EC 201 Chapter 3 Quiz
If the university president valued a parking space close to the administration building at $500 and paid $30 for a parking permit, he would receive consumer surplus equal to:
470
Base of Triangle: 4000 Height of Triangle: 30 Refer to the figure above. The market price of the product is $20 per unit. Calculate the dollar amount of consumer surplus being earned in this market.
60,000
Do shifts up and to the right in figure (Figure: Demand Shift) Which of the following factors could have caused the change in the above figure? I. a decrease in the price of a complement good II. a decrease in the price of the product III. a decrease in the price of a substitute good IV. an increase in taxes Select one: A. I only B. I, II, and III C. I and IV D. II only
I only
Figure: Supply Shifts S2- up and to left of S1 S3- down and to the right of S1 In the figure above, the initial supply curve is S1. If producers form expectations that the price will be lower in the near future, S1 will:
Shift to S3
Corky-Coly and Prippsy are substitute soft drinks. Which of the following would cause the demand curve for Prippsy to shift to the right?
The correct answer is: A report emerges that shows that drinking Prippsy helps to promote weight loss.
Because of new production technology, the manufacturers of plasma television screens have reduced the number of defective screens that are scrapped in production. What effect will this have in the market for plasma televisions?
The supply curve will increase.
A change in price is reflected in a movement along the same demand curve while a change in demand refers to a shift of the entire demand curve.
True
If the price of ski lift tickets increases, the quantity demanded for ski lift tickets will decrease.
True
If the price to play golf decreases, the demand for golf balls will increase.
True
A subsidy is a:
a reverse tax
D1 shifts up and to the right (Figure: Oil Market) Which of the following events could have caused the change in the above figure? A. the expectation of an outbreak of war in the world's best oil producing regions B. the expectation of a reduction in the future supply of oil C. the expectation that next week's oil prices will be substantially higher D. All of the answers are correct.
all of the answers are correct
Which of the following would cause an increase in the demand for gasoline?
an approaching hurricane, which threatens a major oil refinery in Texas
Michael graduates and his income increases by $40,000 a year. Other things remaining the same, he decreases the quantity of pizza he buys. For Michael, pizza is:
an inferior good
The movie trilogy The Lord of the Rings was hugely successful, and, as a result, the demand for fantasy novels, action figures, and online role-playing games surged. The increase in demand can be explained by a(n):
change in tastes
Which of the following does not shift the demand curve?
changes in the price of the product itself
A decrease in income causes the demand to ________ for a normal good, and an increase in income causes the demand to ________ for an inferior good.
decrease, decrease
If the price of shotguns ______, the demand for shotgun shells will _______.
increase, decrease
Quantity demanded is:
the amount of a good or service that a buyer is able and willing to purchase at a given price.
In the early 1980s the cost of renting movies averaged $5 a night; by the early 1990s the cost to rent had fallen to about $1 a night on average; this happened because the supply of rental stores expanded dramatically. This is an example of a supply curve shifter based on:
the entry of new producers in the market.
The law of demand states that:
the lower the price, the greater the quantity demanded.