ECON Ch 4 ?'s

A price ceiling imposed by the government will have an impact only if: a. it is set below the equilibrium price in a market. b. it is set at the equilibrium price in a market. c. it increases competition among suppliers in a market. d. it increases competition among consumers in the market.

a

A summer in Miami turned out to be warmer than usual, causing people to consume more cola. This can be represented by: a. a rightward shift of the demand curve for cola. b. a leftward shift of the demand curve for cola. c. an upward movement along the demand curve for cola. d. a downward movement along the demand curve for cola

a

An increase in the proportion of teenagers in the total population of a country is likely to: a. shift the market demand curve for pizza rightward. b. result in a downward movement along the market demand curve for pizza. c. result in an upward movement along the market demand curve for pizza. d. shift the market demand curve of pizza leftward.

a

When the equilibrium price of an apple is $0.75, the individual supplies of apples from three apple orchards are 460, 580, and 700 apples respectively. Identify the correct statement from the following. a. The market demand at $0.75 is 1,740 apples. b. If the price rises above $0.75, the market supply will be lower than 1,740 apples. c. If the price rises above $0.75, there will be an excess demand for apples in the market. d. The market supply at $0.75 is 1,540 apples.

a

Which of the following would cause a downward movement along the demand curve for a normal good, leading to an increase in the quantity demanded? a. A decline in the price of the good. b. A decrease in the price of a substitute good. c. An increase in the price of a complementary good. d. Consumer expectations that the good will become more expensive in the near future.

a

Which of the following would cause an upward movement along the supply curve of hamburgers? a. An increase in the market price of hamburgers. b. A fall in the price of substitutes like pizzas. c. An increase in the price of beef. d. A fall in market demand for hamburgers

a

As personal income increases, consumers are willing and able to buy more of a good at each price. This causes:

a rightward shift of the demand curve

A decrease in the price of cocoa will most likely lead to: a. a decrease in the supply of chocolate. b. an increase in the supply of chocolate. c. a decrease in the demand for chocolate. d. an increase in the demand for chocolate.

b

Suppose the market for fresh California navel oranges was in equilibrium before an unanticipated freeze destroyed half of the California navel orange crop. If all other factors affecting supply or demand are assumed to have remained unchanged, which of the following is likely to be true? a. The demand for navel oranges will decrease, resulting in a lower market equilibrium price and quantity. b. The supply of navel oranges will decrease, resulting in a higher market equilibrium price and a lower market equilibrium quantity. c. Both supply and demand will increase, resulting in an increase in equilibrium quantity and an indeterminate change in price.

b

Suppose the market for pretzels is in equilibrium. It is discovered that high consumption of pretzels increases the risk of heart diseases. As a result of this, _____. a. the equilibrium price of pretzels will decrease and the equilibrium quantity of pretzels will decrease b. both the equilibrium price and quantity of pretzels will decrease c. the equilibrium price of pretzels will decrease and the equilibrium quantity of pretzels will increase d. both the equilibrium price and quantity of pretzels will increase

b

Suppose the price of petrol is expected to fall in the future. As a result, the current demand for it decreases and the current supply increases. However, the change in supply is much greater than the change in demand. Thus, _____. a. both the equilibrium quantity and price of petrol will increase b. the equilibrium quantity of petrol will increase and the equilibrium price of petrol will decrease c. the equilibrium quantity of petrol will decrease and the equilibrium price of petrol will increase d. both the equilibrium quantity and price of petrol will decrease

b

When the price of wheat increases, _____. a. the consumers of bread will be willing to buy more bread at the current price b. the producers of bread will supply less bread at each price c. the producers of bread will be willing to produce more bread at each price, but will not be able to supply as much as they want to d. the consumers of bread will be both willing and able to buy more bread at the current price

b

Which of the following is likely to shift the supply curve of pizza rightward? a. A higher price of pizza that makes existing producers more willing to increase the quantity supplied. b. A new, high-tech oven that costs the same as existing ovens and bakes pizza in half the time. c. A new medical report claiming that eating pizza increases the risk of heart attacks. d. A higher price of pizza that makes potential producers less willing to supply pizza.

b

A pest attack destroys half of the California navel orange crop. Simultaneously, the price of kiwifruit, a substitute for navel oranges, falls. As a result, _____. a. the demand for navel oranges would decrease but the supply would remain unchanged, resulting in a lower market equilibrium price and quantity b. the supply would decrease and the demand would increase, resulting in a higher market equilibrium price and an indeterminate change in market equilibrium quantity c. both supply and demand would decrease, resulting in a decrease in equilibrium quantity and an indeterminate change in price d. both supply and demand would increase, resulting in an increase in equilibrium quantity and an indeterminate change in price

c

Price floors and ceilings: a. shift the demand curve for a good leftward. b. restore equilibrium in a market and increase economic welfare. c. cause market disequilibrium and reduce economic welfare. d. shift the supply curve for a good rightward.

c

Suppose there are only three consumers—John, James, and Erin—in the market for strawberries. At a price of $3 per box of strawberries, the market demand is 72 boxes of strawberries per day. At this price, John has a demand for 17 boxes of strawberries per day and Erin has a demand for 23 boxes of strawberries per day. Which of the following is true? a. If the price of strawberries increases to $3.50 per box of strawberries, the quantity demanded of strawberries will most likely increase for all consumers. b. At a price of $4, the market demand will be 72 boxes of strawberries per day. c. At a price of $3, James has a demand of 32 boxes of strawberries per day. d. If the price of a box of strawberries decreases to $2.50 per box of strawberries, the demand for strawberries will most likely decrease for all consumers.

c

Suppose two things happen simultaneously that impact the equilibrium in the computer software market. First, technological innovation lowers the cost of producing computer software. Second, the price of computer hardware, a complement to computer software, declines. Which of the following is likely to be true in this case? a. The demand for software would decrease and supply would remain unchanged, resulting in a lower market equilibrium price and quantity. b. The supply of software would decrease and the demand would increase, resulting in a higher market equilibrium price and an indeterminate change in market equilibrium quantity. c. Both the supply of software and the demand for software would increase, resulting in an increase in equilibrium quantity and an indeterminate change in price. d. Both the supply of software and the demand for software would increase, resulting in a decrease in equilibrium quantity and a decrease in price.

c

The government of Almenia imposes a ceiling on the price of bread. Which of the following is most likely to be true? a. The market is likely to remain in equilibrium even after the price ceiling is imposed. b. As the government tries to ensure that most people can at least afford bread, an imposition of price ceiling is likely to raise economic welfare in Almenia. c. A ceiling on the price of bread will cause an excess demand for bread in the market. d. A ceiling on the price of bread implies that the current price of bread in Almenia is higher than what the equilibrium price would have been.

c

Which of the following is most likely to increase the supply of corn? a. New medical reports claiming that eating corn bread increases risk of heart attacks. b. The government eliminating subsidies formerly paid to corn farmers. c. The price of soybeans dropping substantially and soybean farmers can also grow corn. d. The farm workers union successfully negotiating a pay increase for corn harvest workers

c

Which of the following would most likely cause a consumer to increase the demand for veggie burgers? a. A decline in the price of veggie burgers. b. An increase in the prices of some of the vegetables used for the burger. c. An increase in the price of tofu burgers, which are perceived as substitutes for veggie burgers. d. An increase in the price of burger buns.

c

Improved technology has reduced the risk of grain loss during storage. If wheat farmers expect wheat prices to rise substantially in about four months, which of the following is likely to be true? a. The supply of wheat is likely to increase immediately. b. The expectation of higher prices in the future is unlikely to have any impact on current wheat supply. c. The price of wheat breads is likely to decline in the future. d. The current supply of wheat will decline as farmers store wheat in anticipation of the higher prices

d

Other things remaining constant, the substitution effect of a price change implies that a fall in the price of burgers: a. increases the opportunity cost of burgers. b. decreases the demand for burgers. c. increases the purchasing power of consumers. d. decreases the demand for sandwiches

d

Suppose a company trying to increase profits sells its laptops at a price that is higher than the equilibrium price of laptops in the market. Which of the following is likely to happen as a consequence? a. The equilibrium price of laptops will decrease. b. The equilibrium price of laptops will increase to the level charged by this brand. c. There will be an excess demand for this particular brand of laptops in the market. d. There will be an excess supply of this particular brand of laptops in the market.

d

Suppose a firm uses a particular machine to manufacture steel bolts and screwdrivers. A drop in the price of steel bolts, with the price of screwdrivers unchanged, will most likely lead to: a. a decrease in the quantity demanded of steel bolts. b. a decrease in the production of screwdrivers. c. a decrease in the demand for steel bolts. d. an increase in the production of screwdrivers

d

Suppose the federal government provides wheat farmers with an effective price floor, or a guaranteed minimum price. Which of the following is likely to be true? a. The market is likely to remain in equilibrium even after the price floor is imposed. b. It will increase economic welfare. c. It will cause an excess demand for wheat in the market. d. The price floor set by the government is higher than the equilibrium price

d

Suppose the government in Candora sets a minimum wage for unskilled labor. As a result, _____. a. competition among unskilled labor will exert an upward pressure on the minimum wage b. there will be a shortage of unskilled labor in Candora c. the money income of unskilled labor in Candora will decrease d. the overall economic welfare in Candora will decrease

d

Suppose there is a tsunami in Japan, which is a major supplier of external storage devices. As a result, the supply of external storage devices decreases. However, the market demand for external storage devices increases. Thus, _____. a. both the equilibrium price and quantity of external storage devices decrease b. both the equilibrium price and quantity of external storage devices increase c. the change in equilibrium price of external storage devices is indeterminate and the equilibrium quantity of external storage devices decreases d. the equilibrium price of external storage devices increases and the change in the equilibrium quantity of external storage devices is indeterminate

d

Suppose there is an increase in the incidence of polio in a country. This will most likely result in: a. a downward movement along the market demand curve for polio vaccinations. b. a leftward shift of the market demand curve for polio vaccinations. c. an upward movement along the market demand curve for polio vaccinations. d. a rightward shift of the market demand curve for polio vaccinations.

d

Which of the following is true of the market demand curve for a good? a. It shows the quantities of a good demanded by a consumer at various income levels. b. It is the sum of the individual demand curves of all consumers with the same income. c. It is an upward-sloping curve that is the sum of the individual downward-sloping demand curves of all consumers in the market. d. It is the sum of the individual demand curves of all consumers in the market

d

Which of the following varies along the supply curve of a good? a. The state of technology. b. Consumer expectations. c. The prices of other goods. d. The price of the good.

d

A fall in the price of sodas will result in a(n):

decrease in quantity supplied

If the price of tofu falls, the quantity of tofu demanded will increase. This will be indicated by a(n):

downward movement along the demand curve for tofu

If consumers expect the price of gasoline to increase tomorrow, the demand for gasoline is likely to _____ today.

increase

As money income increases, consumers tend to substitute used furniture with new furniture. Used furniture is an example of a(n):

inferior good

Other things remaining constant, a higher price for a good _____ that good.

makes producers more willing to increase the quantity supplied of

A technological innovation in the market for computer software will most likely result in a(n) _____ the supply curve of computer software

rightward shift of

A yearly performance appraisal rewarded an employee with a 25 percent hike in the salary. This can:

shift the demand curve rightward

The law of supply states that:

the price and quantity supplied of a product are positively related

When a market is in equilibrium, ___________.

the quantity demanded is equal to the quantity supplied

Demand is the relationship between the price of a good and:

the quantity of the good consumers are willing and able to buy