Econ 1: Chapter 3
C
A market is in equilibrium: A. Provided there is no surplus of the product B. At all prices above that shown by the intersection of the supply and demand curves C. If the amount producers want to sell is equal to the amount consumers want to buy D. Whenever the demand curve is downscoping and the supply curve is up sloping.
D
If X is a normal good, a rise in money income will shift the: A. Supply curve for X to the left B. Supply Curve for X to the right C. Demand curve for X to the left D. Demand Curve for X to the right.
C
If the demand and supply curves for product X are stable, a government-mandated increase in the price of X will: A. Increase the supply of X and decrease the demand for X B. Increase the demand for X and decrease the supply of X C. Increase the quantity supplied and decrease the quantity demanded of X D. Decrease the quantity supplied of X and increase the quantity demanded of X
B
In 2007 the price of oil increased, which in turn caused the price of natural gas to rise. This can best be explained by saying that oil and natural gas are: A. Complementary goods and the higher price for oil increased the demand for natural gas B. Substitute goods and the higher price for oil increased the demand for natural gas C. Complementary goods and the higher price for oil decreased the supply of natural gas D. Substitute goods and the higher price for oil decreased the supply of natural gas
B
In which of the following statements are the terms "demand" and "quantity demanded" used correctly? A. When the price of ice cream rose, the demand for both ice cream and ice cream toppings fell B. When the price of ice cream rose, the quantity demanded of ice cream fell, and the demand for ice cream toppings fell C. When the price of ice cream rose, the demand for ice fell, and the quantity demanded of ice cream toppings fell D. None of these statements use the terms correctly
C
Refer to the above data. Equilibrium price will be: A. $4 B. $3 C. $2 D. $1
C
Refer to the above data. If the price in this market was $4: A. The market would clear; quantity demanded would equal quantity supplied B. Buyers would want to purchase more wheat than is currently being supplied C. Farmers would not be able to sell all their wheat D. There would be a shortage of wheat
C
Refer to the above diagram. A decrease in demand is depicted by a: A. Move from point x to point y B. Shift from D1 to D2 C. Shift from D2 to D1 D. Move from point y to point x
D
Refer to the above diagram. A decrease in quantity demanded is depicted by a: A. Move from point x to point y B. Shift from D1 to D2 C. Shift from D2 to D1 D. Move from point y to point x
C
Refer to the above diagram. A decrease in supply is depicted by a: A. Move from point x to point y B. Shift from S1 to S2 C. Shift from S2 to S1 D. Move from point y to point x
D
Refer to the above diagram. A shortage of 160 units would be encountered if price was: A. $1.10, that is, $1.60 minus $0.50 B. $1.60 C. $1.00 D. $0.50
B
Refer to the above diagram. A surplus of 160 units would be encountered if price was: A. $1.10, and that is, $1.60 minus $0.50 B. $1.60 C. $1.00 D. $0.50
A
Refer to the above diagram. The equilibrium price and quantity in this market will be: A. $1.00 and 200 B. $1.60 and 130 C. $0.50 and 130 D. $1.60 and 290
B
Refer to the above table. If demand is represented by columns (3) and (1) and supply is represented by columns (3) and (4), equilibrium price and quantity will be: A. $10 and 60 Units B. $9 and 60 Units C. $8 and 80 Units D. $7 and 30 Units.
C
Refer to the above table. If demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5), equilibrium price and quantity will be: A. $10 and 60 Units B. $9 and 50 Units C. $8 and 60 Units D. $7 and 50 Units
C
Refer to the above table. Suppose that demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5). If the price were artificially set at $6, a: A. The market would clear B. A surplus of 40 Units would occur C. A shortage of 40 Units would occur D. Demand would change from columns (3) and (2) to columns (3) and (1)
B
Refer to the above table. Suppose that demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5). If the price were artificially set at $9, a: A. The market would clear B. A surplus of 40 Units would occur C. A shortage of 40 Units would occur D. Demand would change from columns (3) and (2) to columns (3) and (1)
B
Suppose an excise tax is imposed on product X. We would expect this tax to: A. Increase the demand for complementary good Y and decrease the demand for substitute product Z B. Decrease the demand for complementary good Y and increase the demand for substitute product Z C. Increase the demands for both complementary good Y and substitute product Z D. Decrease the demands for both complementary good Y and substitute product Z
A
Suppose that at prices of $5, $4, $3, $2, and $1 for product Z, the corresponding quantities supplied are 3, 4, 5, 6,and 7 units, respectively. Which of the following would increase the quantities supplied of Z to, say, 6, 8, 10, 12, and 14 units at these prices? A. Improved tech for producing Z B. An increase in the prices of the resources used to make Z C. An increase in the excise tax of product Z D. Increases in the incomes of the buyers of Z
B
Suppose that tacos and pizza are substitutes, and that soda and pizza are complements. We would expect an increase in the price of pizza to: A. Reduce the demand for tacos and increase the demand for sodas B. Reduce the demand for soda and increase the demand for tacos C. Increase the demand for both soda and tacos D. Reduce the demand for both soda and tacos
A
The equation for the supply curve in the below diagram is approx: A. P=4+1/3Q B. P=4+2Q C. P=4+3Q D. P=4-3Q
A
The relationship between quantity supplied and price is ___ and the relationship between quantity demanded and price is ____. A. Direct, inverse B. Inverse, direct C. Inverse, inverse D. Direct, Direct
C
When the price of a product rises, consumers shift their purchases to other products whose prices are now relatively lower. This statement describes: A. An inferior good B. The rationing function of prices C. The substitution effect D. The income effect
C
Which of the following is most likely to be an inferior good? A. Fur Coats B. Ocean Cruises C. Used Clothing D. Steak
B
Which of the following would NOT shift the demand curve for beef? A. A widely publicized study that indicates beef increases one's cholestrol B. A reduction in the price of cattle feed C. An effective advertising campaign by pork producers D. A change in the incomes of beef consumers
