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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 | |
Answer the next question on the basis of the following diagram:
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Refer to the diagram. At the equilibrium price and quantity, total consumer surplus in this market is: |
| | A) | $3 |
| | B) | $7 |
| | C) | $150 |
| | D) | $350 |
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| 3 | |
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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| 4 | |
Which of the following best describes an inferior good? |
| | A) | A good for which price and quantity demanded are directly related |
| | B) | A good for which price and quantity demanded are inversely related |
| | C) | A good for which income and quantity demanded are directly related |
| | D) | A good for which income and quantity demanded are inversely related |
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| 5 | |
If the supply of a product decreases and the demand for that product simultaneously increases, then equilibrium: |
| | A) | price must rise |
| | B) | price must fall |
| | C) | quantity must rise |
| | D) | quantity must fall |
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| 6 | |
Which will not cause supply to increase? |
| | A) | An increase in demand |
| | B) | A reduction in input prices |
| | C) | An improvement in technology |
| | D) | A lower price expected in the future |
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| 7 | |
The following data show the supply and demand schedule for a competitively produced good.
Price | Quantity supplied | Quantity demanded | $10 | 100 | 295 | 11 | 150 | 275 | 12 | 190 | 250 | 13 | 220 | 220 | 14 | 245 | 180 | 15 | 265 | 135 |
Refer to the above data. Suppose government were to fix the price at $14. As a result: |
| | A) | there would be a surplus of 65 units |
| | B) | there would be a shortage of 65 units |
| | C) | demand would increase |
| | D) | Supply would increase |
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| 8 | |
A change in quantity demanded reflects: |
| | A) | a shift in the demand curve to the left |
| | B) | a shift in the supply curve to the right |
| | C) | a movement along the demand curve as a result of a change in price |
| | D) | a shift in the demand curve to the right |
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| 9 | |
The Law of Demand states that: |
| | A) | an increase in price will cause a proportional change in demand. |
| | B) | there is a positive relationship between prices and quantity demanded. |
| | C) | consumers demand the production of goods and services in order to fill their wants and needs. |
| | D) | there is an inverse or negative relationship between price and quantity demanded. |
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| 10 | |
Answer the next question on the basis of the following diagram:
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Refer to the diagram. Suppose there is a preset price in this market of $6. We would expect a: |
| | A) | shortage, and the emergence of a secondary market |
| | B) | surplus, and the emergence of a secondary market |
| | C) | rightward shift of the supply curve |
| | D) | leftward shift of the demand curve |
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