Econ Test 2
If in the market for peaches the supply curve has shifted to the left,
The supply of peaches has decreased
The Baby Steps can best be described as
All of the above
Refer to Figure 3-5. At a price of $5, the quantity sold
Is 2 units
Which is not a key to saving money
your income
A sinking fund approach means:
Saving and paying cash
Excess demand causes a shortage
True
Rent control is an example of
price ceiling
How much money should a couple who makes $54,000 a year have in their beginner emergency fund if they have a credit card bill of $3,000 and a mortgage
$1,000
Using the sinking fund approach, how much do you have to save each month to buy a $5,000 car one year from now?
$416.66 a month into savings
How much money should you have in your beginner emergency fund by the time you hit Baby Step 2
$500 or $1,000 depending on your current income
A movement along the demand curve for toothpaste would be caused by
A change in the price of toothpaste
If, in response to an increase in the price of chocolate the quantity of chocolate demanded decreases, economists would describe this as
A decrease in quantity demanded
Which of the following will shift the demand curve for a good
A decrease in the price of a complementary good
Holding everything else constant, an increase in the price of MP3 players will result in
A decrease in the quantity of MP3 players demanded
If an increase in income leads to an increase in the demand for peanut butter, then peanut butter is
A normal good
Refer to Figure 3-5. In a free market such as that depicted above, a surplus is eliminated by
A price decrease, decreasing the quantity supplied and increasing the quantity demanded
Refer to Figure 3-4. If the curren market price is $10, the market will achieve equilibrium by
A price increase, increasing the quantity supplied, and decreasing the quantity demanded
In the economic sense, almost everything is scarce. ________ of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price.
A shortage
A decrease in the price of GPS systems will result in
A smaller quantity of GPS systems supplied
Refer to Figure 3-1. A decrease in the price of the product would be represented by a movement from
A to B
If an increase in income leads to a decrease in the demand for popcorn, then popcorn is
An inferior good
The saving habits of Ben and Arthur best illustrate which principle of saving?
All of the above
To build discipline and get into the habit of saving, you should
All of the above
Which is not a factor that shifts the demand cuve
Altered price for inputs
What is the difference between an "increase in demand" and an "increase in quantity demanded"
An increase in demand is represented by a rightward shift of the demand curve while an increase in quantity demanded is represented by a movement along a given demand curve
The law of supply states that, holding everything else constant, that
An increase in price causes an increase in quantity supplied
What is the difference between an increase in supply and an increase in quantity supplied
An increase in supply means the supply curve has shifted to the right while an increase in quantity supplied refers to a movement along a given supply curve in response to an increase in price
The law of demand implies, holding everything else constant, that
As the price of bagels increases, the quantity of bagels demanded will decrease
Which of the following is the correct way to describe equilibrium in a market
At equilibrium, quantity demanded equals quantity supplied
Refer to Figure 3-2. A decrease in the price of the product would be represented by a movement from
B to A
Which is not a factor that shifts the demand curve
Change in price
Elvira decreased her consumption of bananas when the price of peanut butter increased. For Elvira, peanut butter and bananas are
Complements in consumption
Refer to Figure 3-1. An increase in population would be represented by a movement from
D1 to D2
Refer to Figure 3-1. A decrease in taste or preference would be represented by a movement from
D2 to D1
Refer to Figure 3-1. If the product represented is an inferior good, an increase in income would be represented by a movement from
D2 to D1
A normal good is a good for which the demanded increases as income decreases, holding all else constant
False
The minimum wage is an exmaple of a price ceiling
False
The ____ effect refers to the change in quantity demanded for a good that results from the effect of a change in the good's price on consumer's purchasing power
Income
A successful marketing campaign will increase the demand for Red Bull. This will ____ the equilibrium price and ___ the equilibrium quantity of Red Bull.
Increase, increase
Which of the followin is not one of the three reasons to save
Pay off debt
If the demand curve for a good shifts letfward
Quantity demanded is less at each price
Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia. What will be the likely effect on the market for sparkling wine in Vinyardia?
Quantity demanded will decrease, quantity supplied will increase, and surplus will result
Suppose that when the price of raspberries increases, Lonnie increases his purchases of payayas. To Lonnie,
Raspberries and payayas are substitutes
Refer to Figure 3-2. An increase in the number of firms in the market would be represented by a movement from
S1 to S2
Refer to Figure 3-2. An increase in the price of inputs would be represented by a movement from
S2 to S1
Refer to Figure 3-2. An increase in the price of substitutes in production would be represented by a movement from
S2 to S1
Which is the correct order of priorities for your money
Save for emergencies, invest in retirement, pay off the house
In January, buyers of gold expect that the price of gold will rise in February. What happens in the gold market in January, holding all else constant
The demand curve shifts to the right
If a firm expects that the price will be higher in the future than it is today
The firm has an incentive to decrease supply now and increase supply in the future
A change in all of the following variables will change the market demand for a product except
The price of a product
At a product's equilibrium price,
The product's demand curve crosses the product's supply curve
Which of the following is true about the relationship between price and quantity supplied
There is usually a direct relationship
A change in supply is represented by a shift of the supply curve
True
An increase in the quantity of a product supplied is caused by an increase in the price of the product
True
Chips and salsa are complements. If the price of salsa decreases, the demand for chips will increase.
True
What is the most sensible way to buy a $4,000 car
Use the sinking fund approach and save $400 a month for ten months
Which statement is true
When you pay with cash, you have a higher chance of negotiating a better deal
Which of the following is true about the concept of saving
You must pay yourself first
Savings is about
contentment and emotion
If a demand curve shifts to the right, then
demand has increased
To affect the market outcome, a price ceiling
must be set below the equilibrium price
What does ceteris paribus mean?
other things being equal
By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis, economists assume that the most important determinant of the demand for a good is the ________ of the good.
price; quantity; price
Refer to Figure 3-4. If the price is $10
there would be a shortage of 600 units.
Refer to Figure 3-5. At a price of $15
there would be a surplus of 4 units.