Microeconomics Chapter 3 Quiz

When the price is _________ the equilibrium price, we would expect there to be a _________, causing the market to put _________ pressure on the price until it went back to the equilibrium price.

Above; surplus; downward

Two goods that are used together are called:

Complements.

When the demand curve shifts to the left and all else is held constant, the

Equilibrium price falls and the equilibrium quantity falls.

Which of the following would cause the demand curve to shift to the right?

Income decreases for an inferior good.

Which of the following would cause a normal good's demand curve to shift to the left?

Income decreases.

The difference between a tax and a subsidy is that when the government places a tax on a good, it _________ the equilibrium price and _________ the equilibrium quantity, whereas when the government places a subsidy on a good, it _________ the equilibrium price and _________ the equilibrium quantity.

Increases; decreases; decreases; increases

Refer to the accompanying diagram. An increase in the number of buyers would cause the demand curve to:

Shift from D1 to D2.

If the cost of flour increases from $3 to $5 a bag, you could predict the supply curve for bagels to:

Shift to the left.

According to the accompanying figure, if the price is $10, there is a:

Surplus of 15 units.

When the government places a tax on a good and all else is held constant, which of the following would most likely to happen?

The overall consumption of the good decreases, assuming the good does not have a vertical demand curve.

Which of the following will cause a movement along a good's supply surve?

The price of the good increases.

According to the figure below, at the price of $5:

The quantity demand is 500.

When the number of firms in a market decreases,

The supply curve shifts to the left.

On January 30, 2012, Starbucks India announced plans to open 50 cafés. What would you expect to happen to the market for coffee in India, assuming all other factors are held constant?

The supply for coffee will increase in India