Macro Quiz 2 (ch. 3-4)
Which of the following best represents the effects of a decrease in the price of tomato juice, other things being equal?
A downward movement along the demand curve for tomato juice.
A new hormone will increase the amount of milk each cow produces. If this hormone is adopted by many dairies, what will be the effect on the milk market?
An increase in supply, lower equilibrium price, and higher equilibrium quantity.
Which of the following is the best description of the effects of an increase in the supply of bread?
Bread prices will fall, and bread sales will rise.
How would a decrease in consumer income affect the market for new furniture?
Demand would decrease, leading to a reduction in price and a reduction in quantity sold.
In the orange market, what impact would an increase in the price of oil that orange growers burn to keep oranges from freezing in the winter have on the market?
It would shift the supply curve to the left.
Between 1994 and 2004, the monthly charge for cellular phone service decreased from $120 per month to $30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?
Technological improvements that reduced the cost of supplying cellular phone service
When economists say the quantity supplied of a product has increased, they mean...
The price of the product has risen, and consequently, suppliers are producing more of it.
Which of the following is least likely to increase the demand for new tires?
a decrease in the price of tires
Assume the demand curve for cookies is downward sloping. If the price of cookies falls from $1.50 to $1.25 per dozen,
a larger quantity of cookies will be demanded.
If consumer incomes go up and you are analyzing the market for Harley Davidson motorcycles, the effect on the demand for motorcycles, ceteris paribus, will be...
a rightward shift in the demand curve for motorcycles.
The imposition of price ceilings on a market often results in
an increase in expenditures in the black-market.
Which of the following would tend to increase the price of lumber?
an increase in the demand for newly constructed homes
When government imposes price controls in a market,
non-price factors become more important in the rationing of the good.
When there is excess supply of a product in a market,
price must be above the equilibrium price.
Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,
the quantity demanded of physicals increases and the quantity supplied of physicals decreases.