Micro ch 3

Refer to Exhibit 4. At a price of $7, there is a ____________ unit ____________ of good A. Select one: a. 50; shortage b. 20; shortage c. 20; surplus d. 50; surplus

50; shortage

Which of the following statements is true? Select one: a. If the demand curve for a good shifts leftward, demand is less at each price. b. If the demand curve for a good shifts leftward, demand is greater at each price. c. If the demand curve for a good shifts leftward, quantity demanded is greater at each price. d. If the demand curve for a good shifts leftward, quantity demanded remains constant at each price. e. None of the above.

None of the above.

Which of the following statements is true? Select one: a. To an economist, demand is different from quantity demanded. b. A demand schedule is the numerical tabulation of the law of demand. c. A demand curve is the graphical representation of the direct relationship between price and quantity demanded. d. a and b e. a, b, and c

a and b

Refer to Exhibit 1. Equilibrium price and quantity are ____________________, respectively. Select one: a. $5 and 20 units b. $5 and 10 units c. $10 and 20 units d. $15 and 30 units e. none of the above

$10 and 20 units

Which of the following statements is false? Select one: a. A change in the price of good X will usually change the quantity supplied of good X, ceteris paribus. b. A change in the number of sellers of a good can change the supply of that good. c. Price and quantity supplied are directly related. d. A vertical supply curve represents a direct relationship between price and quantity supplied.

A vertical supply curve represents a direct relationship between price and quantity supplied.

Which of the following sentences is true? Select one: a. At a price below the equilibrium price, there is a shortage. b. At a price above the equilibrium price, there is excess supply. c. At a price below the equilibrium price, there is excess demand. d. At a price above the equilibrium price, there is a surplus. e. a and d. f. All of the above

All of the above

Which of the following statements is true? Select one: a. Demand refers to how much of a good people are willing and able to buy at a particular price during a time period. b. Demand refers to the different quantities of a good people are willing and able to buy at a particular price during a time period. c. Demand refers to how much of a good people are willing to buy at different prices during a time period. d. Demand refers to the different quantities of a good people are willing and able to buy at different prices during a time period. e. none of the above

Demand refers to the different quantities of a good people are willing and able to buy at different prices during a time period.

Refer to Exhibit 3. Which of the following is false? Select one: a. Graph (1): There is a shortage of this good when the price is equal to P3. b. Graph (2): As supply increases, equilibrium quantity remains constant. c. Graph (3): As demand increases, equilibrium price remains constant. d. Graph (4): As supply changes, equilibrium price stays the same.

Graph (3): As demand increases, equilibrium price remains constant.

Ryan used to buy 40 gallons of gasoline per month when the price was $1.50 per gallon. Now that the price is $1.80 per gallon, he buys only 30 gallons per month. Gorge says that Ryan's demand for gasoline has decreased. Is Gorge correct? Select one: a. Yes, Gorge is correct. b. No, Gorge is incorrect. Ryan's demand has increased. c. No, Gorge is incorrect. Ryan's quantity demanded has decreased, but her demand has stayed the same. d. No, Gorge is incorrect. Ryan's quantity demanded has increased, but her demand has stayed the same. e. No, Gorge is incorrect. Ryan's quantity demanded has decreased and her demand has increased.

No, Gorge is incorrect. Ryan's quantity demanded has decreased, but her demand has stayed the same.

Which of the following statements is true? Select one: a. The law of demand states that price and quantity demanded are directly related, ceteris paribus. b. The law of demand states that price and quantity demanded are independent. c. The law of demand states that price and quantity demanded are positively related, ceteris paribus. d. The law of demand states that price and quantity demanded are inversely related, ceteris paribus.

The law of demand states that price and quantity demanded are inversely related, ceteris paribus.

If the supply curve and the demand curve for lettuce both shift to the left by an equal amount, what can we say about the resulting changes in equilibrium price and quantity? Select one: a. The price will increase, but the quantity may increase or decrease. b. The price will increase, and the quantity will increase. c. The price will decrease, and the quantity will increase. d. The price will stay the same, but the quantity will increase. e. The price will stay the same, but the quantity will decrease.

The price will stay the same, but the quantity will decrease.

Which of the following statements is false? Select one: a. The shift factors for the supply curve are: income, preferences, prices of related goods, the number of buyers, and expectations of future price. b. A change in (own) price changes the quantity supplied of a good. c. A change in demand is graphically represented by a shift in the demand curve. d. A change in quantity demanded is represented by a movement along a given demand curve.

The shift factors for the supply curve are: income, preferences, prices of related goods, the number of buyers, and expectations of future price.

Refineries use crude oil to produce gasoline. Which of the following is most likely to happen if the price of crude oil increases? Select one: a. The demand curve for gasoline shifts leftward. b. The demand curve for gasoline shifts rightward. c. The supply curve of gasoline shifts leftward. d. The supply curve of gasoline shifts rightward.

The supply curve of gasoline shifts leftward.

Refer to Exhibit 2. Which of the following would result in a movement from point Y on D1 to point X on D0? Select one: a. There was an increase in income (assuming that good A is a normal good) and technology remained constant b. There was an increase in income (assuming that good A is an inferior good) and technology remained constant. c. There was an increase in income (assuming that good A is an inferior good) and technology improved. d. There was an increase in income (assuming that good A is a normal good) and technology declined.

There was an increase in income (assuming that good A is an inferior good) and technology remained constant.

Refer to Exhibit 2. Suppose equilibrium is at point X. Something then changes and equilibrium becomes point Z. Which of the following is consistent with the change in equilibrium from point X to Z (assuming that good A is a normal good)? Select one: a. There was a decrease in the price of a complement and an increase in wages. b. There was a decrease in income and production technology advanced. c. There was an increase in the price of a substitute and an increase in wages. d. There was an increase in income and production technology advanced.

There was an increase in income and production technology advanced.

Refer to Exhibit 2. Suppose equilibrium is at point X. Something then changes and equilibrium becomes point Z. Which of the following is consistent with the change in equilibrium from point X to Z (assuming that good A is a normal good)? Select one: a. There was a decrease in the number of buyers and business taxes increased. b. There was an increase in the number of buyers and business taxes increased. c. There was an increase in the number of buyers and business taxes decreased. d. There was a decrease in the number of buyers and business taxes decreased.

There was an increase in the number of buyers and business taxes decreased.

Refer to Exhibit 2. Which of the following would result in a movement from point X on D0 to point Y on D1? Select one: a. There was a decrease in the price of a substitute for good A. b. There was an increase in the price of a complement to good A. c. There was an increase in the price of a substitute for good A. d. There was a decline in technology in the production of good A.

There was an increase in the price of a substitute for good A.

Suppose the equilibrium point of supply and demand in the gasoline market has moved down and to the right. What could have caused this? Select one: a. a rise in the price of crude oil b. a fall in the price of crude oil c. a rise in income, assuming that peanut butter is an inferior good d. a shift in preferences toward peanut butter

a fall in the price of crude oil

An advance in technology in the production of good X causes Select one: a. a rightward shift in the supply curve for good X. b. a leftward shift in the supply curve for good X. c. the supply curve for good X to change from upward sloping to vertical. d. the supply curve for good X to change from vertical to upward sloping.

a rightward shift in the supply curve for good X.

The price of per gallon milk was $3 in year 1 and $3.5 in year 2. Which of the following could be the correct reason for the rise in price? Select one: a. The demand for milk was higher in year 2 than in year 1, ceteris paribus. b. The supply of milk was lower in year 2 than in year 1, ceteris paribus. c. The demand was higher, and the supply was lower, in year 2 than in year 1. d. a and b e. a, b, and c

a, b, and c

Which of the following will shift a supply curve? Select one: a. a change in the price of relevant resources b. a change in the good's own price c. a change in the number of sellers d. a change in per-unit costs brought about by a change in taxes e. a, c, and d f. b, c, and d

a, c, and d

Which of the following statements are true? Select one: a. olive oil and vegetable oil are substitutes b. DVD's and DVD players are complements. c. hiking boots and tennis shoes are substitutes d. tires and automobiles are complements. e. all of the above. f. a and c

all of the above.

Assume that Corey's income increases and as a result, his demand for French fries decreases. Then for Corey French fries is Select one: a. a bad good. b. a normal good. c. a preferential good. d. an inferior good. e. a neutral good.

an inferior good.

Which of the following statements is true? Select one: a. If a supply curve shifts rightward, this means suppliers are willing and able to offer less of the good for sale at every price. b. If a supply curve shifts rightward, this means suppliers are willing and able to offer more of the good for sale at every price. c. If a supply curve shifts rightward, this means quantity supplied is greater at every price. d. If a supply curve shifts rightward, this means suppliers are willing and able to offer more of the good for sale only at a particular price. e. b and c f. a and d

b and c

Which of the following statements is true? Select one: a. One reason for the law of demand is that one price changing requires at least one other price to change in the opposite direction. b. One reason for the law of demand is that people substitute relatively lower-priced goods for relatively higher-priced goods. c. One reason for the law of demand is that change in price changes the ability of buyer. d. b and c. e. All of the above

b and c.

Which of the following statements is true? Select one: a. An "increase in the quantity demanded" means that the demand curve has shifted to the right. b. An "increase in the quantity demanded" means that price has declined, and consumers therefore want to purchase more of the good. c. An "increase in demand" means that price has declined, and consumers want to purchase more of the good. d. An "increase in demand" means that the demand curve has shifted to the right. e. b and d f. a and c

b and d

If the demand of good A declines as the result of increase in price of good B, then these two goods are: Select one: a. substitutes. b. complements. c. normal goods. d. inferior goods. e. none of the above

complements.

Suppose number of farmers that produce and sell milk to the market increases. Ceteris paribus, it __________________ for that good. Select one: a. increases equilibrium price and quantity b. increases equilibrium price and decreases equilibrium quantity c. decreases equilibrium price and increases equilibrium quantity d. decreases equilibrium price and quantity e. increases demand

decreases equilibrium price and increases equilibrium quantity

Based on the law of supply, price and quantity supplied are Select one: a. directly related. b. inversely related. c. inversely related, ceteris paribus. d. directly related, ceteris paribus. e. not related.

directly related, ceteris paribus.

Suppose that for a given good, demand decreases and supply decreases at the same time. If demand decreases by a greater amount than supply decreases, then equilibrium price __________ and equilibrium quantity __________ for that good. Select one: a. rises; rises b. rises; falls c. falls; rises d. falls; falls

falls; falls

Suppose that for a given good demand increases and supply increases at the same time. If demand increases by a lesser amount than supply increases, then equilibrium price __________ and equilibrium quantity __________ for that good. Select one: a. rises; falls b. falls; falls c. rises; rises d. falls; rises

falls; rises

Refer to Exhibit 4. At a price of $13, the quantity demanded of good A is ____________ than the quantity supplied of good A, and economists would use this information to predict that the price of good A would soon ______________. This would push the price __________ the equilibrium price. Select one: a. greater; fall; toward b. greater; rise; toward c. less; fall; toward d. less; rise; away from e. greater; rise; away from

less; fall; toward

On a supply-and-demand diagram, quantity demanded equals quantity supplied Select one: a. at every price at or above the equilibrium price. b. at every price at or below the equilibrium price. c. at every price. d. none of the above.

none of the above.

If the minimum selling price and the _____________ are known, then we can determine producers' surplus. Select one: a. price received Correct b. price paid c. tax paid d. tax received e. a and c

price received

If number of buyers in the gasoline market increases from 75 thousand to 100 thousand, it will result in a: Select one: a. movement up along the demand curve. b. rightward shift in the demand curve. c. movement down along the demand curve. d. leftward shift in the demand curve .

rightward shift in the demand curve.

Suppose that for a given good demand increases and supply decreases at the same time. If demand increases by a lesser amount than supply decreases, then equilibrium price __________ and equilibrium quantity __________ for that good. Select one: a. rises; falls b. falls; falls c. rises; rises d. falls; rises

rises; falls

Refer to Exhibit 1. At a price of $5 there is a Select one: a. shortage of 10 units. b. shortage of 200 units. c. shortage of 20 units. d. surplus of 200 units. e. surplus of 20 units.

shortage of 20 units.

At a price for which quantity demanded exceeds quantity supplied, a __________ is experienced, which pushes the price __________ toward its equilibrium value. Select one: a. surplus; downward b. surplus; upward c. shortage; downward d. shortage; upward

shortage; upward

The demand for good Y goes up if the price of good X increases. Therefore, goods X and Yare Select one: a. normal goods. b. inferior goods. c. substitutes. d. complements. e. none of the above

substitutes.

The government imposes a $2.50 per-unit tax on the production of good X. As a result the Select one: a. supply curve for good X shifts leftward and the price of good X rises. b. quantity supplied of good X falls and the price of good X rises. c. demand curve for good X shifts leftward and the price of good X falls. d. supply curve for good X shifts rightward and the price of good X falls. e. supply curve for good X shifts leftward and the price of good X falls.

supply curve for good X shifts leftward and the price of good X rises.

Peanut is necessary to the production of peanut butter. If the price of peanut rises, the _____________ curve for peanut butter will shift ____________ resulting in a(n) _____________ in the equilibrium price of peanut butter and a(n) ____________ in the equilibrium quantity of peanut butter. Select one: a. supply; rightward; decrease; increase. b. demand; leftward; decrease; decrease c. demand; rightward; increase; increase d. supply; leftward; increase; decrease e. supply; leftward; increase; increase

supply; leftward; increase; decrease

There is a technological improvement in the production of good X. As a result, the _____________ curve for good X will shift ____________ resulting in a(n) _____________ in the equilibrium price of X and a(n) ____________ in the equilibrium quantity of X. Select one: a. supply; rightward; decrease; increase. b. demand; leftward; decrease; decrease c. demand; rightward; increase; increase d. supply; leftward; increase; decrease e. supply; leftward; increase; increase

supply; rightward; decrease; increase.

Refer to Exhibit 1. At a price of $15 there is a Select one: a. surplus of 20 units. b. surplus of 10 units. c. shortage of 30 units. d. shortage of 10 units. e. shortage of 20 units.

surplus of 20 units.