Microeconomics ch. 3 Quiz

Which of the following will cause the quantity demanded for product K to change? A change in the price of close-substitute product J An increase in consumer incomes A change in consumer tastes A change in in the price of K

A change in in the price of K

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

A change in the price of K

Which of the following will cause the demand curve for product A to shift to the left? Population growth that causes an expansion in the number of persons consuming A An increase in money income if A is a normal good A decrease in the price of complementary product C An increase in money income if A is an inferior good

An increase in money income if A is an inferior good

College students living off-campus frequently consume large amounts of boxed macaroni and cheese. When they finish school and start their careers, their consumption of this good frequently declines. This suggests that boxed macaroni and cheese is a(n) Normal good Substitute good Inferior good Complementary good

Inferior good

Which of the following is most likely to be an inferior good? Steak Ocean cruises Luxury automobiles Used clothing

Used clothing

If two goods are complements they are consumed independently. they are necessarily inferior goods. an increase in the price of one will increase the demand for the other. a decrease in the price of one will increase the demand for the other.

a decrease in the price of one will increase the demand for the other.

DVD players and DVDs are substitute goods. complementary goods. independent goods. inferior goods.

complementary goods.

An increase in the price of a product will reduce the amount of it purchased because supply curves are upsloping. the higher price means that real incomes have risen. consumers will substitute other products for the one whose price has risen. consumers substitute relatively high-priced for relatively low-priced products.

consumers will substitute other products for the one whose price has risen.

A market is in equilibrium provided there is no surplus of the product. at all prices above that shown by the intersection of the supply and demand curves. if the amount producers want to sell is equal to the amount consumers want to buy. whenever the demand curve is downsloping and the supply curve is upsloping.

if the amount producers want to sell is equal to the amount consumers want to buy.

A government subsidy to the producers of solar panels reduces product supply. increases product supply. reduces product demand. increases product demand.

increases product supply.

The demand curve shows the relationship between price and production costs. price and quantity demanded. money income and quantity demanded. consumer tastes and the quantity demanded.

price and quantity demanded.

The law of supply indicates that the product supply curve is downsloping. producers will offer more of a product at high prices than they will at low prices consumers will purchase less of a good at high prices than they will at low prices. producers will offer more of a product at low prices than they will at high prices.

producers will offer more of a product at high prices than they will at low prices

The elimination of a government subsidy to the producers of solar panels reduces product supply. increases product supply. reduces product demand. increases product demand.

reduces product supply.

The law of supply is reflected in a downsloping supply curve. reflects the income and substitution effects of a price change. reflects the amounts that producers want to offer at each price in a series of prices. shows that the relationship between producer revenue and quantity supplied is negative.

reflects the amounts that producers want to offer at each price in a series of prices

In 2007 the price of oil increased, which in turn caused the price of natural gas to rise. This can best be explained by saying that oil and natural gas are complementary goods and the higher price for oil increased the demand for natural gas. complementary goods and the higher price for oil decreased the supply of natural gas. substitute goods and the higher price for oil increased the demand for natural gas. substitute goods and the higher price for oil decreased the supply of natural gas.

substitute goods and the higher price for oil increased the demand for natural gas.

A decrease in the excise tax on cigarettes raises the price of cigarettes by shifting the demand curve for cigarettes rightward. demand curve for cigarettes leftward. supply curve for cigarettes rightward. supply curve for cigarettes leftward.

supply curve for cigarettes rightward.

In presenting the model of a demand curve, economists presume the most important variable in determining the quantity demanded is the price of the product itself. the prices of related goods. consumer income. consumer tastes.

the price of the product itself.

At the point where the demand and supply curves for a product intersect the market may, or may not, be in equilibrium. the selling price and the buying price need not be equal. either a shortage or a surplus of the product might exist, depending on the degree of competition. the quantity that consumers want to purchase and the amount producers choose to sell are the same.

the quantity that consumers want to purchase and the amount producers choose to sell are the same.