chapter 3 macro john hill delgado

C

Suppose that tacos and pizza are substitutes, and that soda and pizza are complements. We would except an increase in the price of pizza to: A) Increase the demand for both sods and tacos B) Reduce the demand for soda and increase the demand for tacos C) Reduce the demand for soda and increase the demand for the tacos D) Reduce the demand for tacos and increase the demand for soda

False

Surpluses drive market prices up, shortages drive them down. T/F

C

The following are explanations of the Law of Demand, except: A) Income effect B) Substitution effect C) Expectations effect D) Diminishing marginal utility

A

The market demand schedule or curve for a product shows the relationship between how much of the product buyers are willing and to buy and the: A) Product's price B) Cost of producing the product C) Available supply of the product D) Buyers' income

D

(Advanced analysis) The demand for commodity X is represented by the equation P= 100-2Q and supply by the equation P= 10+ 4Q. The equilibrium quantity is: A) 30 B) 10 C) 20 D) 15

A

A and B are substitute goods, but A and C are complementary goods. If the cost of producing A decreases, then the demand for: A) B will decrease and the demand for C will increase. B) Both B and C will decreases C) B will increase and the demand for C will decrease D) Both B and C will increase

B

A government set price floor on a product: A) Is intended to benefit the buyers of the product B) Will attract more resources toward the production of the product C) Will drive resources away from the production of the product D) Does not interfere with the rationing function of price in a marker system

D

A shift to the right in the demand curve for product A can be most reasonably explained by saying that: A) Consumer incomes have declined, and consumers now want to buy less of A at each possible price. B) The price of A has declined and, as a result, consumers want to purchase more of it C) The price of A has increase and, as a result, consumers want to purchase less of it. D) Consumer preferences have changed in favor of A so that they now want to buy more at each possible price

B

Allocative efficiency involves determining: A) Which output mix will result in the most rapid rate of economic growth. B) The mix of output that will maximize society's satisfaction. C) Which production possibilities curve reflects the lowest opportunity costs. D) The optimal rate of technological progress

True

An increase in consumer incomes will cause a decrease in the demand for an inferior good. T/F

C

If the demand curve for product B shifts to the right as the price of product A declines, then: A) A is a superior good and B is an inferior good B) Both A and B are inferior goods C) A and B are complementary goods D) A is an inferior good and B is a superior good

A

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of X, (2) the equilibrium price (P) of X, and (3) the equilibrium quantity (Q) of X. If X is a normal good, an increase in income will: A) Increase D, increase P, and increase Q B) Increase S, increase P, and increase Q C) Decrease D, increase P, and increase Q D) Increase D, increase P, and decrease Q

D

Which of the following statements is correct? (Assume demand is interacting with an upward sloping supply curve.): A) If price increases, then demand will decrease B) If demand increases, then price will decrease C) If price decreases, then demand will decrease D) If demand decreases, then price will decrease

C

Which of the following statements is true about productive and allocative efficiency? A) Society can achieve either productive efficiency or allocative efficiency, but not both simultaneously. B) Productive efficiency and allocative can only occur together; neither can occur without the other. C) Realizing allocative efficiency implies that productive efficiency has been realized. D) Productive efficiency can only occur if there is also allocative efficiency.

D

Which of the following will not cause the demand for product K to change? A) A change in consumer tastes for product K B) A change in the price of close-substitute product J C)An increase in incomes of buyers of product K D) A change in the price of product K

A

With a down sloping demand curve and an up sloping supply curve for a product, placing an excise tax on this product will: A) Increase equilibrium price and decrease equilibrium quantity. B) Decrease equilibrium price and increase equilibrium quantity. C) Decrease equilibrium price and quantity. D) Increase equilibrium price and quantity.

B

https://ezto.mheducation.com/extMedia/bne/McConnell%2021e/ch03q352.png Refer to the four graphs above. Select the graph that best shows the changes in demand and supply in the market specified in the following situation: the market for music CDs sold in stores if more consumer switch to music downloads from the Internet and cost of making music CDs decreases because of technological improvement in production. A) Graph A B) Graph C C) Graph B D) Graph D

B

https://ezto.mheducation.com/extMedia/bne/McConnell%2021e/image017ch03b.png Refer to the figure above, which shows three supply curves for corn. Which of the following would cause the supply of corn to shift from S1 to S2? A) An increase in the price fertilizer B) The development of a more effective insecticide against corn rootworm C) A decrease in consumer incomes, assuming corn is a normal good. D) A change in consumer tastes away from cornbread

B

https://ezto.mheducation.com/extMedia/bne/McConnell%2021e/image019ch03b.png A) Point 4 to point 5 B) Point 3 to point 4 C) Point 1 to point 6 D) Point 5 to point 1