Micro Test

Which of the following will cause the supply curve for shoes to shift to the right?

An increase in the number of firms producing shoes

If the minimum wage for teenagers increased to a rate higher than their market equilibrium wage, what would be the effect on their wage and employment?

Wage - Increase Employment - Decrease

For an inferior good, an increase in consumer income will cause

the demand curve to shift to the left

Which of the following changes will lead to an increase in the supply of good X?

A decrease in the price of energy, a key input to the production of good X

Which of the following will shift the supply curve for apples to the right?

A decrease in the rental price for apple harvesting equipment

If cotton is used to produce towels, an increase in the price of cotton will result in which of the following changes in the towel market?

A decrease in the supply of towels, which leads to a shortage of towels followed by upward pressure on the price of towels

Which of the following changes in the demand for and the supply of a good would necessarily lead to a decrease in the equilibrium quantity of the good in the market in the short run?

Demand - Decrease Supply - Decrease

If the government eliminates an effective minimum wage in a competitive labor market, which of the following is true?

Minimum wage workers will experience a decrease in hourly pay.

Which of the following would most likely result in a decrease in the equilibrium price of oranges?

New studies suggest that oranges contain traces of cancer-causing substances due to pesticide residue.

Zucchini is produced in a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. Dawson Farm is a typical perfectly competitive farm that produces and sells zucchini at the equilibrium price of $1.75 per pound. Which of the following is true?

No buyer in the market is willing to pay more than $1.75 per pound for zucchini from Dawson Farm.

Assume that consumers consider potatoes to be an inferior good, but consider rice to be a normal good. An increase in consumers' incomes will most likely affect the equilibrium price and quantity of potatoes and rice in which of the following ways?

Potatoes | Price - Decrease, Quantity - Decrease Rice | Price - Increase, Quantity Increase

The graphs above show Mary's demand for hamburgers and Mark's demand for hamburgers. Suppose Mary and Mark are the only two consumers in the market. Which of the following is a point on the market demand curve for hamburgers?

Price - $4 Quantity - 7

Assuming a downward-sloping demand curve and an upward-sloping supply curve, which of the following will occur as a result of an increase in the sales tax on a good?

Quantity demanded will decrease.

Assume that mustard and ketchup are considered substitutes by consumers. If the price of mustard increases, which of the following graphs represents the most likely response in the ketchup market?

Right arrow to demand 2 on bottom of curve

Assume that the market for lemonade is perfectly competitive and currently in equilibrium. Lemons are key ingredients in lemonade. If the price of lemons decreases, how will the lemonade market be affected?

Supply will shift rightward, decreasing the equilibrium price and increasing the equilibrium quantity of lemonade.

A change in which of the following will cause a change in the supply of personal computers (PC's) in the short run?

Technology

In a perfectly competitive market, a change in which of the following could cause a shift in the supply curve?

Technology

The graph above illustrates the labor market for teenage workers. The current minimum wage for all workers is W1. If Congress introduces a sub-minimum wage, W2 that applies only to teenagers, what is the most likely effect on teenage employment?

Teenage employment will increase because firms will want to hire more teenagers at W2 than at W1.

Suppose hot dogs and hamburgers are substitutes in consumption. If the supply of hot dogs decreases, which of the following will happen in the market for hamburgers?

The demand curve for hamburgers will shift to the right.

The American Heart Association has just issued a report warning consumers about the negative health effects of eating beef. Which of the following changes in the beef market is most likely to occur as a result?

The demand curve will shift to the left, decreasing the price of beef.

The graph above shows the supply and demand curves for artichokes. The surgeon general announces that eating an artichoke a day dramatically reduces one's likelihood of developing cancer. Simultaneously an infestation of the artichoke weevil severely damages the crop. Which of the following will definitely occur as a result?

The price of artichokes will increase.

If growing corn becomes more profitable than growing wheat, which of the following will occur?

The price of corn will decrease.

Which of the following describes how a market will respond when the scarcity of a good increases?

The price of the good will increase.

Which of the following will most likely happen in the market for good X if the price of good X decreases?

The quantity demanded for good X will increase.

Which of the following occurs if the price of oranges is below the equilibrium price?

The quantity demanded of oranges is greater than the quantity supplied.

According to the law of demand, which of the following occurs when the price of a good increases?

The quantity demanded of the good decreases.

The graph shows the market supply (S) and demand (D) curves for a particular product. If the government imposes a price ceiling at P2, which of the following statements is true?

The quantity sold in the market remains at Q2 because the price ceiling is not binding.

Assume that popcorn and movie attendance are complements and that Salty Concession grows corn suitable for popping. Mr Concession will most likely sell a greater quantity of popping corn at a higher price if which of the following occurs?

The release of three summer movies sets records for movie attendance

Assume that good X is a normal good. If the price of good X increases, what will happen?

The substitution and income effects will both lead to less of good X being purchased.

If the government imposes a tax on the production of cars, which of the following will occur in the market for cars?

The supply curve will shift to the left.

Which of the following will occur if the government imposes a price ceiling below the equilibrium price of a good?

There will be a shortage in the market.

Assume the government imposes a price floor above the current equilibrium price in the market for a good. Which of the following will occur?

There will be an excess supply of the good.

Which of the following best describes the law of demand?

When the price of a good decreases, its quantity demanded increases.

Which of the following best describes the law of demand?

When the price of a good increases, the quantity demanded of the good decreases.

The graph above shows the market demand for good X. A movement from point A to point B would most likely be caused by

a decrease in production costs for good X

An increase in the supply of coffee could be caused by

a decrease in the cost of labor used to produce coffee

Leather and beef are jointly produced such that an increase in the production of one results in an equal increase in the production of the other. An increase in the demand for leather will most likely cause

a decrease in the price of beef

Which of the following will cause the demand for a normal good to increase?

a decrease in the price of complementary good

Following a prolonged power outage, the price of flashlights normally increases significantly. If cities had passed laws prohibiting price increases for flashlights, during power outages such laws would most likely

create a shortage of flashlights

Assume that people like onions on their hamburgers. If the supply of hamburgers decreases, the demand for onions will most likely

decrease because hamburgers and onions are complements

Assume that consumers consider popcorn and pretzels to be substitutes. A significant decrease in the supply of popcorn will affect the pretzel market by

increasing the demand for pretzels and therefore the price of pretzels

In the short run, a decrease in production costs of a product will shift

only the supply curve to the right

Ice cream is a normal good. Ice cream and hot fudge are complementary goods, while ice cream and gelato are substitute goods. Which of the following could lead to an increase in the equilibrium price and an indeterminate change in the equilibrium quantity of ice cream?

A new study indicates that ice cream is associated with improved bone health, and a leading ice cream producer declares bankruptcy.

Which of the following would shift the short-run supply curve for strawberries?

A strike by all farmworkers

For consumers, assume that fish sticks and tacos are substitutes. Which of the following graphs illustrates the effect on the taco market if the price of fish sticks increases?

A. Supply to the right, demand 1, demand 2

If bologna is an inferior good, which of the following must be true?

An increase in consumer income will decrease the demand of bologna.

Which of the following will increase the demand for pizza, a normal good?

An increase in consumers' income

Which of the following is most likely to occur when a competitive market adjusts from one equilibrium to another?

An increase in demand will cause the equilibrium price, equilibrium quantity, and producer surplus to increase.

If an effective rent ceiling is eliminated, which of the following is most likely to occur in the rental housing market?

An increase in rents, resulting in an increase in the quantity of housing supplied

Which of the following will decrease the demand for beef?

An increase in the price of potatoes, if potatoes and beef are complementary goods

Which of the following provides a possible explanation for a simultaneous increase in the equilibrium price and the quantity of blueberries in a market?

An increase in the price of strawberries, a substitute

Last year 17 million tons of beans were sold for $300 per ton. This year 17 million tons of beans were sold for $285 per ton. Which of the following changes in demand and supply could have caused this outcome?

Demand - Decrease Supply - Increase

Which of the following changes in the demand for and the supply of a good will necessarily result in an increase in both the equilibrium price and quantity of the good in a market?

Demand - Increase Supply - No Change

Carmen consumes both entertainment and medical care. For Carmen, entertainment is a normal good, and the income elasticity of her demand for medical care is zero. If Carmen's income increases, which of the following will be the immediate impact on her consumption?

Entertainment - Increase Medical care - No change

The demand curve for a normal good slopes down for which of the following reasons? I. An increase in the price of the good induces consumers to purchase substitute products. II. An increase in the price of the goods reduces consumers' purchasing power. III. An increase in the price of the good increases consumers' utility from consuming that good.

I and II only

What of the following situations best illustrates the law of demand?

In the past several months, as the price of compact disc players has decreased, the quantity of compact disc players sold has increased

A decrease in raw material prices will change the equilibrium price and quantity in a market in which of the following ways?

Price - Decrease Quantity - Increase

If an unusually cold summer destroyed a large portion of the bee population, the equilibrium price and quantity of honey produced by bees will most likely change in which of the following ways?

Price - Increase Quantity - Decrease

What will happen to the price and quantity of footballs as a result of an increase in the price of leather used to make footballs?

Price will increase, and quantity will decrease.

Given an increase in the price of material K— which is an input used to produce good X— and an increase in the price of good Y— which is a substitute for good X— which of the following will definitely occur?

The equilibrium price of good X will increase.

Which of the following helps explain why the demand curve for a normal good is downward sloping?

The income and substitution effects move the quantity demanded in the same direction.

If the supply of fish increases, there will be

a decrease in the price of fish

All of the following cause a rightward shift in the demand schedule for a normal good EXCEPT

a decrease in the price of the good

In the market shown in the graph above, at a price of $5, there will be

a surplus and the price will eventually fall

The market for goldfish is perfectly competitive. From year 1 to year 2, both the price and the quantity of goldfish sold increase. This is most likely caused by

an increase in the demand

The supply curve for automobiles will shift to the left in response to

an increase in wages in the automobile industry

If the increase in the price of one good decreases the demand for another, then the two goods are

complementary goods

The diagram above shows the demand and supply curves for a normal good. The equilibrium price could rise from P1 to P2 if

consumers' incomes increased