quiz 3

Assume that the graphs show a competitive market for the product stated in the question. Picture Picture Select the graph above that best shows the change in the market specified in the following situation: In the market for chicken, when the price of a substitute, such as beef, decreases.

Graph B

Suppose that a more efficient way to produce a good is discovered, thus lowering production costs for the good. This will cause a(n):

Increase in supply

If farmers withhold some of their current corn harvest from the market because they anticipate a higher price of corn in the near future, then this would cause a(n):

Leftward shift in the current supply of corn

An "increase in the quantity supplied" suggests a:

Movement up along the supply curve

Refer to the above graph. A decrease in supply would best be reflected by a change from:

Point 2 to point 1

Refer to the diagram above, which shows three supply curves for corn. A movement from point a to point b is caused by a change in the:

Price of corn in the market

The market demand schedule or curve for a product shows the relationship between how much of the product buyers are willing and able to buy and the:

Product's price

The horizontal axis of a graph that shows a market demand curve indicates the:

Quantities which consumers will be willing and able to buy at various prices

There is a shortage in a market for a product when:

Quantity demanded is greater than quantity supplied

If the price of a product decreases, we would expect:

Quantity supplied to decrease

For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as:

normal goods

Refer to the above graph for the event-ticket market. A scalpers' market will exist if the event organizers set the official ticket price at:

$20

In a competitive market illustrated by the diagram above, a price ceiling of $10 per unit will result in:

A shortage of 200 units

If the market price is above the equilibrium price:

A surplus will occur and producers will produce less and lower prices

When economists describe "a market," they mean:

A system that allows buyers and sellers to interact with one another

Which statement best illustrates the concept of diminishing marginal utility?

A typical consumer will receive less satisfaction from consuming the fourth hamburger than from the third hamburger in a week

In a competitive market illustrated by the diagram above, for a price floor to be effective and alter the market situation, it must be set:

Above $15

The graph above represents a competitive market for a product where the government now has introduced a price floor of 0C. Which area in the graph represents the producers' sales revenue after the imposition of the price floor?

0CEJ

The graph above represents a competitive market for a product where the government has set a price ceiling of 0A. What quantity will buyers be able to buy after the imposition of the price ceiling?

0J

Consider the supply and demand curves depicted in the diagram above. If the government imposed a price ceiling of $15, then sellers will be willing to sell ___, and a black market could develop where the price would be:

24 units; above $15

Which of the following factors will decrease the current demand for a product?

A decrease in the current price of a substitute product

A market for a product reaches equilibrium when:

Buyers intend to buy a quantity equal to the quantity that sellers intend to sell

If there was initially a shortage in the market for a product, then:

Buyers will drive the price up

In competitive markets, a surplus or shortage will:

Cause changes in the quantities demanded and supplied that tend to eliminate the surplus or shortage

If the price of Pepsi decreases, other factors constant, then we'd expect to see a consequent shift of the demand curve for:

Coke to the left

When economists say that the demand for a product has decreased, they mean that:

Consumers are now willing and able to buy less of this product at each possible price

A decrease in demand and an increase in supply will:

Decrease price and affect the equilibrium quantity in an indeterminate way

The following are explanations of the Law of Demand, except:

Expectations effect

An increase in demand for oil along with a simultaneous increase in supply of oil will:

Increase quantity, but whether it increases price depends on how much each curve shifts

A fall in the price of milk, used in the production of ice cream, will:

Increase the supply of ice cream

In a market with supply and demand curves as shown above, a price ceiling of $2.50 will result in:

No shortage or surplus

Attaining "allocative efficiency" means that:

Resources are being devoted to the production of products most desired by society

A government will create a surplus in a market when it:

Sets a price floor above the equilibrium price

An increase in the price of product B leads to an increase in the demand for product C. This indicates that products B and C are:

Substitute goods

Refer to the above diagram of the market for corn. If the price in this market is at $4 per bushel, then there will be a:

Surplus and the price will tend to fall

A black market could arise as a result of:

The imposition of a legal price ceiling below the equilibrium price

A result of a fall in the price of gasoline, consumers can afford to buy more gasoline for more driving trips. This is an illustration of:

The income effect

In a competitive market illustrated by the diagram above, a price ceiling of $25 per unit will result in:

The market stays at equilibrium price of $15

The graph below shows the market for tickets to a "Final Four" sports event. Assume that there is only one kind of ticket to the event. Picture Refer to the above graph. The supply curve in this event-ticket market is vertical because:

The organizers are selling a fixed number of tickets

If a price ceiling is set below the equilibrium price in a market:

The quantity demanded will exceed the quantity supplied

As a result of a decrease in the price of online streaming movies, consumers download more movies online and buy fewer DVDs. This is an illustration of:

The substitution effect

When economists speak of "demand" in a particular market, they refer to:

The whole demand curve or schedule

In order to derive the market supply curve from individual supply curves, we add up the:

Various quantities that individual sellers want to sell at specific price levels

What combination of changes would most likely decrease the equilibrium price?

When supply increases and demand decreases

Select the graph above that best shows the change in the market specified in the following situation: In the market for digital cameras, when the productivity of workers in the digital camera industry increases.

graph C