Economics Chapter 3 Quiz

The law of supply indicates that: A) producers will offer more of a product at high prices then they will at low prices B) The product supply curve is done shopping C) consumers will purchase less of a good at high prices and they will at low prices D) producers will offer more of a product at low prices then they will at high prices

A) A producer will offer more of a product at high prices than they will at low prices

In the last few years, the demand for donuts has greatly increased. This increase in demand might best be explained by: A) a change in buyer tastes B) an increase in the price of coffee C) consumers expecting donut prices to fall D) an increase in the cost of amount donuts

A) a change in buyer tastes

The relationship between quantity supplied in the price is _____, and the relationship between quantity demand and price is _____. A) direct, inverse B) direct, direct C) inverse, direct D) inverse, inverse

A) direct, inverse

Other things equal, if the price of a key resources used to produce product X falls, the: A) product supply curve of X will shift to the right B) product the demand curve of X will shift to the left C) product supply curve of X will shift to the left D) product demand curve of X was shift to the right

A) product supply curve of X will shift to the right

Refer to the diagram. An increase in quantity supplied is depicted by a... A) shift from S2 to S1 B) move from point y to point x C) shift from S1 to S2 D) move from point x to point y

B) Move from point y to point x

A normal good is one: A) Whose amount demanded will decrease as price decreases B) The consumption of which varies directly with incomes C) whose demand curve will shift leftward as income rises D) whose amount demanded will increase as its price

B) The consumption of which varies directly with incomes

A rightward shift in the demand curve for product C might be caused by: A) an increase in income C is an inferior good B) a decrease in the price of a product that is complementary to C C) A decrease in income if C is a normal good D) A decrease in the price of a product that is a close substitute for C

B) a decrease in the price of a product that is complementary to C

Assuming competitive markets with typical supply and demand curves, which of the following statements is correct? A) an increase in supply with no change in demand will result in a decline in sales B) an increase in demand with no change in supply will result in an increase in sales C) an increase in Suomi with a decrease in demand will result in an increase in price D) an increase in supply with no change in demand will result in an increase in price

B) an increase in demand with no change in supply will result in an increase in sales

College students living off campus frequently consume large amounts of Ramen noodles and boxed macaroni and cheese. When they finish school and start careers, their consumption of both goods frequently declines. This suggest that Ramen noodles and boxed macaroni and cheese are.. A) normal good B) inferior goods C) substitute goods D) complementary goods

B) inferior goods

The price of a product increases, we would expect: A) Demand to decrease B) quantity supplied to increase C) Supply to decrease D) quantity demanded to increase

B) quantity supplied to increase

Assume a drought in the great plains reduces the supply of wheat. Since wheat is a basic ingredient in the production of bread, and potatoes are consumers substitute for bread, we would expect the price of wheat to be: A) rise, the supply of bread to increase, and the demand for potatoes to increase B) rise, the supply of bread to decrease, and the demand for potatoes to increase C) rise, the supply of bread to decrease, in the demand for potatoes to decrease D) fall, the supplier bread to increase, and the demand for potatoes to increase

B) rise, the supply of bread to decrease, and the demand for potatoes to increase

If the price of K declines, the demand curve for the complementary product J will: A) remain unchanged B) shift to the right C) decrease D) shift to the left

B) shift to the right

Referred to the diagram. The equilibrium price and the quantity in this market will be.. A) $0.50 and 130 B) $1.60 and 290 C) $1.00 and 200 D) $1.60 and 130

C) $1.00 and 200

Suppose that tacos and pizzas are substitutes, and that soda and pizza or compliments. We would expect a decrease in the price of pizza to: A) reduce the demand for soda and increase the demand for tacos B) increased demand for soda, and reduce the man for taco C) increase the demand for both soda and tacos D) reduce the demand for both soda and tacos

C) Increase the man for soda, and reduce the man for tacos

The law of demand states that: A) consumers will buy more of a product at high prices and at low prices B) Price and quantity demanded are directly related C) Price and quantity demanded inversely related D) The larger the number of buyers in the market, the lower will be product price

C) Price and quantity demanded inversely related

At the point where the demand and supply curves for a product intersect: A) either a shortage or surplus of the product might exist, depending on the degree of competition B) The selling price and the buying price may not be equal C) The quantity that consumers want to purchase and the amount producers choose to sell are the same D) The market may, or may not, be in equilibrium

C) The quantity that consumers want to purchase and the amount producers choose to sell are the same

Assume, in a competitive market, price is initially below the equilibrium level. We predict that price well... A) increase, quantity demanded will increase, and the quantity supplied will decrease B) decrease, quantity demanded and quantity supplied will both decrease C) increase, quantity demanded will decrease, and quantity supplied will increase D) decrease, quantity demanded body crease, and quantity supplied will increase

C) increase, quantity demanded will decrease, and quantity supplied will increase

A government subsidy to the producers of a product.. A) increases product demand B) reduces product supply C) increases product supply D) reduces product demand

C) increases product supply

Refer to the diagram. A decrease in supply is from tied by a.. A) move from point Y to point X B) shift from S1 to S2 C) shift from S2 to S1 D) Move from point X to point Y

C) shift from S2 to S1

Which of the following would NOT shift the demand curve for beef? A) an effective advertising campaign by pork producers B) A widely publicized study that indicates beef increases one's cholesterol C) A change in the incomes of beef consumers D) A reduction in the price of cattle feed

D) A reduction in the price of cattle feed

DVD players and DVDs are: A) inferior goods B) independent goods C) substitute goods D) complementary goods

D) complementary goods

If Z is an inferior good, an increase in money income will shift the: A) demand curve for Z to the right B) supply curve for Z to the left C) supply curve for Z to the right D) demand curve for the to the left

D) demand curve for Z to the left

I leftward shift of a product supply curve might be caused by: A) A decline in the prices of needed inputs B) an increase in consumer incomes C) an improvement in the relevant technique of production D) Some firms leaving an industry

D) some firms leaving an industry

In moving along a supply curve, which of the following is not held constant? A) expectations about the future price of product B) the number of firms producing thus good C) techniques used in producing this product D) the price of the product itself

D) the price of the product itself