ECON 2000 Exam 1 Test

Chips and Salsa

A likely example of complementary goods for most people would be

Sb to Sa

All else equal, an increase in the price of the pulp used in the paper production process

surplus of 400 units.

At a price of $35, there would be a

30$

At what price would there be an excess supply of 200 units of the good?

New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy.

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously.

Equilibrium price must decrease when demand

an increase in the demand for muffins

If muffins and bagels are substitutes, a higher price for bagels would result in

0 units

If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is

is unaffected, and the supply of tires could increase, decrease, or stay the same.

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

surplus to exist and the market price of roses to decrease.

Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

a decrease in the demand for energy drinks.

Suppose scientists provide evidence that people who drink energy drinks are more likely to have a heart attack than people who do not drink energy drinks. We would expect to see

Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.

Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good?

The prices of food and the wages of farmers would adjust.

Suppose the United States had a short-term shortage of farmers. Which market mechanisms would adjust to remove the shortage?

Buyers would not be willing to buy as much as before at each relevant price

Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event?

an increase in demand

The shift from Da to Db is called

improvement in production technology

The shift from S to S' could be caused by an

can affect today's supply

Today, producers chnaged their expectations about the future. This change

increases

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Quantity will fall, and the effect on price is ambiguous.

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?

A decrease in consumer income

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

A decrease in the price of wool shirts and a decrease in the price of raw cotton

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

There is no free entry or exit

Which of the following is not a characteristic of a perfectly competitive market

price

Which of the following is not held constant in a demand schedule

Point C to Point D

Which of the following movements would illustrate the effect in the market for bullet-proof vests of an increase in the price of Kevlar, the material used to make the vests?

Point A to Point B

Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

market

a group of buyers and sellers of a particular good or service is called

an inferior good

currently, you purchase ten frozen pizzas per month. you will graduate from college in December, and you will start a new job in January. You have no plans to purchase frozen pizzas in January. For you, frozen pizzas are

rises, the quantity demanded of the good rises

the law of demand states that, other things equal, when the price of a good

an increase in quantity demanded

the movement from point A to point B on the graph shows

an increase in supply

the shift from S to S' is called

An increase in consumer income, assuming gasoline is a normal good

which of the following would shift the demand curve for gasoline to the right?