Test: CH 03 CONCEPT CHECK QUIZ - INTRO TO ECONOMICS AT BENEDICT COLLEGE
When is demand more elastic? Demand is more elastic when there is little time to respond to a change in price. Demand is more elastic when there is ample time to respond to a change in price. Time is not a determinant of price elasticity of demand. Elasticity is the same for all time periods.
Demand is more elastic when there is ample time to respond to a change in price.
Flour is a factor of production of cupcakes. How will an increase in the price of flour affect the market for cupcakes? Overall supply will increase. Overall supply will decrease. Quantity supplied will increase. Quantity supplied will decrease.
Overall supply will decrease.
Refer to the following image. When a market is in equilibrium, which of the following is true? Quantity supplied exceeds quantity demanded. Quantity supplied is less than quantity demanded. Quantity supplied is equal to quantity demanded. There is no relationship between quantity supplied and quantity demanded.
Quantity supplied is equal to quantity demanded.
What must happen to the market price in order for a shortage to be eliminated? The price must fall. The price must rise. The price must stay the same. The price may rise or fall depending on the size of the shortage.
The price must rise.
Refer to the following figure. At a price of $5, this market is experiencing equilibrium. a shortage. a surplus.
a shortage.
Refer to the following figure. At a price of $15, this market is experiencing a(n) equilibrium. shortage. surplus.
a surplus.
Which of the following will cause a rightward shift in the supply curve for tobacco? a fall in the number of tobacco farmers in the market an increase in taxes on tobacco removal of government subsidies to tobacco farmers an improvement in the technology used in the production of tobacco
an improvement in the technology used in the production of tobacco
Suppose that Coca Cola and Pepsi are substitutes in consumption. If the price of Coca Cola decreases, then both the equilibrium price and the quantity of Pepsi demanded will decrease. both the equilibrium price and the quantity of Pepsi demanded will increase. the equilibrium price of Pepsi will increase and the quantity demanded of Pepsi will decrease. the equilibrium price of Pepsi will decrease and the quantity demanded of Pepsi will increase.
both the equilibrium price and the quantity of Pepsi demanded will decrease.
Demand for a good is elastic if the quantity demanded __________ in response to a price change. changes very little stays the same changes significantly changes either very little or substantially
changes significantly
According to the law of supply, what is the relationship between price and quantity supplied? direct no relationship inverse It depends on the change in price.
direct
Suppose pasta salad is a normal good. If the price of pasta (a major ingredient in pasta salad) increases and income also increases, the equilibrium quantity and equilibrium price of pasta salad will increase. equilibrium quantity of pasta salad will decrease and the equilibrium price of pasta salad may either increase or decrease. equilibrium quantity of pasta salad may either increase or decrease and the equilibrium price of pasta salad will increase. equilibrium quantity and equilibrium price of pasta salad will both decrease.
equilibrium quantity of pasta salad may either increase or decrease and the equilibrium price of pasta salad will increase.
According to the law of demand, what is the relationship between price and quantity demanded? direct no relationship inverse
inverse
Refer to the following graph. The demand curve slopes downward because prices and quantity demanded move in opposite directions. prices and quantity demanded move in the same direction. prices and quantity demanded have no relationship. prices and quantity demanded remain unchanged.
prices and quantity demanded move in opposite directions.
Suppose that burgers and fries are complements in consumption. If the price of fries increases, the overall demand for burgers will increase. overall demand for burgers will decrease. quantity demanded for burgers will increase. quantity demanded for burgers will decrease.
quantity demanded for burgers will decrease.
Which of the following is NOT characteristic of a market economy? significant government intervention little or no government intervention buyers and sellers motivated by self-interest prices determined by demand and supply
significant government intervention
For which of the following goods would you expect demand to be the most responsive to a rise in price? spaghetti electricity hospital emergency room visits water for a shower
spaghetti
A change in which of the following will cause a change in the quantity demanded of coffee? consumer income the price of green tea, a substitute for coffee the number of coffee consumers the price of coffee
the price of coffee
A change in which of the following will cause a change in the quantity supplied of coffee? the technology or the production process of making coffee anticipation of a change in the price of coffee the wages of coffee bean pickers the price of coffee
the price of coffee
Refer to the following graph. The supply curve is __________ because it is driven by the law of supply. downward sloping upward sloping perfectly vertical perfectly horizontal
upward sloping