Chapter 3

Which of the following will not shift the demand curve for natural gas? A change in consumer expectations. A change in the weather and heating requirements. A change in consumer income. A change in the technology used to produce natural gas.

A change in the technology used to produce natural gas.

If demand is constant, a leftward shift in the supply curve will result in: A decrease in equilibrium quantity and a higher equilibrium price. An increase in equilibrium quantity and a lower equilibrium price. An increase in equilibrium quantity and a higher equilibrium price. A decrease in equilibrium quantity and a lower equilibrium price.

A decrease in equilibrium quantity and a higher equilibrium price.

Government price guarantees for certain crops are an example of: A price ceiling. A monopoly. The market mechanism. A price floor.

A price floor.

People benefit by participating in the market because: Participants in the market do not have to make choices. It facilitates specialization and increased consumption. Buyers and sellers have the same goals. Resources are no longer limited.

It facilitates specialization and increased consumption.

Ceteris paribus, the quantity demanded of a good will decrease in response to: A higher price for the good. A rightward shift of the supply curve. A lower price for the good. Higher income.

A higher price for the good.

Refer to Figure 3.1. Consider the market for desktop computers. Consumers decide they like laptop computers better than desktops. D A C B

C

When a price ceiling is set for a market, the quantity demanded will be: Greater than the equilibrium quantity, and price will be greater than the equilibrium price. Less than the equilibrium quantity and price will be less than the equilibrium price. Less than the equilibrium quantity, and price will be greater than the equilibrium price. Greater than the equilibrium quantity, and price will be less than the equilibrium price

Greater than the equilibrium quantity, and price will be less than the equilibrium price

Surpluses are the same thing as excess: Supply caused by price floors. Supply caused by price ceilings. Demand caused by price ceilings. Demand caused by price floors.

Supply caused by price floors.

The invisible hand is most consistent with: The use of price ceilings. Government failure. A market surplus. The market mechanism without government interference.

The market mechanism without government interference.

In Figure 3.2, the highest price at which buyers are willing and able to purchase 5 units is: $20. $30. $40. $50.

50

One HEADLINE article in the text, "Hurricane Sandy to Raise Prices on Used Cars" describes the impact of thousands of cars being destroyed by the storm. What will happen to the equilibrium quantity of used cars if the supply decreases? Increase. Either increase or decrease based on the slope of the supply curve. Decrease. Remain unchanged.

Decrease

A market in which finished goods and services are exchanged is a: Product market. Intermediate-goods market. Financial market. Factor market.

Product market.

Producers: Do not participate in the factor market. Provide factors of production to the product market. Provide dollars to the product market. Purchase factors of production from the factor market.

Purchase factors of production from the factor market.

Economic interactions with others are necessary because: Some people are rich and others are poor. Resources are limited. People are lazy. Advertising makes us want additional goods and services.

Resources are limited.

Ceteris paribus, which of the following will cause the supply of paper to decrease? The price of lumber, an ingredient in paper production, increases. The technology used to produce paper improves. People rely more on electronic books and less on printed materials. The federal government decides to subsidize the production of paper.

The price of lumber, an ingredient in paper production, increases.

According to the law of demand, a change in _______ causes a movement along the demand curve. The number of buyers Buyers' expectations The price of the good The price of other related goods

The price of the good

A market is said to be in equilibrium when: The buying intentions of all consumers are realized. The supply intentions of all sellers are realized. The quantity demanded equals the quantity supplied. Demand is fully satisfied at all alternative prices.

The quantity demanded equals the quantity supplied.

If demand is constant, a decrease in the supply of gasoline will cause the equilibrium price: And quantity both to fall. To rise and quantity to fall. To fall and quantity to rise. And quantity both to rise.

To rise and quantity to fall. Supply goes up and demand goes down

Which of the following is not a factor of production? Labor. Land. Capital. Wages.

Wages.

The quantity of a good demanded in a given time period increases as the price falls, which is known as: The opportunity cost. The law of ceteris paribus. Say's Law. The law of demand.

law of demand