (a) B. Panel (b) (CORRECT) C. Panel (c) D. Panel (d)

The primary difference between a change in demand and a change in the quantity demanded is:

A. a change in demand is a movement along the demand curve, and a change in quantity demanded is a shift in the demand curve. B. a change in quantity demanded is a movement along the demand curve, and a change in demand is a shift in the demand curve. (CORRECT) C. both a change in quantity demanded and a change in demand are shifts in the demand curve, only in different directions. D. both a change in quantity demanded and a change in demand are movements along the demand curve, only in different directions.

A decrease in supply means:

A. a shift to the left of the entire supply curve. (CORRECT) B. moving downward (to the left) along the supply curve with lower prices. C. less will be demanded at every price. D. more will be supplied at every price.

Demand is defined as:

A. an amount that is purchased at a specific price, given supply. B. a schedule that establishes the price of a good. C. a schedule that shows how much will be purchased at various prices during a particular period, all other things unchanged. (CORRECT) D. the amount that will be bought at a specific price.

It is true that the equilibrium quantity will always go up if supply:

A. and demand both increase. (CORRECT) B. increases and demand decreases. C. and demand both decrease. D. decreases and demand remains unchanged.

A negative relationship between the quantity demanded and price is called the law of ______.

A. demand (CORRECT) B. diminishing marginal returns C. market clearing D. supply

A shift of a demand curve to the right, all other things unchanged, will:

A. increase equilibrium price and quantity. (CORRECT) B. decrease equilibrium price and quantity. C. decrease quantity and increase price. D. increase quantity and decrease price.

If the current price is above the equilibrium price, we would expect:

A. quantity demanded to exceed quantity supplied. B. upward pressure on price. C. quantity supplied to exceed quantity demanded. (CORRECT) D. no change in the market price.

A price below the equilibrium price will:

A. result in pressure for price to rise. (CORRECT) B. result in a surplus. C. never be the case. D. result in pressure for price to fall.

The relationship between the quantity of a good or service sellers are willing and able to offer for sale and the independent variables that determine quantity is:

A. supply. (CORRECT) B. demand. C. equilibrium. D. disequilibrium.

The intersection of the supply and demand curves indicates:

A. the equilibrium solution in the market. (CORRECT) B. a surplus that will cause the price to fall. C. a shortage that will cause the price to rise. D. the quantity demanded exceeds the quantity supplied.