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| 1 | |
When an economist says that the demand for a product has decreased, this means that: |
| | A) | consumers desire to purchase less of this product at each possible price |
| | B) | less of the product will be available for purchase at each possible price |
| | C) | the price has risen so that consumers are buying a smaller amount of the product |
| | D) | the demand curve has shifted to the right |
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| 2 | |
An increase in consumer incomes will: |
| | A) | increase the demand for both normal and inferior goods |
| | B) | increase the demand for a normal good but decrease the demand for an inferior good |
| | C) | increase the demand for an inferior good but decrease the demand for a normal good |
| | D) | decrease the demand for both normal and inferior goods |
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| 3 | |
When drawing demand and supply curves, economists are assuming that the primary influence on production and purchasing decisions is: |
| | A) | price |
| | B) | cost of production |
| | C) | the overall state of the economy |
| | D) | consumer incomes |
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| 4 | |
Refer to the following diagrams:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073273082/384256/quiz3b_4.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (29.0K)</a>]]>
Which of the above diagrams illustrates the effect of an increase in crude oil prices on the market for gasoline? |
| | A) | A only |
| | B) | B only |
| | C) | C only |
| | D) | D only |
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| 5 | |
Which of the following will cause the demand curve for product A to shift to the right? |
| | A) | population growth that causes an expansion in the number of consumers |
| | B) | an increase in money income if A is an inferior good |
| | C) | an increase in the price of complementary product B |
| | D) | a decrease in money income if A is a normal good |
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| 6 | |
Suppose that the demand and supply for some product both increase. Further suppose that at the current price, the supply increase exceeds the demand increase. Then, in that market: |
| | A) | both equilibrium price and equilibrium quantity will increase |
| | B) | equilibrium price will decrease and equilibrium quantity will increase |
| | C) | equilibrium price will increase and equilibrium quantity will decrease |
| | D) | both equilibrium price and equilibrium quantity will decrease |
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| 7 | |
Refer to the following diagram:
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S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market: |
| | A) | the equilibrium position has shifted from J to M |
| | B) | the equilibrium position has shifted from K to M |
| | C) | the equilibrium position has shifted from J to L |
| | D) | the new equilibrium price and quantity are both lower than originally |
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| 8 | |
A decrease in the price of a product will increase the amount of it purchased because: |
| | A) | supply curves are upsloping |
| | B) | the lower price will decrease real incomes |
| | C) | the lower price induces consumers to use this product instead of similar products |
| | D) | firms produce more at lower prices |
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| 9 | |
The term "demand:" |
| | A) | refers to the entire series of prices and quantities that comprise the demand schedule |
| | B) | refers to the joint relationship between price, quantity demanded, income, and preferences, holding all other factors constant |
| | C) | refers to the amount of a product that will be purchased at the current price |
| | D) | means the same thing as quantity demanded |
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| 10 | |
Because of unusually warm weather, the supply of strawberries has substantially increased. This statement indicates that: |
| | A) | the demand for strawberries will necessarily rise |
| | B) | the equilibrium quantity of strawberries will fall |
| | C) | the amount of strawberries that will be available at various prices has increased |
| | D) | the price of strawberries will rise |
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