Econ 101 Quiz 3
A demand shift affects
buyers' willingness to purchase at various prices.
Inferior goods are characterized by _____ demand as a result of increased income.
lower
An increase in supply is shown graphically as a ________ shift of the supply curve, and as a result of an increase in supply, equilibrium price will ________.
rightward; decrease
If a town begins requiring builders to build on one-acre lots, instead of on smaller quarter-acre lots, the supply curve for new homes will
shift to the left.
In a movement along the demand curve, the demand schedule
stays the same, but the price changes.
Movement along the demand curve means that the demand schedule ________ and the price ________.
stays the same; changes
The gap between quantity supplied and quantity demanded is usually closed over time by the
market mechanism.
In 2004, the worldwide demand curve for cement moved to the right. What does this mean?
At any price, the quantity demanded was higher.
For which pair of goods below would an increase in income have the same effect on both goods?
A normal good and a luxury good.
Because of global warming, countries that are cooler may see ________ in the supply of grain and agricultural products.
A shift to the right
To determine whether a particular good is a normal good, a luxury good, or an inferior good, you would want to observe what happens to demand for the good when __________ changes.
income
When necessary, a higher price will simultaneously ________ the quantity supplied and ________ the quantity demanded, thus reducing the amount of excess ________.
increase; decrease; demand Correct
In the short run, the quantity of available hotel rooms is not particularly responsive to changes in price because hotels take time to build and to destroy. This implies that the short-run supply of hotel rooms is
inelastic.
Refer to the table. In this market, the equilibrium price
is between $2 and $3.
What caused the decline in demand for red delicious apples?
Consumers found them to be tasteless.
How might a government cause a demand shift to the right?
By requiring consumers to purchase certain products
The selling prices of houses from 2003 to 2006 reflected which market condition?
Excess demand
An increase in oil prices may cause
a reduction in the quantity of oil demanded.
Higher income for buyers usually means
a rightward shift of the demand curve.
If supply is inelastic, then a demand shift will have a ____ effect on _______ than on quantity.
bigger; price
In the long run,hotel room prices that are falling as a result of excess supply will ______ the quantity of hotel rooms supplied in a market.
decrease
If the interest rates on new car loans increase, the quantity of new cars supplied will
decrease.
When a demand curve shifts to the right
demand has increased, so equilibrium price increases, and equilibrium quantity increases.
Higher interest rates can cause the ________ curve for new cars to ________.
demand; shift to the left.
Government action can cause a shift in
either supply or demand
On the basic supply-demand graph, the point at which the demand curve and the supply curve intersect is located at
equilibrium price and equilibrium quantity
Most markets, if left alone, will tend toward
equilibrium price.
The price at which the quantity supplied equals quantity demanded is the
equilibrium price.
The price at which the quantity supplied equals the quantity demanded is the
equilibrium price.
Refer to the table. If the current price in this market is $2 then there is
excess demand and pressure on the price to rise.
If the supply of a good increases, the equilibrium price of that good
falls while quantity demanded rises.
Refer to the table. In this market, the equilibrium price occurs where quantity demanded and quantity supplied are both
greater than 80 but less than 100.
A demand shift to the right generally leads to
higher prices and higher quantities.
Refer to the figure. In the market for medium cheese pizzas, the equilibrium price is
5$
Movies delivered over the Internet might have what effect on the market for movies in movie theaters?
A demand shift to the left
How does a lower price alleviate the problem of excess supply?
A lower price decreases the number of potential sellers and increases the number of potential buyers.
Refer to the figure. Which of the following is true?
At a price of $5, there would be neither excess demand for nor excess supply of pizza
Which is NOT an example of inelastic supply?
Bottled water
If a frost suddenly destroyed a big portion of this year's crop of oranges, a good with highly elastic demand, what would be the impact on quantity demanded and price?
Quantity demanded would decrease a lot, and price would remain stable or rise slightly.
Which of the following is LEAST likely to be an example of a normal good?
Store-brand breakfast cereal
If federal financial aid were severely reduced, what would happen to the equilibrium quantity of education supplied by educational institutions?
The quantity supplied would fall.
Hurricane Katrina caused refineries and oil rigs in New Orleans and in the Gulf of Mexico to close down. In the market for gasoline, Hurricane Katrina caused
a decrease in supply.
Stricter loan standards in the mortgage lending sector could cause
a demand shift to the left in the housing market.
After Hurricane Katrina, the supply curve for oil shifted to the left, and as a result
a new equilibrium price was reached.
Market equilibrium is the point where quantity supplied and ________ are reasonably in balance.
quantity demanded
A luxury good is one whose demand ______ as income increases.
rises sharply
After Hurricane Katrina, the supply curve for gasoline
shifted to the left.
Between 2000 and 2007, many more furniture companies started producing furniture more cheaply in China. As a result, the
supply curve for furniture shifted to the right.
If a new major oil field is discovered in Africa, the world __________ curve for oil would shift to the __________.
supply; right
Demand is inelastic if
the quantity demanded does not change very much even if the price changes dramatically