Microeconomics CH3

If the demand curve shifts leftward, this means

a. quantity demanded is greater only at a particular price.
b. quantity demanded is less only at a particular price.
c. buyers are willing and able to purchase less of the good at every price.
d. quantity demanded is less at every price.
e. c and d

Which of the following would not cause the supply curve for good Z to shift?

a. a change in the price of good Z
b. a change in government regulations imposed upon the producers of good Z
c. a change in the price of a resource that is necessary for the production of good Z
d. a change in the number of firms producing and selling good Z

For an inferior good, when buyers' income rises, the equilibrium price of the good will ____________ and the equilibrium quantity will ________________.

a. decrease, decrease
b. decrease, increase
c. increase, increase
d. increase, decrease

When P = $4, the quantity demanded of a good is 40 units, and the quantity supplied of the good is 60 units. For every $1 decrease in the price of this good, quantity demanded rises by 5 units and quantity supplied falls by 5 units. The equilibrium price of this good is _____________ and the equilibrium quantity of this good is _______ units.

a. $3, 45
b. $2, 50
c. $1, 50
d. $2, 45
e. $1, 55

Which of the following illustrates the law of demand?

a. Karen buys fewer shirts at $30 each than at $25 each, ceteris paribus.
b. Jingnan buys more of a given soft drink at $4 a gallon than at $3 per gallon, ceteris paribus.
c. George buys fewer pens at $3 per pen than at $2 per pen, ceteris paribus.
d. a, b, and c
e. a and c

Which of the following would lead to a shift of the demand curve for chicken noodle soup?

a. a change in the price of chicken noodle soup
b. the government imposes a tax on soup producers of $0.50 tax per can produced
c. a change in the price of chicken rice soup
d. a change in technology in the production of chicken noodle soup

Which of the following would lead to a movement up along a given demand curve for carrots?

a. a decrease in the price of carrots
b. an increase in the price of carrots
c. an increase in the price of a substitute for carrots
d. a decrease in the price of a substitute for carrots

As the price of pears goes up, the demand for pears goes down." The author of this statement

a. implies that demand and price have a direct relationship.
b. implies that price and demand are unrelated.
c. uses the word "demand" when he should use the word "quantity demanded."
d. uses the word "demand" when he should use the word "supply."
e. none of the above

The law of demand states that price and ___________________ are ______________ related, ceteris paribus.

a. demand, inversely
b. quantity demanded, inversely
c. quantity supplied, directly
d. quantity demanded, directly

One point on a market supply curve represents $2 and 200 units quantity supplied. If there are three suppliers, and at a price of $2 one of the suppliers supplies 67 units, then which of the following combinations of price and quantity supplied might hold for the other two suppliers?

a. At $2, quantity supplied could be 40 units for one supplier and 93 for the other.
b. At $2, quantity supplied could be 33 units for one supplier and 93 for the other.
c. At $2, quantity supplied could be 84 units for one supplier and 38 for the other.
d. At $2, quantity supplied could be 45 units for the other and 54 for the other.
e. There is not enough information to answer the question.

Suppose that the government imposes a new $10 per-unit tax on the production of automobile tires. The result would be a(n) ________________ in the equilibrium price of automobile tires and a(n) ______________________in the equilibrium quantity of automobile tires.

a. increase, increase
b. increase, decrease
c. decrease, increase
d. decrease, decrease

If the producers of steel expect that the future price of steel will be substantially higher that it is now, the current supply curve for steel would likely

a. shift rightward.
b. not shift at all.
c. shift rightward, then immediately leftward.
d. shift leftward.

If the price paid and received is $4, the maximum buying price is $20, and the minimum selling price is $2, then consumers' surplus is equal to ___________ dollars and producers' surplus is _________ dollars.

a. $18, $2
b. $22, $24
c. $16, $2
d. $2, $18

Elizabeth states that when the price of bread goes up, the supply of bread increases because producers will want to make and sell more bread. An economist would say that Elizabeth is using the term "supply"

a. correctly.
b. incorrectly, when she should be using the term "demand."
c. incorrectly, when she should be using the term "quantity supplied."
d. incorrectly, when she should be using the term "quantity demanded."

The law of ________________________ is one of the reasons that help to explain the law of demand.

a. supply
b. increasing opportunity costs
c. diminishing marginal utility
d. normative economics

If the supply of bread increases at the same time that the demand for bread decreases, what would the impact be on the equilibrium price and quantity of bread?

a. The equilibrium price of bread would increase, but the impact on the equilibrium quantity of bread cannot be determined without more information.
b. The equilibrium quantity of bread would increase, but the impact on the equilibrium price of bread cannot be determined without more information.
c. The equilibrium price of bread would decrease and the equilibrium quantity of bread would remain constant.
d. The equilibrium price of bread would decrease, but the impact on the equilibrium quantity of bread cannot be determined without more information.

If the buyers of lumber expect that the price of lumber six months from now will be substantially higher that it is today, then the result would be ________________ of the current demand curve for lumber.

a. a rightward shift
b. no shift
c. a leftward shift
d. an immediate leftward shift and then a rightward shift

Which of the following illustrates the law of supply?

a. Company ABC increases the quantity supplied of its product as the price of that product rises.
b. Company ABC decreases the quantity supplied of its product as the price of that product rises.
c. Joan buys more of product ABC as the price of that product falls.
d. Joan buys less of product ABC as the price of that product falls.

If the government were to make licensure requirements for automobile repair shops stricter, the result would be a ____________________ shift of the ___________________ curve for automobile repair.

a. leftward; supply
b. rightward; supply
c. leftward; demand
d. rightward; demand

Quantity demanded is higher at an equilibrium price of $4 than at an equilibrium price of $3. This can be the result of

a. an increase in demand
b. a decrease in demand
c. an increase in supply
d. an increase in demand equal to the decrease in supply

If the price a buyer pays for a good is $33 and the maximum price she would be willing and able to pay is $45, then _________________ is ______________.

a. producers' surplus, $12
b. consumers' surplus, $12
c. producers' surplus $78
d. consumers' surplus, $78
e. consumers' surplus, $33

When the quantity of a good is less than the equilibrium quantity, it follows that the _____________ is ________________ the __________________.

a. minimum selling price, greater than, maximum buying price
b. maximum buying price, less than, minimum selling price
c. maximum buying price, greater than, minimum selling price
d. minimum selling price, less than, maximum buying price
e. c and d