Microeconomics Chapter 3
Refer to the diagram. The equilibrium price and quantity in this market will be:
$1.00 and $2.00
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 suggests that ramen noodles and boxed macaroni and cheese are:
inferior goods
The relationship between quantity demanded and price is
inverse
A market:
is an institution that brings together buyers and sellers
Refer to the diagram. A decrease in quantity demanded is depicted by a:
move from point y to point x
Refer to the diagram. An increase in quantity supplied is depicted by a:
move from point y to point x
Which of the following is most likely to be an inferior good?
Used clothing
In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by:
a change in buyer tastes
If two goods are complements:
a decrease in the price of one will increase the demand for the other.
A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana. We can conclude that:
beer and marijuana are complementary goods
Which of the diagrams illustrate(s) the effect of a decrease in incomes on the market for secondhand clothing?
A only
Which of the diagrams illustrates the effect of a governmental subsidy on the market for AIDS research?
C only
Which of the diagrams illustrates the effect of an increase in automobile worker wages on the market for automobiles?
D only
Blu-ray players and blu-ray discs are
complementary goods
If the demand for steak (a normal good) shifts to the left, the most likely reason is that:
consumer incomes have fallen
If X is a normal good, a rise in money income will shift the:
demand curve for X to the right
Refer to the diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market:
demand has increased and equilibrium price has decreased.
The relationship between quantity supplied and price is
direct
With a down-sloping demand curve and an up-sloping supply curve for a product, an increase in consumer income will:
increase equilibrium price and quantity if the product is a normal good.
A government subsidy to the producers of a product
increases product supply.
A demand curve
indicates the quantity demanded at each price in a series of prices
The law of demand states that, other things equal:
price and quantity demanded are inversely related
Refer to the diagram. A decrease in demand is depicted by a:
shift from D2 to D1
Refer to the diagram. A decrease in supply is depicted by a:
shift from S2 to S1
An improvement in production technology will:
shift the supply curve to the right
Refer to the diagram. A price of $20 in this market will result in a
shortage of 100 units
