Microeconomics Section 2 Test

SEE FIGURE 5-1
If a coconut is a normal good and the price of coconuts increases, then the movement that could take place in the model would be
A C to A
B E to B
C B to E
D B to E
E B to A

SEE FIGURE 5-1
If fish is a substitute good for coconuts and the price of fish increases, then the movement that would take place in the model could be:
A A to C
B C to A
C B to E
D B to A
E A to B

SEE FIGURE 5-1
If coconuts are considered a normal good and the overall income level of consumers is falling, then the movement that would take place in the model could be:
A B to A
B A to B
C E to B
D A to C
E C to A

SEE FIGURE 5-1
If there is an overall increase in taste and preference for coconuts, then the movement that would take place in the model could be:
A A to C
B B to E
C B to A
D A to B
E C to A

If steak and potatoes are complements, when the price of steak goes up, the demand curve for potatoes:
A will get steeper and shift to the right
B shifts to the left
C stays the same
D will get flatter and shift to the right
E shifts to the right

SEE TABLE 5-1
If George, Barbara, and Dan are the only three buyers in the market, and the price of a bag of chocolate-covered peanuts is $0.50, the total market demand is ________ bags per month.

A 280
B 210
C 105
D 80
E 140

SEE FIGURE 6-1
If the price of coconuts decreases, then the movement that would take place in the model could be:

A B to A
B A to B
C E to B
D C to A
E A to C

SEE FIGURE 6-1
If the prices of inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts are increasing, then the movement in the model could be:
A C to A
B B to A
C A to B
D B to C
E E to B

SEE FIGURE 6-1
If the prices of inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts are decreasing, then the movement in the model could be:

A B to E
B A to B
C E to B
D C to A
E B to A

SEE FIGURE 6-1
If there is an expectation on the part of coconut suppliers that the price of coconuts will be significantly higher in the very near future, then the movement in the model to reflect today's market behavior would be:

A E to B
B B to A
C A to B
D B to E
E A to C

Milk is an important ingredient in the production of ice cream. If the price of milk increases, then one would expect, holding all other things constant:

A no change in the supply curve for ice cream
B a movement along the supply curve for ice cream curve, resulting in more ice cream supplied.
C the supply curve for ice cream to shift right
D the supply curve for ice cream to shift left
E the demand curve for ice cream to shift to the left.

You notice that the price of DVD players falls and the quantity of DVD players sold increases. This set of observations can be the result of the:

A simultaneous shifting of supply and demand to the left
B supply of DVD players shifting to the left
C demand for DVD players shifting to the right
D demand for DVD players shifting to the left
E supply of DVD players shifting to the right

The market price of airline flights increased recently. Some economists suggest that the price increased because several airlines went out of business. If the economists are correct, it must be the case that:

A demand increased
B supply increased
C supply increased while demand also decreased
D supply decreased
E demand decreased

SEE FIGURE 7-3
A reputable scientist asserts in a major scientific publication that drinking orange juice will increase your life span. We can expect the new equilibrium point in the orange juice market to be at:

A A
B B
C C
D D
EE

Consider two competing motorcycle manufacturers, Harley-Davidson and Honda. If Harley-Davidson raises the price that it charges for its motorcycles, we can expect:

A a shift to the right in the supply curve of Hondas and lower prices for Hondas.

B a shift to the right in the demand curve for Hondas and lower prices for Hondas.

C a shift to the left in the supply curve of Hondas and higher prices for Hondas.

D a shift to the right in the demand curve for Hondas and higher prices for Hondas

E a shift to the left in the demand curve for Hondas and lower prices for Hondas

SEE FIGURE 7-5
The figure shows the weekend rental market for DVDs in Collegetown. The equilibrium price for DVD rentals is ________ and the equilibrium quantity is ________.

A $5, 50
B $9, 90
C $6, 40
D $3, 30
E $7, 30

SEE FIGURE 7-5
At a rental price of $3, there will be

A an increase in demand
B an excess demand of 40 DVD rentals
C An excess demand of 10 DVD rentals
D an excess supply of 40 DVD rentals
E equilibrium in the rental market for DVD's

SEE FIGURE 7-5
At a rental price of $6, there will be:

A an excess supply of 20 DVD rentals
B an excess demand of 20 DVD rentals.
C an excess supply of 40 DVD rentals.
D a decrease in demand.
E equilibrium in the rental market for DVDs.

SEE FIGURE 9-1
The government imposes a quota limiting sales of clams to 1,000 pounds. According to the figure, the quota rent per pound in this case is:

A $5,000
B $5.00
C $2.50
D $7.50
E $2,500

The market for salmon is in equilibrium. A price ceiling, a price floor, and a quota in this market would all have what outcome in common?

A Inefficiencies created by a transfer of surplus from consumers to producers.

B Inefficiencies created by a quantity exchanged that is less than the equilibrium quantity

C Revenue collected by the government on each unit of salmon harvested

D Inefficiencies created by a quantity exchanged that is greater than the equilibrium quantity.

E a supply price that exceeds a demand price

Inefficient allocations of goods to consumers often result from:

A producer surplus
B consumer surplus
C equilibrium quantities
D equilibrium prices
E price ceilings