Econ test answers
The price elasticity of demand for a particular good is influenced by which of the following factors?
(B and c) B) the income of the buyers C) the availability of substitutes
What is the equilibrium quantity in this wheat market?
6,000
An announcement that smoking will harm your ability to think clearly will most likely result in:
A decrease in the demand for cigarettes
What of the following will result in an increased price of milk?
A shift to the right of the demand curve for milk
The government imposes a price ceiling below the equilibrium price. The price ceiling will cause:
A shortage of the good
The likely result of a price floor is:
A surplus of the good at a price above the market equilibrium price
The economist who stated that self interest leads to efficient markets and quality goods was
Adam Smith
Which of the following factors cause a movement along the demand curve?
Change in price of the good
If goods A and Z are complements, an increase in price of good Z will:
Decrease the demand for good A
Prices help encourage the best level of production by:
Discouraging overconsumption and overproduction
According to economists, equilibrium exists when
No individual has an incentive to change his or her behavior
Supposed the president of a college argues that a 25 percent tuition increase will raise revenues for the college. It can be concluded that the president thinks that demand to attend this college is:
Inclastic, but not perfectly inclastic
A technological advance in the production of automobiles will
Increase the supply of automobiles
The demand for concert tickets is:
Inelastic
If the government imposes rent control:
It may result in some landlords leaving the business because they cannot cover costs
A blinding price ceiling is designed to:
Keep prices low
The typical supply curve illustrates that:
Other things equal, the quantity supplied of a good is positively related to the price of a good.
A minimum price set above the equilibrium price is a:
Price floor
You notice that that the price of DVD players falls and the quantity of DVD players sold increases. This set of observations can be the result of the:
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When the price of lamps increases, the
Quantity demanded increases
When a market in in equilibrium, one will find that the:
Quantity demanded is equal to quantity supplied
If a price of $8 temporarily exists in this market, a:
Surplus of 4,000 bushels will result
High fructose corn syrup, which is derived from corn, is an important ingredient in the production of many soft drinks. If the price of corn increases, one would expect:
The supply curve for soft drinks to shift left
In the local market for coffee, what would happen if Joyce's Java and Everyday Joe's cofee shops go out of business?
The supply curve shifts to the left
A product would be more demand price inelastic:
The shorter the time the consumer has to adjust to price changes
A good is normal if:
When income increases, the demand increases
When economy suffers a downtown, vacationers are more likely to take car trips than to fly. Which of the following provides the most reasonable explanation for this?
Air travel is a normal good and vacation travel by car is an inferior good
Suppose that the average cost of a doctor's visit is $100. If the government impose a price a price ceiling of $50 on the cost of a doctor's visit, there will be:
An excess demand for doctor's visits
Suppose the input costs associated with manufacturing half-replacement medication decreases over time. This would lead to:
An i crease in the supply of such treatments, lower prices, and an increase in the equilibrium quantity.
If demand is price elastic, a decrease in price causes:
An i crease in total revenue
Which of the following would shift the demand curve for new textbooks to the right?
An increase in college enrollements
The law and deman states that, other things equal:
As price increases, quantity demanded will decreases
Given the equilibrium after a change in supply from S1 to S2:
At the old price of $2.50, there will be pressure for the price to fall
The demand curve for concert tickets shown above is classified as:
Elasticity
Demand price elasticity measures:
How consumers change their purchases in response to a change in the price of a project
Equilibrium occurs at the price of_____________ and the equilibrium quantity is equal to ___________.
P2;Q3
If sam, the Pizza Man, lowers the price of his pizzas from $6 to $5 and finds that sales increase from 400 to 600 pizzas per week, then the demand for Sam's pizzas in this range is:
Price elastic
If rent controls are imposed, they will most Likely be set at either __________ or ___________.
Rent 0; Rent
Which of the following will cause the equilibrium price to rise and the equilibrium quantity to fall?
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Suppose you manage a corner grocery store. If peanut butter is an inferior good, what do you supposed would happen to the price and quantity of peanut butter as incomes fall during an economic recession.
The price and quantity would both increase