Microeconomics Quiz 2 Questions
If price is on the vertical axis and quantity demanded is on the horizontal axis, why is a demand curve downward sloping (left to right)?
Because a demand curve is the graphical representation of the law of demand, which specifies an inverse relationship between price and quantity demanded, ceteris paribus.
Which of the following statements represents a correct and sequentially accurate economic explanation?
Goods X and Y are substitutes. The price of X falls, the quantity demanded of X rises, and the demand for Y falls.
One point on a market supply curve represents $4 and 100 units quantity supplied. If there are three suppliers, and at a price of $4 one of the suppliers supplies 23 units, then which of the following combinations of price and quantity supplied might hold for the other two suppliers?
At $4, quantity supplied could be 40 units for one supplier and 37 for the other.
Which of the following illustrates the law of demand?
A and C
An increase in the expected price of corn would likely do the following to the current supply and demand for corn:
increase the demand, but decrease the supply.
The law of demand states that price and quantity demanded are
inversely related, ceteris paribus.
If the demand for computer software rises as incomes rise, this tells us that computer software is a (an)
normal good
An "increase in the quantity demanded" means that
price has declined and consumers therefore want to purchase more of the good.
A "decrease in the quantity demanded" means that
price has increased and consumers therefore want to purchase less of the good.
An increase in the number of buyers in a particular market for a good will result in a ___________________ for that good.
rightward shift in the demand curve
At a price of $9.99, Danielle buys 3 digital books per month. When the price decreases to $7.99, Danielle buys 4 digital books per month. Jason says that Danielle's demand for digital books has increased. Is Jason correct?
No, Jason is incorrect. Danielle's quantity demanded has increased, but her demand has stayed the same.
To an economist, an increase in demand means the same thing as an increase in quantity demanded.
False
When a market is in disequilibrium, such as when the quantity supplied of a good is greater than the quantity demanded of that good, the price of the good will rise, ceteris paribus.
False
__________ is the number of units that individuals are __________ to buy at a particular price during some time period.
Quantity demanded; willing and able
When income rises for the buyers of good X, the ____________ curve for good X will shift ________________.
This question cannot be answered unless we know whether good X is a normal good, a neutral good, or an inferior good.
If the government increased licensing requirements for beauty salons, the supply curve for salon services would shift to the left.
True
If the quantity demanded of good X is greater than the quantity supplied of good X, then the market for good X is in disequilibrium.
True
An advance in technology in the production of good X causes
a rightward shift in the supply curve for good X
Which of the following pairs of goods would be most likely to be complements?
DVD's and DVD players
An increase in supply is graphically represented by a leftward shift of the supply curve.
False
Demand takes into account goods, but not services.
False
A rightward shift in the demand curve for tennis balls could be caused by
a fall in the price of tennis rackets.
Resource X is necessary to the production of good Y. If the price of resource X rises,
the supply curve of Y shifts leftward.
One reads in the newspaper: "Today the president and Congress enacted a law which adds new requirements that child care providers must meet before they can offer their services for sale." As a result, an economist would predict that
the supply of child care services will decrease, thus raising the price of child care services.
"As the price of apples goes up, the demand for apples goes down." The author of this statement
uses the word "demand" when he should use the words "quantity demanded."