Microeconomics Assignment 2 Part 1

"In the corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?
A. In neither statement.
B. In the second statement.
C. In the first statement.
D. In both statements.

If government set a minimum price of $50 in the market, a:
A. shortage of 21 units would occur.
B. surplus of 21 units would occur.
C. surplus of 125 units would occur.
D. shortage of 125 units would occur.

In this market, economists would call a government-set maximum price of $40 a:
A. price floor.
B. equilibrium price.
C. price ceiling.
D. fair price.

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.

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 supply may have been caused by:
A. the development of more efficient machinery for producing this commodity.
B. an increase in the wages paid to workers producing this good.
C. this product becoming less fashionable.
D. an increase in consumer incomes.

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:
A. an increase in incomes if the product is an inferior good.
B. a decline in the price of a substitute good.
C. an increase in incomes if the product is a normal good.
D. a decline in the number of buyers in the market.

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 0A, respectively.
B. 0G and 0B, respectively.
C. 0F and 0C, respectively.
D. 0E and 0B, respectively.

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. If supply is S1 and demand D0, then
A. a surplus of GH would occur.
B. at any price above 0G a shortage would occur.
C. 0F represents a price that would result in a surplus of AC.
D. 0F represents a price that would result in a shortage of AC.

Refer to the diagram. A decrease in demand is depicted by a:
A. move from point x to point y.
B. shift from D2 to D1.
C. move from point y to point x.
D. shift from D1 to D2.

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. move from point y to point x.
D. shift from D2 to D1.

Refer to the diagram. A decrease in supply is depicted by a:
A. move from point x to point y.
B. move from point y to point x.
C. shift from S2 to S1.
D. shift from S1 to S2.

Refer to the diagram. A government price support program to aid farmers is best illustrated by:
A. quantity E.
B. price B.
C. price A.
D. price C.

Refer to the diagram. A government-set price ceiling is best illustrated by:
A. price A.
B. quantity E.
C. price B.
D. price C.

Refer to the diagram. A government-set price floor is best illustrated by:
A. price B.
B. price A.
C. quantity E.
D. price C.

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.

Refer to the diagram. A price of $60 in this market will result in:
A. a surplus of 100 units.
B. equilibrium.
C. a shortage of 50 units.
D. a surplus of 50 units.

Refer to the diagram. A shortage of 160 units would be encountered if price was:
A. $1.60.
B. $1.00.
C. $0.50.
D. $1.10, that is, $1.60 minus $.50.

Refer to the diagram. An increase in quantity supplied is depicted by a:
A. move from point y to point x.
B. shift from S2 to S1.
C. shift from S1 to S2.
D. move from point x to point y.

Refer to the diagram. If this is a competitive market, price and quantity will move toward:
A. $60 and 100, respectively.
B. $20 and 150, respectively.
C. $60 and 200, respectively.
D. $40 and 150, respectively.

Refer to the diagram. Rent controls are best illustrated by:
A. price C.
B. quantity E.
C. price A.
D. price B.

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:
A. $10 and 60 units.
B. $9 and 50 units.
C. $8 and 60 units.
D. $7 and 50 units.

Refer to the table. In relation to column (3), a change from column (1) to column (2) would mostly likely be caused by:
A. reduced taste for the good.
B. government subsidizing production of the good.
C. an increase in input prices.
D. consumers expecting that prices will be lower in the future.

Refer to the table. In relation to column (3), a change from column (5) to column (4) would indicate a(n):
A. decrease in supply.
B. decrease in demand.
C. increase in supply.
D. increase in demand.

Refer to the table. In relation to column (3), a change from column (4) to column (5) would most likely be caused by:
A. an improvement in production technology.
B. government placing an excise tax on the good.
C. an increase in consumer income.
D. an increase in input prices.

Refer to the 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. the market would clear.
B. demand would change from columns (3) and (2) to columns (3) and (1).
C. a shortage of 20 units would occur.
D. a surplus of 20 units would occur.

Which of the diagrams illustrate(s) the effect of a decline in the price of personal computers on the market for software?
A. A and D.
B. A only.
C. B only.
D. D only.

Which of the diagrams illustrates the effect of an increase in automobile worker wages on the market for automobiles?
A. C only.
B. D only.
C. A only.
D. B only.

A demand curve:
A. graphs as an upsloping line.
B. shows the relationship between price and quantity supplied.
C. shows the relationship between income and spending.
D. indicates the quantity demanded at each price in a series of prices.

A decrease in the price of digital cameras will:
A. cause the demand curve for memory cards to become vertical.
B. not affect the demand for memory cards.
C. shift the demand curve for memory cards to the left.
D. shift the demand curve for memory cards to the right.

A firm's supply curve is upsloping because:
A. mass production economies are associated with larger levels of output.
B. beyond some point the production costs of additional units of output will rise.
C. consumers envision a positive relationship between price and quality.
D. the expansion of production necessitates the use of qualitatively inferior inputs.

A leftward shift of a product supply curve might be caused by:
A. an improvement in the relevant technique of production.
B. an increase in consumer incomes.
C. a decline in the prices of needed inputs.
D. some firms leaving an industry.

A market is in equilibrium:
A. whenever the demand curve is downsloping and the supply curve is upsloping.
B. at all prices above that shown by the intersection of the supply and demand curves.
C. provided there is no surplus of the product.
D. if the amount producers want to sell is equal to the amount consumers want to buy

A market:
A. always requires face-to-face contact between buyer and seller.
B. reflects upsloping demand and downsloping supply curves.
C. entails the exchange of goods, but not services.
D. is an institution that brings together buyers and sellers.