Multiple Choice Questions

Other things equal, which of the following might shift the demand curve for gasoline to the left?
  • The development of a low-cost electric automobile.
  • The expectation by consumers that gasoline prices will be higher in the future.
  • product supply curve of X will shift to the right.
  • An increase in money income if A is an inferior good.
Which of the following is most likely to be an inferior good?
  • The expectation by consumers that gasoline prices will be higher in the future.
  • A. price A.
  • An increase in money income if A is an inferior good.
  • Used clothing.
Refer to the diagram. If this is a competitive market, price and quantity will move toward:A. $60 and 100, respectively.B. $60 and 200, respectively.C. $40 and 150, respectively.D. $20 and 150, respectively.
  • C. price C.
  • C. shift from D2 to D1.
  • D. shortage of 100 units.
  • C. $40 and 150, respectively.
A price floor means that:
  • if the amount producers want to sell is equal to the amount consumers want to buy.
  • government is imposing a minimum legal price that is typically above the equilibrium price.
  • consumers want to buy less than producers offer for sale.
  • above equilibrium, with the result that quantity supplied exceeds quantity demanded.
Other things equal, if the price of a key resource used to produce product X falls, the:
  • The development of a low-cost electric automobile.
  • A and B are complementary goods.
  • D. a surplus of 100 units.
  • product supply curve of X will shift to the right.
A market:
  • producing the combination of goods most desired by society.
  • there are no pressures on price to either rise or fall.
  • if the amount producers want to sell is equal to the amount consumers want to buy.
  • is an institution that brings together buyers and sellers.
Productive efficiency refers to:
  • interfere with the rationing function of prices.
  • result in a product shortage.
  • producing the combination of goods most desired by society.
  • the use of the least-cost method of production.
If two goods are complements:
  • if the amount producers want to sell is equal to the amount consumers want to buy.
  • interfere with the rationing function of prices.
  • government is imposing a minimum legal price that is typically above the equilibrium price.
  • a decrease in the price of one will increase the demand for the other.
When the price of a product increases, a consumer is able to buy less of it with a given money income. This describes the:
  • income effect.
  • C. price C.
  • A. $1.00 and 200.
  • the substitution effect.
A leftward shift of a product supply curve might be caused by:
  • some firms leaving an industry.
  • price and quantity demanded.
  • the price of the product will rise.
  • demand curve for X to the right.
Blu-ray players and Blu-ray discs are:
  • independent goods.
  • increases product supply.
  • complementary goods.
  • result in a product surplus.
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:A. the equilibrium position has shifted from M to K.B. an increase in demand has been more than offset by an increase in supply.C. the new equilibrium price and quantity are both greater than originally.D. point M shows the new equilibrium position.
  • C. $40 and 150, respectively.
  • B. an increase in demand has been more than offset by an increase in supply.
  • A. 0F and 0C, respectively.
  • D. a surplus of 100 units.
Refer to the diagram. A government-set price ceiling is best illustrated by:A. price A.B. quantity E.C. price C.D. price B.
  • A. $1.00 and 200.
  • C. price C.
  • A. price A.
  • B. $60.
Refer to the diagram. The highest price that buyers will be willing and able to pay for 100 units of this product is:A. $30.B. $60.C. $40.D. $20.
  • A. price A.
  • A. $1.00 and 200.
  • B. $60.
  • C. price C.
Refer to the diagram. The equilibrium price and quantity in this market will be:A. $1.00 and 200.B. $1.60 and 130.C. $0.50 and 130.D. $1.60 and 290.
  • C. shift from D2 to D1.
  • A. $1.00 and 200.
  • C. $40 and 150, respectively.
  • C. shift from S2 to S1.
Refer to the diagram. A decrease in quantity demanded is depicted by a:A. move from point x to point y.B. shift from D1 to D2.C. shift from D2 to D1.D. move from point y to point x.
  • D. a surplus of 100 units.
  • C. shift from D2 to D1.
  • C. shift from S2 to S1.
  • D. move from point y to point x.
Economists use the term "demand" to refer to:
  • The expectation by consumers that gasoline prices will be higher in the future.
  • if the amount producers want to sell is equal to the amount consumers want to buy.
  • a schedule of various combinations of market prices and amounts/quantities demanded.
  • the use of the least-cost method of production.
If X is a normal good, a rise in money income will shift the:
  • D. move from point y to point x.
  • A and B are complementary goods.
  • price and quantity demanded.
  • demand curve for X to the right.
Refer to the diagram. A decrease in demand is depicted by a:A. move from point x to point y.B. shift from D1 to D2.C. shift from D2 to D1.D. move from point y to point x.
  • D. move from point y to point x.
  • C. shift from D2 to D1.
  • C. price C.
  • D. a surplus of 100 units.
A surplus of a product will arise when price is:
  • a decrease in the price of one will increase the demand for the other.
  • if the amount producers want to sell is equal to the amount consumers want to buy.
  • above equilibrium, with the result that quantity supplied exceeds quantity demanded.
  • a schedule of various combinations of market prices and amounts/quantities demanded.
An effective ceiling price will:
  • result in a product shortage.
  • result in a product surplus.
  • the use of the least-cost method of production.
  • shift the supply curve to the right.
A government subsidy to the producers of a product:
  • shift the supply curve to the right.
  • bicycles are normal goods.
  • increases product supply.
  • price and quantity demanded.
Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. If the initial demand and supply curves are D0 and S0, equilibrium price and quantity will be:A. 0F and 0C, respectively.B. 0G and 0B, respectively.C. 0F and 0A, respectively.D. 0E and 0B, respectively.
  • B. demand has increased and equilibrium price has decreased.
  • D. a surplus of 100 units.
  • A. 0F and 0C, respectively.
  • D. shortage of 100 units.
Refer to the diagram. A government-set price floor is best illustrated by:A. price A.B. quantity E.C. price C.D. price B.
  • C. price C.
  • D. shortage of 100 units.
  • C. shift from S2 to S1.
  • A. price A.
Refer to the diagram. A price of $20 in this market will result in a:A. shortage of 50 units.B. surplus of 50 units.C. surplus of 100 units.D. shortage of 100 units.
  • C. $40 and 150, respectively.
  • D. shortage of 100 units.
  • C. shift from S2 to S1.
  • C. shift from D2 to D1.
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:A. supply has decreased and equilibrium price has increased.B. demand has increased and equilibrium price has decreased.C. demand has decreased and equilibrium price has decreased.D. demand has increased and equilibrium price has increased.
  • B. an increase in demand has been more than offset by an increase in supply.
  • B. demand has increased and equilibrium price has decreased.
  • D. move from point y to point x.
  • A. 0F and 0C, respectively.
In presenting the idea of a demand curve, economists presume the most important variable in determining the quantity demanded is:
  • A and B are complementary goods.
  • the substitution effect.
  • the price of the product itself.
  • D. move from point y to point x.
The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.
  • direct; inverse
  • A. price A.
  • C. price C.
  • income effect.
An improvement in production technology will:
  • result in a product surplus.
  • shift the supply curve to the right.
  • price and quantity demanded.
  • the price of the product will rise.
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Multiple Choice Questions
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