CH4 Quiz

If the supply of a product decreases, then we would expect equilibrium price... -to decrease and equilibrium quantity to increase. -and equilibrium quantity to both increase. -and equilibrium quantity to both decrease. -to increase and equilibrium quantity to decrease.

to increase and equilibrium quantity to decrease.

Which of the following changes would not shift the demand curve for a good or service? -A change in income. -A change in the price of the good or service. -A change in expectations about the future price of the good or service. -A change in the price of a related good or service.

A change in the price of the good or service.

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good? -An increase in consumer income -A decrease in consumer income -Greater government restrictions on agricultural chemicals -Fewer government restrictions on agricultural chemicals

A decrease in consumer income

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation? -Consumers have experienced an increase in income, and beef-production technology has improved. -The price of chicken has risen, and the price of steak sauce has fallen. -New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy. -The demand curve for beef must be positively sloped.

New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy.

Which of the following is not held constant in a demand schedule? -Income -Tastes -Price -Expectations

Price

Which of the following events could cause an increase in the supply of ceiling fans? -The number of sellers of ceiling fans increases. -There is an increase in the price of air conditioners, and consumers regard air conditioners and ceiling fans as substitutes. -There is an increase in the price of the motor that powers ceiling fans. -The average temperature rises over time.

The number of sellers of ceiling fans increases.

Which of the following is not held constant in a supply schedule? -Production technology -Expectations -The price of the good -The prices of inputs

The price of the good

If muffins and bagels are substitutes, a higher price for bagels would result in... -an increase in the demand for bagels. -a decrease in the demand for bagels. -an increase in the demand for muffins. -a decrease in the demand for muffins

an increase in the demand for muffins.

If a seller in a competitive market chooses to charge more than the going price, then... -the owners of the raw materials used in production would raise the prices for the raw materials. -the sellers' profits must increase. -other sellers would also raise their prices. -buyers will make purchases from other sellers.

buyers will make purchases from other sellers.

The line that relates the price of a good and the quantity supplied of that good is called the supply... -schedule, and it usually slopes upward. -schedule, and it usually slopes downward. -curve, and it usually slopes upward. -curve, and it usually slopes downward.

curve, and it usually slopes upward.

Suppose you like to make, from scratch, pies filled with bananas and vanilla pudding. You notice that the price of bananas has increased. As a result, your demand for vanilla pudding would... -decrease. -increase. -be unaffected. -change but you don't know how without more information.

decrease

Equilibrium price must decrease when... -both demand and supply increase. -both demand and supply decrease. -demand does not change and supply increases. -demand increases and supply does not change.

demand does not change and supply increases.

The law of demand states that, other things equal, when the price of a good... -falls, the demand for the good rises. -rises, the quantity demanded of the good rises. -rises, the demand for the good falls. -falls, the quantity demanded of the good rises.

falls, the quantity demanded of the good rises.

The law of supply states that, other things equal, when the price of a good... -rises, the quantity supplied of the good rises. -falls, the supply of the good falls. -falls, the quantity supplied of the good rises. -rises, the supply of the good falls.

rises, the quantity supplied of the good rises.

If something happens to alter the quantity supplied at any given price, then... -we move along the supply curve. -the supply curve shifts. -the supply curve becomes steeper. -the supply curve becomes flatter.

the supply curve shifts.