Macro HW 2
Refer to Figure 4-7. At what price would there be an excess supply of 400 units of the good?
$35
Figure 4-5 Firm A Firm B If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is 8 units. 12 units. 9 units. 21 units.
21 units.
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?
A decrease in consumer income
Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?
A decrease in the price of wool shirts and a decrease in the price of raw cotton
Which of the following statements about models is correct? Economic models are usually plastic representations of the economy. Because economic models omit many details, they allow us to see what is truly important. Economic models are useful, but they should not be used for the purpose of improving public policies. Economic models are built to mirror reality exactly.
Because economic models omit many details, they allow us to see what is truly important.
If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?
Both the equilibrium price and quantity would increase.
Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market?
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
In the circular-flow diagram, which of the following items flows from firms to households through the markets for goods and services?
Goods and services
What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?
Quantity will fall, and the effect on price is ambiguous.
In the circular-flow diagram, in the markets for goods and services, households are sellers and firms are buyers. goods and services, households and firms are both sellers. the factors of production, households are sellers and firms are buyers. the factors of production, households and firms are both sellers.
The factors of production, households are sellers and firms are buyers
Which of the following events would cause a movement upward and to the left along the demand curve for olives?
The price of olives rises
Refer to Table 4-5. If the four suppliers listed are the only suppliers in this market and the market quantity demanded is 390 cases when the price is $2.00, which of the following statements is correct?
There is a shortage of 90 cases at a price of $2.00.
A decrease in the price of a good will
increase quantity demanded