Macro 3

Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left, ceteris paribus. Steel: The government introduces environmental restrictions on the dumping of wastes from producing steel.

A

A decrease in the price of electricity can best be explained by:

A decrease in the population.

Ceteris paribus, which of the following is most likely to cause an increase in the quantity demanded of perfume?

A decrease in the price of perfume

A lower quantity demanded of a good reflects, ceteris paribus:

A higher price of the good.

Peanut butter and jelly are complements. A decrease in the price of one will result in:

An increase in the demand for the other.

Ceteris paribus, which of the following is most likely to cause an increase in the quantity supplied of perfume?

An increase in the price of perfume

Flat screen TVs: The technology required for flat screen TVs production becomes cheaper.

B.

In Table 3.1, if the price is $4 the market will:

Be in equilibrium.

Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left, ceteris paribus. Candy bars: People become more health-wise and prefer power bars instead of candy bars.

C

Which of the following is purchased in a product market?

Cell phone service

Designer clothes: Consumer confidence in the economy improves.

D.

A leftward shift of the market demand curve for HDTVs, ceteris paribus, causes equilibrium price to:

Decrease and quantity to decrease.

In Table 3.1, if the price is $2 the market will:

Experience a shortage of 22 units.

In Table 3.1, if the price is $8 the market will:

Experience a surplus of 56 units.

A change in demand means there has been a shift in the demand curve, and a change in quantity demanded:

Means that price has changed and there is movement along the demand curve.

Which determinant of demand changes in the personal computer market as more individuals become interested in "surfing the Internet"?

Number of buyers

A rightward shift of the market demand curve for MP3 players, ceteris paribus, causes equilibrium:

Price to increase and quantity to increase.

In a market economy, which of the following determines the answer to the WHAT to produce question?

Prices and profit.

When a surplus exists for a product:

Producers reduce the level of output and reduce price.

A market in which final goods and services are exchanged is a:

Product market.

The goal of the business firms in a market economy is to maximize:

Profits.

Suppose a hurricane hits Florida causing widespread damage to houses and businesses. The governor of Florida places a price ceiling on all building materials to keep the prices reasonable. Which of the following is the most likely result?

Shortages of building materials and a slower recovery from the storm.

If there is a shortage at a given price, then:

That price is less than the equilibrium price.

In 2007 a company sold 35,000 MP3 players at $150 each. In 2008 the same company sold 40,000 MP3 players at $170 each. This information suggests that:

The demand for MP3 players increased from 2007 to 2008.

Which of the following can change without shifting either demand or supply, ceteris paribus?

The price of the good itself