Enter your answer to each of the questions in the blank to the left of the question. Be sure to use lowercase letters only!
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1. Which of the following shows the relationship between the price of a good and the amount of that good that consumers want at that price?
a. supply curve
b. demand curve
c. supply schedule
d. production possibilities frontier
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2. The law of downward-sloping demand states that:
a. as price increases, quantity demanded increases.
b. as price decreases, quantity demanded increases.
c. as price increases, quantity demanded decreases.
d. as price decreases, demand increases.
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3. When the price of good X increases and consumers substitute good Y for good X, we call that the:
a. income effect.
b. backwards effect.
c. substitution effect.
d. demand effect.
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4. When the price of good X increases and consumers demand less of good X because the increase in price has made them relatively poorer, we call that the:
a. income effect.
b. supply effect.
c. substitution effect.
d. money multiplier effect.
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5. If we were to sum the quantity demanded by every consumer in the market at every price and plot those sums versus the price, we would obtain the:
a. supply curve.
b. summed demand curve.
c. market demand curve.
d. vertical demand curve.
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6. Which of the following is not a determinant of demand for good X:
a. average income.
b. population.
c. tastes and preferences.
d. price of good X.
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7. If less consumers like broccoli, we would expect that:
a. demand for broccoli would decrease and the demand curve for broccoli would shift to the left.
b. demand for broccoli would increase and the demand curve for broccoli would shift to the left.
c. demand for broccoli would decrease and the demand curve for broccoli would shift to the right.
d. demand for broccoli would increase and the demand curve for broccoli would shift to the right.
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8. The demand curve will shift when:
a. the price of the good changes.
b. the price of the good changes and when the underlying determinants of demand change.
c. the underlying determinants of demand change.
d. never.
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9. Which of the following shows the relationship between the price of a good and the amount of that good that producers are willing to supply?
a. supply curve
b. demand curve
c. supply schedule
d. production possibilities frontier
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10. Which of the following factors will cause the supply curve to shift:
a. Changes in technology.
b. Changes in input prices.
c. Changes in the prices of related goods.
d. Changes in government policies.
e. All of the above.
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11. A change in the price of good X will cause:
a. a shift of the supply curve.
b. a movement along the supply curve.
c. both a and b.
d. neither a nor b.
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12. The market-clearing price is also called the ___________ and is the price at which:
a. prevailing price; the supply and demand curve cross.
b. prevailing price; the supply curve crosses the y-axis.
c. equilibrium price; the supply and demand curve cross.
d. special price; the supply and demand curve cross.
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13. The equilibrium price and quantity are that price and quantity at which:
a. the quantity demanded by consumers and the quantity supplied by producers is equal.
b. the supply and demand curves cross.
c. both a and b.
d. neither a nor b.
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14. Other things held equal, if demand increases, equilibrium price will __________ and equilibrium quantity will __________. However, if supply increases, equilibrium price will _________ and equilibrium quantity will __________, other things held equal.
a. decrease; decrease; increase; increase
b. increase; increase; decrease; increase
c. decrease; decrease; increase; decrease
d. increase; increase; decrease; decrease
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15. The forces of demand and supply determine:
a. What is produced.
b. For whom the goods are produced.
c. How the goods are produced.
d. All of the above.
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