chapter 3 study guide MC

An advance in technology results in: a. suppliers offering a larger quantity than before at each given price. b. suppliers offering the same quantity as before at a lower price. c. a rightward shift of the supply curve. d. an increase in supply. e. All of the answers above are correct.

e

Assume Congress passes a new tax of $2.00 per pack on cigarettes. The effect on the supply curve is a (an): a. decrease in supply. b. increase in supply. c. decrease in quantity supplied. d. increase in quantity supplied.

a

Other things being equal, the effects of an increase in the price of computers would best be represented by which of the following? a. A movement up along the demand curve for computers. b. A movement down along the demand curve for computers. c. A leftward shift in the demand curve for computers. d. A rightward shift in the demand curve for computers.

a

Assume that Coca-Cola and Pepsi-Cola are substitutes. A rise in the price of Coca-Cola will have which of the following effects on the market for Pepsi? a. A movement down along the Pepsi demand curve. b. A rightward shift in the Pepsi demand curve. c. A movement up along the Pepsi demand curve. d. A leftward shift in the Pepsi demand curve.

b

Assume that crackers and soup are complementary goods. The effect on the soup market of an increase in the price of crackers (other things being equal) would best be described as a (an): a. decrease in the quantity of soup demanded. b. decrease in the demand for soup. c. increase in the quantity of soup demanded. d. increase in the demand for soup.

b

Which of the following best represents the effects of a decrease in the price of tomato juice, other things being equal? a. An upward movement along the demand curve for tomato juice. b. A downward movement along the demand curve for tomato juice. c. A rightward shift in the demand curve for tomato juice. d. A leftward shift in the demand curve for tomato juice.

b

Yesterday Seller A supplied 400 units of a good X at $10 per unit. Today Seller A supplies the same quantity of units at $5 per unit. Based on this evidence, Seller A has experienced a (an): a. decrease in supply. b. increase in supply. c. increase in the quantity supplied. d. decrease in the quantity supplied. e. increase in demand.

b

Assume that both oranges and peaches can be grown on the same type of land. A decrease in the price of peaches, other things being equal, will cause a (an): a. upward movement along the supply curve for oranges. b. downward movement along the supply curve for oranges. c. rightward shift of the supply curve for oranges. d. leftward shift of the supply curve for oranges.

c

Assuming that wheat and corn can both be grown on the same type of land, a decrease in the price of corn, other factors held constant, will cause a (an): a. downward movement along the supply curve for wheat. b. upward movement along the supply curve for wheat. c. rightward shift in the supply curve for wheat. d. leftward shift in the supply curve for wheat.

c

The theory of supply states that: a. there is a negative relationship between the price of a good and the quantity of it purchased by suppliers. b. there is a positive relationship between the price of a good and the quantity that buyers choose to purchase. c. there is a positive relationship between the price of a good and the quantity of it offered for sale by suppliers. d. at a lower price, a greater quantity will be supplied.

c

Three of the four events described below might reasonably be expected to shift the demand curve for beef to a new position. One would not shift the demand curve. The single exception is a (an): a. change in people's tastes with respect to beef. b. increase in the money income of beef consumers. c. fall in the price of beef. d. widespread advertising campaign undertaken by the producers of a product competitive with beef (e.g., pork).

c

When the price of a good in a market is above equilibrium: a. the quantity supplied exceeds the quantity demanded. b. a surplus of a good. c. the price will fall in the near future. d. All of the answers above are correct.

c

Which of the following best explains the determination of the equilibrium price of a product? a. production costs b. the supply of a good c. the interaction of supply and demand d. the decisions of government

c

Which of the following is true for the law of demand? a. Sellers increase the quantity of a good available as the price of the good increases. b. An increase in price results from false needs. c. There is an inverse relationship between the price of a good and the quantity of the good demanded. d. Prices increase as more units of a product are demanded.

c

A demand curve for The Steel Porcupines concert tickets would show the: a. quality of service that customers demand when they buy a ticket. b. number of people who like to attend the concert. c. number of tickets the promoters are willing to sell at each price. d. number of concert tickets that will be purchased at each price.

d

Assume that a computer is a normal good. An increase in consumer income, other things being equal, would: a. cause an upward movement along the demand curve for computers. b. cause a downward movement along the demand curve for computers. c. shift the demand curve for computers to the left. d. shift the demand curve for computers to the right.

d

Assume that brand X is an inferior good and name brand Y is a normal good. An increase in consumer income, other things being equal, will cause a (an): a. upward movement along the demand curve for name brand Y. b. downward movement along the demand curve for brand X. c. rightward shift in the demand curve for brand X. d. leftward shift in the demand curve for brand X.

d

Market equilibrium is defined as: a. the condition in which there is neither a shortage or surplus. b. the condition under which the separately formulated plans of buyers and sellers exactly mesh when tested in the market. c. represented graphically by the intersection of the supply and demand curves. d. All of the answers above are correct.

d

The "ceteris paribus" clause in the law of demand does not allow which of the following factors to change? a. Consumer tastes and preferences. b. The prices of other goods. c. Expectations. d. All of the answers above are correct.

d

Which of the following will increase the demand for large automobiles? a. A fall in the price of small automobiles b. A rise in insurance rates for large automobiles c. A fall in the price of large automobiles d. An increase in buyers' incomes (assuming large automobiles to be a normal good)

d

Which of the following will not cause a movement along the supply curve? a. Changes in the sellers' expectations. b. Increases in taxes per unit of output. c. Advances in technology. d. All of the answers above are correct.

d

There is news that the price of Tucker's Root Beer will increase significantly next week. If the demand for Tucker's Root Beer reacts only to this factor and shifts to the right, the position of this demand curve has reacted to a change in: a. tastes. b. income levels. c. the price of other goods. d. the number of buyers. e. expectations.

e