Microeconomics chapter 2 quiz

What would happen to the equilibrium price and quantity of lattés if consumers' incomes rise and lattés are a normal good? a. Both the equilibrium price and quantity would increase. b. The equilibrium price would decrease, and the equilibrium quantity would increase. c. Both the equilibrium price and quantity would decrease. d. The equilibrium price would increase, and the equilibrium quantity would decrease.

a. Both the equilibrium price and quantity would increase.

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price. a. True b. False

a. True

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied. a. True b. False

b. False

Which of the following is not a determinant of the demand for a particular good? a. The prices of related goods b. The prices of the inputs used to produce the good c. Income d. Tastes

b. The prices of the inputs used to produce the good

Which of the following would not increase in response to a decrease in the price of ironing boards? a. The quantity of irons demanded at each possible price of irons b. The quantity of irons supplied at each possible price of irons c. The equilibrium quantity of irons d. The equilibrium price of irons

b. The quantity of irons supplied at each possible price of irons

A competitive market is a market in which a. an auctioneer helps set prices and arrange sales. b. no individual buyer or seller has any significant impact on the market price. c. there are only a few sellers. d. the forces of supply and demand do not apply.

b. no individual buyer or seller has any significant impact on the market price.

Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are a. complementary goods. b. substitute goods. c. normal goods. d. inferior goods.

b. substitute goods.

Which of the following is not an example of a market? a. A small town has only one seller of electricity. b. The availability of Internet shopping has expanded the clothing choices for buyers who do not live near large cities. c. In the United States, a sick person cannot legally purchase a kidney. d. In Florida, there are many buyers and sellers of key lime pie.

c. In the United States, a sick person cannot legally purchase a kidney.

Suppose there are six bait and tackle shops that sell worms in a lakeside resort town in Minnesota. If we add the respective quantities that each shop would produce and sell at each of the six bait and tackle shops when the price of worms is $2 per bucket, $2.50 per bucket, and $3 per bucket, and so forth, we have found the a. market demand curve. b. surplus or shortage depending on market conditions. c. market supply curve. d. equilibrium curve.

c. market supply curve.

An example of a perfectly competitive market would be the a. cable TV market. b. shampoo market. c. soybean market. d. breakfast cereal market.

c. soybean market.

If the number of sellers in a market increases, then the a. demand in that market will increase. b. demand in that market will decrease. c. supply in that market will increase. d. supply in that market will decrease.

c. supply in that market will increase.

Assume Lianna buys coffee beans in a competitive market. It follows that a. Lianna has a limited number of sellers from which to buy coffee beans. b. Lianna might have trouble finding coffee beans at his local store. c. Lianna will negotiate with sellers whenever he buys coffee beans. d. Lianna cannot influence the price of coffee beans even if he buys a large quantity of them.

d. Lianna cannot influence the price of coffee beans even if he buys a large quantity of them.

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation? a. Consumers have experienced an increase in income, and beef-production technology has improved. b. The demand curve for beef must be positively sloped. c. The price of chicken has risen, and the price of steak sauce has fallen. d. New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy.

d. New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy.

When we move along a given demand curve, a. only price is held constant. b. all determinants of quantity demanded are held constant. c. income and price are held constant. d. all nonprice determinants of demand are held constant.

d. all nonprice determinants of demand are held constant.

Equilibrium price must decrease when demand a. increases and supply does not change, when demand does not change and supply decreases, and when demand decreases and supply increases simultaneously. b. decreases and supply does not change, when demand does not change and supply increases, and when demand increases and supply decreases simultaneously. c. increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously. d. decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously.

d. decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously.