Quiz 1

Refer to Graph 4-5. According to the graph, at a price of $7: A. a surplus would exist and the price would tend to fall B. a surplus would exist and the price would tend to rise C. a shortage would exist and the price would tend to fall D. the market would be in equilibrium

A. a surplus would exist and the price would tend to fall

A demand curve A. is always downward sloping B. can slope upwards or downwards depending on the good C. shows that demand changes when the number of sellers in a market increases D. illustrates a positive relationship between price and quantity demanded

A. is always downward sloping

A leftward shift of a product supply curve might be caused by: A. some firms leaving an industry B. a decline in the prices of needed inputs C. an increase in consumer incomes D. an improvement in the relevant technique of production

A. some firms leaving an industry

'Because of unseasonably cold weather, the supply of oranges has substantially decreased'. This statement indicates that: A. the amount of oranges that will be available at various prices has declined B. consumers will be willing and able to buy fewer oranges at each possible price C. the price of oranges will fall D. the equilibrium quantity of oranges will rise

A. the amount of oranges that will be available at various prices has declined

A demand schedule is a table showing the relationship between: A. the price of a good and the quantity buyers are willing and able to purchase B. income and the quantity of the good demanded C. the price of a good and the quantity supplied D. the determinants of demand and the quantity demanded

A. the price of a good and the quantity buyers are willing and able to purchase

Suppose that the incomes of buyers in a particular market for a normal good decline and there is also a reduction in input prices. What would we expect to occur in this market? A. equilibrium quantity would increase but the impact on equilibrium price would be ambiguous B. the equilibrium price would decrease but the impact on the amount sold in the market would be ambiguous C. both equilibrium price and equilibrium quantity would increase D. the equilibrium price would increase but the impact on the amount sold in the market would be ambiguous

B. the equilibrium price would decrease but the impact on the amount sold in the market would be ambiguous

Suppose a drought reduces the production of brussels sprouts in Australia, but simultaneously a new study finds that they have cancer-curing properties. One would expect: A. the price of brussels sprouts to decrease B. the price of brussels sprouts to increase C. the price of brussels sprouts to remain the same D. the price of brussels sprouts to drop slightly, then increase

B. the price of brussels sprouts to increase

A market demand is: A. impossible to tell, more information is needed B. the supply curve will shift to the right C. price will increase as the industry becomes more lucurative D. the supply curve will shift to the left

B. the supply curve will shift to the right

Boris discovers a new technology that can produce economics textbooks at triple the speed that textbooks are usually produced. What effect can Boris expect this discovery to have on the supply of economics textbooks? A. impossible to tell, more information is needed B. the supply curve will shift to the right C. price will increase as the industry becomes more lucurative D. the supply curve will shift to the left

B. the supply curve will shift to the right

Demand for fish is higher in India than Australia because: A. fish is an inferior good and people in India have less income B. there are more buyers in the Indian market C. people expect fish to be cheaper in India D. the cost of supplying fish in India is lower than Australia

B. there are more buyers in the Indian market

A shortage is: A. a situation in which quantity supplied is greater than quantity demanded B. a situation in which there is too much produced of a good C. a situation in which quantity supplied is lower than quantity demanded D. a situation in which there is downward pressure on price

C. a situation in which quantity supplied is lower than quantity demanded

Suppose that scientists find evidence that proves that chocolate pudding increases hair growth in men who are balding. We would expect to see: A. a decrease in the supply of chocolate pudding B. a decrease in the demand for chocolate pudding C. no change in the demand for chocolate pudding D. an increase in the demand for chocolate pudding

D. an increase in the demand for chocolate pudding

Suppose that demand decreases AND supply decreases. What would you expect to occur in the market for the good? A. equilibrium price would decrease but the impact on equilibrium quantity would be ambiguous B. both equilibrium price and equilibrium quantity would increase C. equilibrium price would increase but the impact on equilibrium quantity would be ambiguous D. equilibrium quantity would decrease but the impact on equilibrium price would be ambiguous

D. equilibrium quantity would decrease but the impact on equilibrium price would be ambiguous

Suppose an outbreak of Varroa kills off many beehives. Which of the following would not occur as a direct result of this event? A. the supply of honey would decrease B. the equilibrium price of honey would increase C. honey sellers would not be willing to produce and sell as much honey at previous market prices D. honey buyers would not be willing to buy as much at previous market prices

D. honey buyers would not be willing to buy as much at previous market prices

New Zealand sphagnum moss is an input used in the production of orchids. If the price of sphagnum moss increases, but nothing else changes, this will cause: A. the supply of orchids to increase B. the demand for orchids to decrease C. the demand for orchids to increase D. the supply of orchids to decrease

D. the supply of orchids to decrease