ECON 201 midterm

As the price of cookies increases, firms that produce cookies will:

increase the quantity of cookies supplied

The supply curve illustrates that firms

increase the quantity supplied of a good when its price rises

Which of the following is NOT a characteristic of rent controls

Greater availability of apartments

Which of the following is NOT a characteristic of a market in equilibrium?

Neither buyers nor sellers want the price to change

Suppose that a disease that affects people who consume beef has been discovered in the United States. One likely result is

a decrease in demand for beef

Suppose that the equilibrium price of T-shirts increases and the equilibrium quantity of T-shirts decreases. This is best explained by:

a decrease in the supply of T-shirts.

"As the price of personal computers continues to fall, demand increases." This headline is inaccurate because:

a falling price of personal computers increases the quantity demanded, not demand.

When a slice of pizza at the student union sold for $2, Moe did not purchase any. When the price fell to $1.75, Moe purchased a slice each day for lunch. Thus, we can infer that Moe's reservation price for a slice of pizza is

at least $1.75 but less than $2

To understand how the price of a good is determined in a free market, one must account for the desires of:

buyers and sellers

When the demand curve shifts to the right and supply doesn't change:

equilibrium quantity will rise

Suppose that the market price for hot dogs sold by street vendors has just risen from $4.50 to $5.00, and that in response Curly has now begun operating a hot dog cart. We can assume that Curly's reservation price for hot dogs is:

greater than $4.50 but no more than $5.00

The situation described in the book as "smart for one, dumb for all" occurs when:

individuals act rationally, but there are still unexploited opportunities for society as a whole

If an increase in income leads to a decrease in the demand for ground beef, then ground beef is a(n):

inferior good

If supply increases, then

the quantity demanded will increase

Suppose that the price of doughnuts decreases. Given that doughnut holes are a by-product of producing doughnuts, one would expect

the supply of doughnut holes to decrease