question
The demand curve for a normal good slopes down for which of the following reasons?
I. An increase in the price of the good induces consumers to purchase substitute products.
II. An increase in the price of the good reduces consumer' purchasing power
III. An increase in the price of the good increases consumers' utility from consuming that good.
I. An increase in the price of the good induces consumers to purchase substitute products.
II. An increase in the price of the good reduces consumer' purchasing power
III. An increase in the price of the good increases consumers' utility from consuming that good.
answer
D. I and II only
question
Which of the following will NOT change the demand for oranges?
answer
C. A change in the price of oranges
question
If there is an increase in demand for a good, what will most likely happen to the price and quantity of the good exchanged?
Price & Quantity
Price & Quantity
answer
B. Increase & Increase
question
If hot dogs are inferior good, an increase in income will result in:
answer
D. A decrease in the demand for hot dogs
question
An increase in the price of gasoline will cause the demand curve for tires to shift in which direction?
answer
B. To the left, because gasoline and tires are complements
question
Which of the following situations best illustrates the law of demand?
answer
C. In the past several months, as the price of compact disc players has decreased, the quantity of compact disc players sold has increased.
question
If the cost of producing automobile increases, the price, equilibrium quantity and consumer surplus will most likely change in which of the following ways?
Price & Quantity & Consumer Surplus
Price & Quantity & Consumer Surplus
answer
C. Increase, Decrease, Decrease
question
Producer surplus is the:
answer
D. Amount the seller is paid less the cost of productions
question
During the 1990's, the price of VCR's fell by about 30 percent and quantity sold decreased by the same amount. The demand for VCR' s must:
answer
E. Have shifted to the left
question
Which of the following will occur if a legal price floor is place on a good below its free market equilibrium?
answer
D. The equilibrium is now more expensive compared to similar products
question
The substitution effect causes a consumer to buy less of a product when the price increases because the:
answer
B. Product is now more expensive compared to similar products
question
If the price of a good decrease by 3 percent and the total revenue increases, the demand for the product would be:
answer
B. Elastic
question
Which of the following is true in the elastic range of a firms demand curve?
answer
C. Decrease in price will likely lead to an increase in total revenue
question
During a football game, it starts to rain and the temperature drops. The senior class, which runs the concession stand and is studying economics, raises the price of coffee from 50 cents to 75 cents a cup? They sell more quantity than ever before. Which answer explains this?
answer
D. The demand for coffee was inelastic
question
The supply curve for automobile will shift to the left in response to:
answer
B. An increase in wages in the automobile industry
question
In a perfectly competitive market which of the following gifts in the supply and demand curves will definitely cause both of the equilibrium price and quantity to decrease?
Supply Curve & Demand Curve
Supply Curve & Demand Curve
answer
E. No Shift & Shifts to the left
question
Which of the following events will cause the demand curve for hamburgers to shift to the right?
answer
A. An increase in the price of pizza, a substitute for hamburgers
question
Assume that the demand for apples is down ward sloping? If the price of apples falls from $.80 per pound to $.65 per pound, which of the following will occur?
answer
B. A larger quantity of apples will be demanded
question
Which of the following statements about price control is true?
answer
E. Price ceilings and price floors result in a misallocation of resources
question
A country can consume beyond its present production possibilities curve when it:
answer
A. Trades with other countries, thus taking advantage of different opportunity costs
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