Principles of Microeconomics Quiz 3

question

Surpluses drive market prices up; shortages drive them down

answer

False

question

An increase in the price of digital cameras will result in a(n)

answer

movement up and to the left along the demand curve for digital cameras.

question

A black market could arise as a result of

answer

the imposition of a legal price ceiling below the equilibrium price.

question

Because successive units of a good produce less and less additional satisfaction, the price must fall to encourage a buyer to purchase more units of the good. This statement is most consistent with which explanation for the law of demand?

answer

diminishing marginal utility

question

Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5 both are running out of beads to sell (they can't keep up with the quantity demanded at that price), then we would expect both Camille's and Julia's to

answer

raise their price and increase their quantity supplied.

question

There is a shortage in a market for a product when

answer

quantity demanded is greater than quantity supplied.

question

An improvement in production technology will

answer

shift the supply curve to the right.

question

The law of supply indicates that, other things equal,

answer

producers will offer more of a product at high prices than at low prices.

question

Which of the following is most likely to be an inferior good?

answer

used clothing

question

A surplus of a product will arise when price is

answer

above equilibrium, with the result that quantity supplied exceeds quantity demanded.

question

A price floor in a competitive market will result in persistent shortages of a product.

answer

False

question

At the current price, there is a shortage of a product. We would expect price to

answer

increase, quantity demanded to decrease, and quantity supplied to increase.

question

In moving along a supply curve, which of the following is not held constant?

answer

the price of the product itself.

1 of 13

question

Surpluses drive market prices up; shortages drive them down

answer

False

question

An increase in the price of digital cameras will result in a(n)

answer

movement up and to the left along the demand curve for digital cameras.

question

A black market could arise as a result of

answer

the imposition of a legal price ceiling below the equilibrium price.

question

answer

diminishing marginal utility

question

answer

raise their price and increase their quantity supplied.

question

There is a shortage in a market for a product when

answer

quantity demanded is greater than quantity supplied.

question

An improvement in production technology will

answer

shift the supply curve to the right.

question

The law of supply indicates that, other things equal,

answer

producers will offer more of a product at high prices than at low prices.

question

Which of the following is most likely to be an inferior good?

answer

used clothing

question

A surplus of a product will arise when price is

answer

above equilibrium, with the result that quantity supplied exceeds quantity demanded.

question

A price floor in a competitive market will result in persistent shortages of a product.

answer

False

question

At the current price, there is a shortage of a product. We would expect price to

answer

increase, quantity demanded to decrease, and quantity supplied to increase.

question

In moving along a supply curve, which of the following is not held constant?

answer

the price of the product itself.

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