ECO 210 Ch.2-3

Refer to the table. In this competitive market, the price and quantity will settle at: Price Per Unit Qd per Year Qs per Year $5 2,000 0 $10 1,800 300 $15 1,600 600 $20 1,400 900 $25 1,200 1,200 $30 1,000 1,500 Question 17 options: A) $15 and 1,600 units B) $10 and 2,000 units C) $25 and 1,200 units D) $20 and 900 units

C) $25 and 1,200 units

Refer to the above diagram for the milk market. In this market, the equilibrium price is ____ and equilibrium quantity is ___. Question 1 options: A) $1.50 per gallon; 28 million gallons B) $1.50 per gallon; 30 million gallons C) $1.00 per gallon; 35 million gallons D) $28 per gallon; 150 million gallons

A) $1.50 per gallon; 28 million gallons

Use the following graph of the demand for coffee: Refer to the diagram of three demand curves for coffee. Which of the following would cause a shift in coffee demand from D1 to D3? Question 6 options: A) A scientific report stating that coffee improves memory B) A decrease in the prices of cream and sugar C) A decrease in the cost of producing coffee D) A decrease in the price of tea

D) A decrease in the price of tea

Which would cause an increase in the supply curve of cell-phone services? Question 2 options: A) A decrease in the wages of phone-company workers B) An increase in the taxes paid by cell-phone service providers C) A decrease in a subsidy given to cell-phone service providers D) An increase in the price of cell-phone services

NOT CORRECT: C) A decrease in a subsidy given to cell-phone service providers OR D) An increase in the price of cell-phone services

The table below shows the weekly demand for hamburger in a market where there are just three buyers. Refer to the Price Buyer 1 Qd Buyer 2 Qd Buyer 3 Qd $6 7 4 6 $5 9 7 8 $4 15 10 12 $3 21 15 16 table. At a price of $6, the weekly market quantity demanded for hamburger is: Question 5 options: A) 17 B) 23 C) 18 D) 24

A) 17`

Which is an example of barter? Question 4 options: A) A person trades a desk for a box of tools B) The purchase of stock on the New York Stock Exchange C) A person buys clothes at a used clothing store D) A gift of tuition money from parents to their children

A) A person trades a desk for a box of tools

If the market price is above the equilibrium price: Question 23 options: A) A surplus will occur and producers will produce less and lower prices B) A shortage will occur and producers will produce more and lower prices C) Producers will make extremely high profits D) A surplus will result and consumers will bid prices up

A) A surplus will occur and producers will produce less and lower prices

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain: Question 28 options: A) Allocative efficiency B) Productive efficiency C) Minimum opportunity costs D) Maximum process and revenues

A) Allocative efficiency

Refer to the graph showing the market for a product. Which of the following could not explain the indicated increase in equilibrium price from P1 to P2? Question 25 options: A) An increase in production costs B) An increase in consumer incomes C) A decrease in the price of a complementary product D) An increase in the price of a substitute product

A) An increase in production costs

Assume that the graphs show a competitive market for the product stated in the question. Select the graph that best shows the change in the market specified in the following situation: In the market for leather coats, when leather coats become more fashionable among young consumers. Question 15 options: A) Graph A B) Graph B C) Graph D D) Graph C

A) Graph A

In a command system: Question 12 options: A) The government makes production and allocation decisions B) Market traders command what outputs are produced and how they are allocated C) Self-interest motivates and commands each business firm's decisions and actions D) The head of each family decides what to do with the family's resources

A) The government makes production and allocation decisions

If an economy is being "productively efficient," then that means the economy is: Question 11 options: A) Using the least costly production techniques B) Producing the products most wanted by society C) Maximizing the returns to factors of production D) Fully employing all economic resources

A) Using the least costly production techniques

Which of the following factors is a "demand shifter" for new houses? Question 8 options: A) Wages for construction workers B) The price of lumber C) The interest rates on mortgage loans D) The price of new houses

B) The interest rates on mortgage loans NOT CORRECT: D) The price of new houses

Refer to the graph, which shows the market for bicycles. S1 and D1 are the original supply and demand curves. D2 and D3 and S2 and S3 are possible new demand and supply curves. Starting from the initial equilibrium (point 1), which point on the graph is most likely to be the new equilibrium after the introduction of technological improvements in bicycle production, and successful publicity campaigns by the government on the virtues of bicycling to work? Question 18 options: A) 4 B) 5 C) 6 D) 3

B) 5

The price of pork may increase as a result of: Question 9 options: A) A subsidy to pork producers B) An increase in the cost of producing beef C) A decrease in the cost of feed for pigs D) Decreased advertising of pork

B) An increase in the cost of producing beef

Assume that the graphs show a competitive market for the product stated in the question. Select the graph that best shows the change in the market specified in the following situation: In the market for houses, when consumers experience a substantial fall in income due to a serious economic recession. Question 29 options: A) Graph A B) Graph B C) Graph C D) Graph D

B) Graph B

A headline reads "Lumber Prices Up Sharply." In a competitive market, this situation would lead to a(n): Question 16 options: A) Increase in the price and quantity of new homes B) Increase in the price of new homes and decrease in quantity C) Decrease in the price of new homes and increase in quantity D) Decrease in the price and quantity of new homes

B) Increase in the price of new homes and decrease in quantity

All of the following would affect the position of the supply curve for cranberries, except the: Question 10 options: A) Development of a new pest control for cranberries B) Popularity of cranberry drinks C) Price of agricultural land for cranberries D) Cost of fertilizers for cranberry production

B) Popularity of cranberry drinks

Refer to the graph, which shows the market for bicycles. S1 and D1 are the original supply and demand curves. D2 and D3 and S2 and S3 are possible new demand and supply curves. Starting from the initial equilibrium (point 1), which point on the graph is most likely to be the new equilibrium after an increase in wages of bicycle workers, and a significant increase in the price of gasoline? Question 26 options: A) 6 B) 5 C) 4 D) 3

C) 4

Which of the following would cause a leftward shift in the supply curve for car washes? Question 24 options: A) An increase in the number of cars in the city B) A decrease in taxes on car washes C) An increase in the price of car washing equipment D) A decrease in the price of water

C) An increase in the price of car washing equipment

An "increase in the quantity supplied" suggests a: Question 7 options: A) Rightward shift of the supply curve B) Leftward shift of the supply curve C) Movement up along the supply curve D) Movement down along the supply curve

C) Movement up along the supply curve

If product Y is an inferior good, a decrease in consumer incomes will: Question 13 options: A) Shift the demand curve for product Y to the left B) Make buyers want to buy less of Product Y C) Shift the demand curve for product Y to the right D) Not affect the sales of product Y

C) Shift the demand curve for product Y to the right

Which of the following is not a determinant of demand for laptop computers? Question 19 options: A) Expectations about the future price of laptop computers B) Income of buyers of laptop computers C) The cost of inputs for producing laptop computers D) The prices of related goods such as software and iPads

C) The cost of inputs for producing laptop computers

Other things being equal, the law of demand suggests that as: Question 14 options: A) The demand for iPads increases, this will cause the price to increase B) The price of iPads decreases, the quantity demanded will decrease C) The price of iPads decreases, the quantity demanded will increase D) Income increases, the quantity of iPads demanded will increase

C) The price of iPads decreases, the quantity demanded will increase

Economic systems differ from one another based on who own the factors of production and: Question 21 options: A) What kinds of products are produced in the economy and how plentiful they are B) How much resources are available in the economy and where they are located C) Who make decisions regarding what to produce and how it is produced D) How big the population is, and the makeup of the population

C) Who make decisions regarding what to produce and how it is produced

In a competitive market illustrated by the diagram, a price ceiling of $10 per unit will result in: Question 27 options: A) A surplus of 200 units B) A surplus of 250 units C) A shortage of 250 units D) A shortage of 200 units

D) A shortage of 200 units

Suppose that a more efficient way to produce a good is discovered, thus lowering production costs for the good. This will cause a(n): Question 30 options: A) Decrease in quantity supplied B) Decrease in supply C) Increase in quantity supplied D) Increase in supply

D) Increase in supply

An increase in the price of digital cameras will result in a(n): Question 3 options: A) Shift of the demand curve for digital cameras to the right B) Shift of the demand curve for digital cameras to the left C) Decrease in the demand for digital cameras D) Movement up and to the left along the demand curve for digital cameras

D) Movement up and to the left along the demand curve for digital cameras

Which of the following best describes the "invisible hand" concept? Question 20 options: A) The problem of scarcity can best be overcome in a system of mixed capitalism B) Ample regulation of business by the government will maximize the public's best interests C) The market system works best when resources are free to move from one use to another D) Self-interest in a market system will automatically promote the public interest as well

D) Self-interest in a market system will automatically promote the public interest as well

Laissez-faire capitalism limits the government's economic functions to the following, except: Question 22 options: A) Preventing individuals and firms from coercing others B) Establishing a legal environment to enforce contracts among individuals C) Protecting private property rights D) Setting prices of individual goods and services

D) Setting prices of individual goods and services