Economics Homework 2

A improvement in production technology will shift the Select one: a. supply curve to the right. b. demand curve to the right. c. demand curve to the left. d. supply curve to the left.

a

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates Select one: a. the ticket price was below the equilibrium price. b. the ticket price was at the equilibrium price. c. nothing about the equilibrium price. d. the ticket price was above the equilibrium price.

a

A decrease in the price of a good will Select one: a. increase demand. b. increase quantity demanded. c. decrease demand. d. decrease quantity demanded

b

A shortage exists in a market if Select one: a. quantity supplied exceeds quantity demanded. b. the current price is below its equilibrium price. c. there is an excess supply of the good. d. All of the above are correct.

b

A surplus exists in a market if Select one: a. All of the above are correct. b. the current price is above its equilibrium price. c. quantity demanded exceeds quantity supplied. d. there is an excess demand for the good.

b

What would happen to the equilibrium price and quantity of lattés if the cost of producing steamed milk, which is used to make lattés, rises? Select one: a. Both the equilibrium price and quantity would decrease. b. The equilibrium price would increase, and the equilibrium quantity would decrease. c. Both the equilibrium price and quantity would increase. d. The equilibrium price would decrease, and the equilibrium quantity would increase.

b

When the price of a good is higher than the equilibrium price, Select one: a. a shortage will exist. b. buyers desire to purchase more than is produced. c. sellers desire to produce and sell more than buyers wish to purchase. d. quantity demanded exceeds quantity supplied.

c

A downward-sloping demand curve illustrates Select one: a. the relationship between income and quantity demanded. b. that prices fall over time. c. the law of demand. d. that demand decreases over time.

c

A likely example of complementary goods for most people would be Select one: a. butter and margarine. b. cola and lemonade. c. chips and salsa. d. lawnmowers and automobiles.

c

A very hot summer in Atlanta will cause Select one: a. the demand curve for lemonade to shift to the left. b. a movement downward and to the right along the demand curve for tank tops. c. the demand for jackets to decrease. d. the demand for air conditioners to decrease.

c

When we move along a given supply curve, Select one: a. all determinants of quantity supplied are held constant. b. technology and price are held constant. c. all nonprice determinants of supply are held constant. d. only price is held constant.

c

A likely example of substitute goods for most people would be Select one: a. peanut butter and jelly. b. televisions and subscriptions to cable television services. c. tennis balls and tennis rackets. d. pencils and pens.

d

A market demand curve shows Select one: a. the sum of all prices that individual buyers are willing and able to pay for each possible quantity of the good. b. the relationship between price and the number of buyers in a market. c. how quantity demanded changes when the number of sellers changes. d. how much of a good all buyers are willing and able to buy at each possible price.

d

A market supply curve is determined by Select one: a. finding the average quantity supplied by sellers at each possible price. b. finding the average price at which sellers are willing and able to sell a particular quantity of the good. c. vertically summing individual supply curves. d. horizontally summing individual supply curves.

d

If a good is inferior, then an increase in income will result in Select one: a. increase in the demand for the good. b. movement up and to the left along the demand curve for the good. c. movement down and to the right along the demand curve for the good. d. decrease in the demand for the good.

d

In a market economy, supply and demand are important because they Select one: a.are direct policy tools used by government agencies to regulate the economy. b.All of the above are correct. c.illustrate when an market is in equilibrium, but they are not helpful when a market is out of equilibrium. d. can be used to predict the impact on the economy of various events and policies.

d

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause aNo Select one: a. decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar. b. decrease in the supply of sugar and a decrease in the quantity demanded of sugar. c. increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar. d. decrease in the demand for sugar and a decrease in the quantity supplied of sugar.

d

Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market? Select one: a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b. None of the above is correct. c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

d

Which of the following sets of events must cause an increase in the price of a new house? Select one: a. higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the future b. lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future c. lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future d. higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future

d

Which of the following would shift the supply of Packers football jerseys to the right? Select one: a. The cost to distribute the jerseys increases. b. The Packers make it to the Super Bowl. c. The price of the jerseys increases by $15. d. The cost of the fabric used to make the jerseys decreases.

d