Econ Chapter 3 Quiz

Total Flash Cards » 30
 
1. 

refer to the above table. suppose that demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5). if the price were artificially set at $6, a:

 

a shortage of 40 units would occur.

 
2. 

refer to the above data. equilibrium price will be:

 

$2.00

 
3. 

a market is in equilibrium:

 

if the amount producers want to sell is equal to the amount consumers want to buy.

 
4. 

the rationing function of prices refers to the:

 

capacity of a competitive market to equate the quantity demanded and the quantity supplied

 
5. 

which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

 

a decrease in supply.

 
6. 

a market:

 

is an institution that brings together buyers and sellers.

 
7. 

the law of demand states that:

 

price and quantity demanded are inversely related.

 
8. 

graphically, the market demand curve is:

 

the horizontal sum of individual demand curves.

 
9. 

the demand curve shows the relationship between:

 

price and quantity demanded.

 
10. 

the relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.

 

direct, inverse

 
11. 

in presenting the idea of a demand curve economists presume that the most important variable in determining the quantity demanded is:

 

the price of the product itself.

 
12. 

the construction of demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:

 

price.

 
13. 

in the past few years, the demand for donuts has greatly increased. this increase in demand might best be explained by:

 

a change in buyer tastes.

 
14. 

which of the following will not cause the demand for product k to change?

 

a change in the price of k

 
15. 

an economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. this prediction is based on the assumption that:

 

bicycles are normal goods.

 
16. 

a rightward shift in the demand curve for product c might be caused by

 

a decrease in the price of a product that is complementary to c.

 
17. 

if two goods are complements:

 

a decrease in the price of one will increase the demand for the other.

 
18. 

dvd players and dvds are:

 

complementary goods.

 
19. 

if the price of product l increases, the demand curve for close-substitute product j will:

 

shift to the right.

 
20. 

if z is an inferior good, an increase in money income will shift the:

 

demand curve for z to the left.

 
21. 

the demand curve for a product might shift as the result of a change in:

 

All of these

 
22. 

refer to the above diagram. a decrease in supply is depicted by a:

 

shift from s2 to s1.

 
23. 

the law of supply indicates that:

 

producers will offer more of a product at high prices than they will at low prices.

 
24. 

the supply curve shows the relationship between:

 

price and quantity supplied.

 
25. 

a leftward shift of a product supply curve might be caused by:

 

some firms leaving an industry.

 
26. 

in moving along a stable supply curve which of the following is not held constant?

 

the price of the product for which the supply curve is relevant

 
27. 

other things equal, if the price of a key resource used to produce product x falls, the:

 

product supply curve of x will shift to the right.

 
28. 

an increase in the excise tax on cigarettes raises the price of cigarettes by shifting the:

 

supply curve for cigarettes leftward.

 
29. 

a government subsidy to the producers of a product:

 

increases product supply.

 
30. 

refer to the above table. suppose that demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5). if the price were artificially set at $9, a

 

a surplus of 20 units would occur.