Multiple Choice Questions

Refer to the table. If demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5), equilibrium price and quantity will be:
  • $9 and 60 units.
  • Graph A
  • $8 and 60 units.
  • demand has increased and equilibrium price has decreased.
A decrease in the price of digital cameras will:
  • price and quantity demanded.
  • if the amount producers want to sell is equal to the amount consumers want to buy.
  • the quantity demanded at each price in a set of prices is greater.
  • shift the demand curve for memory cards to the right.
Refer to the diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market:
  • 0F represents a price that would result in a shortage of AC.
  • increase in the price of complementary good Y
  • an increase in incomes if the product is a normal good.
  • demand has increased and equilibrium price has decreased.
Which of the diagrams illustrates the effect of a governmental subsidy on the market for AIDS research?
  • A only
  • $1.60
  • C only
  • $0.50.
Which of the following would most likely increase the demand for gasoline?
  • move from point y to point x
  • the quantity that consumers want to purchase and the amount producers choose to sell are the same.
  • The expectation by consumers that gasoline prices will be higher in the future.
  • increase in the wage rates paid to laborers employed in the production of X
At the point where the demand and supply curves for a product intersect:
  • The expectation by consumers that gasoline prices will be higher in the future.
  • consumer preferences have changed in favor of A so that they now want to buy more at each possible price.
  • the quantity that consumers want to purchase and the amount producers choose to sell are the same.
  • the quantity demanded at each price in a set of prices is greater.
A decrease in the demand for recreational fishing boats might be caused by an increase in the:
  • shift the demand curve for memory cards to the right.
  • consumer incomes have fallen.
  • move from point y to point x
  • price of outboard motors.
Refer to the diagram. An increase in quantity supplied is depicted by a:
  • a surplus of 100 units.
  • demand has increased and equilibrium price has decreased.
  • move from point y to point x
  • shortage of 100 units.
Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will:
  • increase, quantity demanded will decrease, and quantity supplied will increase.
  • increase in the wage rates paid to laborers employed in the production of X
  • decrease, quantity demanded will increase, and quantity supplied will decrease.
  • rise, the supply of bread to decrease, and the demand for potatoes to increase.
The demand curve shows the relationship between:
  • move from point y to point x
  • price and quantity demanded.
  • consumer incomes have fallen.
  • price of outboard motors.
Assume in a competitive market that price is initially below the equilibrium level. We can predict that price will:
  • decrease, quantity demanded will increase, and quantity supplied will decrease.
  • increase, quantity demanded will decrease, and quantity supplied will increase.
  • rise, the supply of bread to decrease, and the demand for potatoes to increase.
  • increase in the wage rates paid to laborers employed in the production of X
A decrease in supply of X increases the equilibrium price of X, which reduces the demand for X and automatically returns the price of X to its initial level.
  • True
  • False
A market is in equilibrium:
  • shift the demand curve for memory cards to the right.
  • if the amount producers want to sell is equal to the amount consumers want to buy.
  • a decrease in the price of one will increase the demand for the other.
  • demand for A will increase and the quantity of B demanded will increase.
Refer to the four graphs above. Select the graph above that best shows the changes in demand and supply in the market specified in the following situation: In the market for corn, if gasoline producers use more ethanol from corn, and good weather during the growing season yields a bumper harvest.
  • Graph C
  • $0.50.
  • Graph D
  • Graph A
Refer to the diagram. A surplus of 160 units would be encountered if the price was:
  • $60
  • shortage of 100 units.
  • $0.50.
  • $1.60
If the demand for steak (a normal good) shifts to the left, the most likely reason is that:
  • move from point y to point x
  • price of outboard motors.
  • consumer incomes have fallen.
  • price and quantity demanded.
A shift to the right in the demand curve for product A can be most reasonably explained by saying that:
  • increase, quantity demanded will decrease, and quantity supplied will increase.
  • decrease, quantity demanded will increase, and quantity supplied will decrease.
  • consumer incomes have fallen.
  • consumer preferences have changed in favor of A so that they now want to buy more at each possible price.
Refer to the four graphs above. In which graph would the indicated shifts cause equilibrium quantity to definitely rise, but the effect on price is indeterminate?
  • increase in the price of complementary good Y
  • Graph C
  • Graph D
  • Graph A
Assume a drought in the Great Plains reduces the supply of wheat. Noting that wheat is a basic ingredient in the production of bread and potatoes are a consumer substitute for bread, we would expect the price of wheat to:
  • rise, the supply of bread to decrease, and the demand for potatoes to increase.
  • decrease, quantity demanded will increase, and quantity supplied will decrease.
  • supply has decreased and equilibrium quantity has decreased
  • an increase in incomes if the product is a normal good.
Surpluses drive market prices up; shortages drive them down.
  • True
  • False
Refer to the diagram. A price of $60 in this market will result in:
  • move from point y to point x
  • increase in demand.
  • shortage of 100 units.
  • a surplus of 100 units.
By an "increase in demand," economists mean that:
  • the quantity that consumers want to purchase and the amount producers choose to sell are the same.
  • shift the demand curve for memory cards to the right.
  • The expectation by consumers that gasoline prices will be higher in the future.
  • the quantity demanded at each price in a set of prices is greater.
Refer to the table. If demand is represented by columns (3) and (1) and supply is represented by columns (3) and (4), equilibrium price and quantity will be:
  • $9 and 60 units.
  • $8 and 60 units.
  • Graph A
  • increase in demand.
Refer to the four graphs above. Select the graph that best shows the changes in demand and supply in the market specified in the following situation: In the market for beef, if a new diet fad favoring beef consumption becomes hugely popular, while cattle producers see steeply rising costs of cattle feed.
  • Graph C
  • $9 and 60 units.
  • Graph A
  • Graph D
Refer to the four graphs above. Select the graph above that best shows the changes in demand and supply in the market specified in the following situation: In the market for music CDs sold in stores, if more consumers switch to music-downloads from the Internet, and the cost of making music CDs decreases because of technological improvement in production.
  • Graph C
  • Graph A
  • $8 and 60 units.
  • Graph D
Refer to the diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market the indicated shift in demand may have been caused by:
  • increase in the wage rates paid to laborers employed in the production of X
  • an increase in incomes if the product is a normal good.
  • demand has increased and equilibrium price has decreased.
  • increase in the price of complementary good Y
Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. Other things equal, a shift of the supply curve from S0 to S1 might be caused by a(n):
  • increase in demand.
  • 0F represents a price that would result in a shortage of AC.
  • increase in the price of complementary good Y
  • increase in the wage rates paid to laborers employed in the production of X
Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. A shift in the demand curve from D0 to D1 might be caused by a(n):
  • increase in the wage rates paid to laborers employed in the production of X
  • increase in the price of complementary good Y
  • 0F represents a price that would result in a shortage of AC.
  • demand has increased and equilibrium price has decreased.
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Multiple Choice Questions
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