ECON Ch 3

After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is: a.a movement down along the demand curve for beef to the right. b.a shift of the demand curve for beef to the left. c.no change; only the supply curve for beef is likely to be affected. d.a shift of the demand curve for beef to the right.

b.a shift of the demand curve for beef to the left.

The ___________ is the only price where quantity demanded is equal to quantity supplied. a.vertical axis intercept b.equilibrium price c.horizontal axis intercept d.market price

b.equilibrium price

If new manufacturers enter the computer industry, then (ceteris paribus): a.the demand curve shifts to the left. b.the supply curve shifts to the right. c.some established manufacturers must exit the industry. d.the supply curve shifts to the left.

b.the supply curve shifts to the right.

When quantity demanded decreases in response to a change in price: a.there is a movement down along the demand curve. b.there is a movement up along the demand curve. c.the demand curve shifts to the right. d.the demand curve shifts to the left.

b.there is a movement up along the demand curve.

______________ are enacted when discontented sellers, feeling that prices are too low, appeal to legislators to keep prices from falling. a.Subsidies b.Rent controls c.Price floors d.Price ceilings

c.Price floors

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of: a.the demand curve, as consumers try to economize because of the shortage. b.the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price. c.the supply curve. d.both the supply and demand curves.

c.the supply curve.

In economics, the demand for a good refers to the amount of the good that people: a,will buy at alternative income levels. b.would like to have if the good were free. c.will buy at various prices. d.need to achieve a minimum standard of living.

c.will buy at various prices.

If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that: a.Goods X and Y are substitute goods. b.Goods X and Y are normal goods. c.the price of Good Y will increase. d.Goods X and Y are complement goods.

d.Goods X and Y are complement goods.

The nature of demand indicates that as the price of a good increases: a.suppliers wish to sell less of it. b.more of it is produced. c.more of it is desired. d.buyers desire to purchase less of it.

d.buyers desire to purchase less of it.

A change in price of a good or service typically causes ___________________________ for that specific good or service. a.a change along the supply curve b.the supply curve to shift c.a decreased demand d.a new equilibrium price

a.a change along the supply curve

The term "ceteris paribus" means that: a.all variables except those specified are constant. b.everything is variable. c.no one knows which variables will change and which will remain constant. d.what is true for the individual is not necessarily true for the whole.

a.all variables except those specified are constant.

The demand schedule for a good: a.indicates the quantities that will be purchased at alternative market prices. b.indicates the quantities that suppliers will sell at various market prices. c.is determined primarily by the cost of producing the good. d.indicates the quantity that people will buy at the prevailing price.

a.indicates the quantities that will be purchased at alternative market prices.

If a firm faces ________________________, while the prices for the output the firm produces remain unchanged, a firm's profits will increase. a.lower costs of production b.higher demand c.equilibrium d.a shift in demand

a.lower costs of production

A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and ____________, shown on the horizontal axis. a.quantity b.demand c.quantity demanded d.quantity supplied

a.quantity

A demand curve shows the relationship between price and _________________ on a graph. a.quantity demanded b.quantity produced c.costs d.economies of scale

a.quantity demanded

_________________ refers to the total number of units that are purchased at that price. a.quantity demanded b.market quantity c.quantity d.supply

a.quantity demanded

When economists talk about supply, they are referring to a relationship between price received for each unit sold and the _________________. a.quantity supplied b.demand curve c.market price d.demand schedule

a.quantity supplied

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the __________________ . a.supply curve to the right b.supply curve to the left c.demand curve to the right d.demand curve to the left

a.supply curve to the right

A report surfaced lately that President Obama has given the order to federal agents to "round up" farm workers that have illegally entered the U.S. and deport them. The impact of this order on the market for vegetables will be a leftward shift of: a.the supply curve. b.the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price. c.the demand curve, as consumers try to economize because of the shortage. d.both the supply and demand curves.

a.the supply curve.

According to the law of supply: a.there is a direct relationship between price and the quantity supplied. b.there is an inverse relationship between price and the quantity supplied. c.there is a direct relationship between price and quantity demanded. d.there is an inverse relationship between price and quantity demanded.

a.there is a direct relationship between price and the quantity supplied.