CH. 3 QUIZ

According to the law of demand, a demand curve A) Has a negative slope. B) Is a horizontal or flat line. C) Has a positive slope. D) Exceeds the economy's ability to produce.

A

Assume that pencils and pens are substitutes. If the price of pencils rises ceteris paribus, then we will see A) An increase in the demand for pens. B) A decrease in the demand for pens. C) An increase in the supply of pens. D) A decrease in the supply of pens.

A

At the equilibrium price, there are A) Shortages. B) Surpluses. C) Excess inventories. D) No shortages or surpluses.

D

Ceteris paribus, which of the following is most likely to cause an increase in the quantity demanded of perfume? A) A decrease in the price of perfume. B) A decrease in tastes for perfume. C) An increase in income. D) An increase in the price of electricity.

A

If the actual market price were fixed at $15 per unit in Figure 3.2, A) There would be a surplus of 40 units. B) There would be a surplus of 20 units. C) There would be a shortage of 40 units. D) There would be a shortage of 20 units.

A

Which panel of Figure 3.3 represents the changes in the market for textbooks when the cost of paper decreases and the government increases the number of student loans it grants? A) A. B) B. C) C. D) D.

A

According to the law of demand, during a given period of time, the quantity of a good demanded A) Increases as its price rises, ceteris paribus. B) Increases as its price falls, ceteris paribus. C) Decreases as its price falls, ceteris paribus. D) Does not change when price changes.

B

Ceteris paribus, if the subsidies given to corn syrup producers decrease, then we can expect A) A decrease in the demand for corn syrup. B) A decrease in the supply of corn syrup. C) An increase in the demand for corn syrup. D) An increase in the supply of corn syrup.

B

Ceteris paribus, which of the following is most likely to cause a decrease in the supply of skateboards? A) An increase in the price of skateboards. B) An increase in the cost of materials used to produce skateboards. C) An improvement in skateboard-making technology. D) All of the choices are correct.

B

Ceteris paribus, which of the following would generally cause an increase in the demand curve for new automobiles? A) A decrease in the price of new automobiles. B) An increase in consumers' income. C) The new models being perceived as ugly compared with old models. D) Consumer expectations that the price of new automobiles will be lower next year.

B

If there is a surplus at a given price, then A) The market is in equilibrium at that price. B) That price is greater than the equilibrium price. C) That price is lower than the equilibrium price. D) The price is zero.

B

A rightward shift in a demand curve and a leftward shift in a supply curve both result in a A) Lower equilibrium price. B) Lower equilibrium quantity. C) Higher equilibrium price. D) Higher equilibrium quantity.

C

Ceteris paribus, if buyers expect the price of airline tickets to fall in the future, then right now there should be A) An increase in the demand for airline tickets. B) A decrease in the supply of airline tickets. C) A decrease in the demand for airline tickets. D) No change in the supply of or demand for airline tickets because the price is not changing right now.

C

Ceteris paribus, which of the following is most likely to cause an increase in the quantity supplied of perfume? A) An improvement in perfume-making technology. B) An increase in the salaries paid to perfume makers. C) An increase in the price of perfume. D) An increase in the number of sellers of perfume.

C

Peanut butter and jelly are complements. A decrease in the price of one will result in A) A decrease in the demand for the other. B) A decrease in the quantity demanded of the other. C) An increase in the demand for the other. D) An increase in the quantity demanded of the other.

C

A change in demand means there has been a shift in the demand curve, and a change in quantity demanded A) Results from a change in price of other goods. B) Means a shortage or surplus will result from holding prices constant. C) Also means demand has shifted. D) Means that price has changed and there is movement along the demand curve.

D

A market is said to be in equilibrium when A) Demand is fully satisfied at all alternative prices. B) The buying intentions of all consumers are realized. C) The supply intentions of all sellers are realized. D) The quantity demanded equals the quantity supplied.

D