Econ Chapter 3 - Test Questions

Which statement is consistent with the law of demand?

- A reduction in market price will lead to a decrease in quantity demanded.

- A reduction in market price will lead to an increase in quantity demanded.

- An increase in market price will lead to an increase in quantity demanded.

- At a zero price quantity demanded will be equal to zero.

- A reduction in market price will lead to an increase in quantity demanded.

Which of the following characteristics lead to a downward-sloping demand curve? Select all that apply.

- Increasing opportunity costs

- Increasing marginal benefit

- Diminishing preferences for a particular good

- A decline in the price of a related good

- An increase in purchasing power as market price decreases

- Diminishing marginal utility

- An increase in purchasing power as market price decreases - Diminishing marginal utility

How is a market demand curve derived from individual demand curves?

- Add up quantities demanded by all individual consumers for each price

- Calculate the average quantity demanded among all consumers

- Add up prices paid for each unit demanded by individuals

- Use the largest quantity demanded among all consumers for each price

- Add up quantities demanded by all individual consumers for each price

Which statement is consistent with the law of supply?

- An increase in market price will lead to an increase in quantity supplied.

- At a zero price quantity supplied will be infinite.

- A reduction in market price will lead to an increase in quantity supplied.

- An increase in market price will lead to a decrease in quantity supplied.

- An increase in market price will lead to an increase in quantity supplied.

Which of the following characteristics leads to a upward-sloping supply curve? Select all that apply.

- Increasing opportunity costs

- Increasing marginal costs

- Diminishing marginal utility

- A decrease in resource prices

- An increase in resource prices

- Increasing labor productivity

- Increasing opportunity costs - Increasing marginal costs

How do you derive a market supply curve from individual supply curves?

- Calculate the average quantity supplied among all producers

- Add up quantities supplied by all individual producers for each price

- Add up prices paid for each unit supplied by producers

- Use the largest quantity supplied among all producers for each price

- Add up quantities supplied by all individual producers for each price

In 2001 an outbreak of hoof-and-mouth disease in Europe led to the burning of millions of cattle carcasses. What impact do you think this had on the following?

- increase
- decrease

a. The supply of cattle hides:

b. Hide prices:

c. The supply of leather goods:

d. The price of leather goods:

a.) decrease b.) increase c.) decrease d.) increase

What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500?

- increase
- decrease
- no change
- cannot be determined

a. Small automobiles become more fashionable: .

b. The price of large automobiles rises (with the price of small autos remaining the same): .

c. Income declines and small autos are an inferior good: .

d. Consumers anticipate that the price of small autos will greatly come down in the near future: .

e. The price of gasoline substantially drops: .

a.) - increase b.) - increase c.) - increase d.) - decrease e.) - cannot be determined

What effect will each of the following have on the supply of auto tires? (Keeping all else constant)

- Increase
- Decrease
- No change

a. A technological advance in the methods of producing tires: .

b. A decline in the number of firms in the tire industry: .

c. An increase in the prices of rubber used in the production of tires: .

d. The expectation that the equilibrium price of auto tires will be lower in the future than currently: .

e. A decline in the price of large tires used for semi trucks and earth-hauling rigs, a substitute in production. (with no change in the price of auto tires): .

f. The levying of a per-unit tax on each auto tire sold: .

g. The granting of a 50-cent-per-unit subsidy for each auto tire produced: .

a.) - Increase b.) - Decrease c.) - Decrease d.) - Increase e.) - Increase f.) - Decrease g.) - Increase

Suppose that in the market for computer memory chips, the equilibrium price is $50 per chip. If the current price is $55 per chip, then there will be ________ of memory chips.

- surplus
- shortage
- equilibrium quantity

- surplus

A price ceiling will result in a shortage only if the ceiling price is _________ the equilibrium price.

- less than
- greater than
- equal to

- less than

How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity increase or decrease, or are the answers indeterminate because they depend on the magnitudes of the shifts?

- Increases
- Decreases
- Indeterminate

a. Supply decreases and demand is constant.

Price:
Quantity

b. Demand decreases and supply is constant.

Price:
Quantity:

c. Supply increases and demand is constant.

Price:
Quantity:

d. Demand increases and supply increases.

Price:
Quantity:

e. Demand increases and supply is constant.

Price:
Quantity:

f. Supply increases and demand decreases.

Price:
Quantity:

g. Demand increases and supply decreases.

Price:
Quantity:

h. Demand decreases and supply decreases.

Price:
Quantity:

a.) - Increases - Decreases b.) - Decreases - Decreases c.) - Decreases - Increases d.) - Indeterminate - Increases e.) - Increases - Increases f.) - Decreases - Indeterminate g.) - Increases - Indeterminate h.) - Indeterminate - Decreases

Will the equilibrium price of orange juice increase or decrease in each of the following situations?

- increase
- decrease
- indeterminate

a. A medical study reporting that orange juice reduces cancer is released at the same time that a freak storm destroys half of the orange crop in Florida: ___________ .

b. The prices of all beverages except orange juice fall by half while unexpectedly perfect weather in Florida results in an orange crop that is 20 percent larger than normal:__________ .

a.) - increase b.) - decrease

A price ceiling will result in a shortage only if the ceiling price is _________ the equilibrium price.

- greater than
- less than
- faster than
- equal to

- less than

Econ Chapter 3 - Test Questions - Subjecto.com

Econ Chapter 3 – Test Questions

Your page rank:

Total word count: 1066
Pages: 4

Calculate the Price

- -
275 words
Looking for Expert Opinion?
Let us have a look at your work and suggest how to improve it!
Get a Consultant

Which statement is consistent with the law of demand?

– A reduction in market price will lead to a decrease in quantity demanded.

– A reduction in market price will lead to an increase in quantity demanded.

– An increase in market price will lead to an increase in quantity demanded.

– At a zero price quantity demanded will be equal to zero.

– A reduction in market price will lead to an increase in quantity demanded.

Which of the following characteristics lead to a downward-sloping demand curve? Select all that apply.

– Increasing opportunity costs

– Increasing marginal benefit

– Diminishing preferences for a particular good

– A decline in the price of a related good

– An increase in purchasing power as market price decreases

– Diminishing marginal utility

– An increase in purchasing power as market price decreases – Diminishing marginal utility

How is a market demand curve derived from individual demand curves?

– Add up quantities demanded by all individual consumers for each price

– Calculate the average quantity demanded among all consumers

– Add up prices paid for each unit demanded by individuals

– Use the largest quantity demanded among all consumers for each price

– Add up quantities demanded by all individual consumers for each price

Which statement is consistent with the law of supply?

– An increase in market price will lead to an increase in quantity supplied.

– At a zero price quantity supplied will be infinite.

– A reduction in market price will lead to an increase in quantity supplied.

– An increase in market price will lead to a decrease in quantity supplied.

– An increase in market price will lead to an increase in quantity supplied.

Which of the following characteristics leads to a upward-sloping supply curve? Select all that apply.

– Increasing opportunity costs

– Increasing marginal costs

– Diminishing marginal utility

– A decrease in resource prices

– An increase in resource prices

– Increasing labor productivity

– Increasing opportunity costs – Increasing marginal costs

How do you derive a market supply curve from individual supply curves?

– Calculate the average quantity supplied among all producers

– Add up quantities supplied by all individual producers for each price

– Add up prices paid for each unit supplied by producers

– Use the largest quantity supplied among all producers for each price

– Add up quantities supplied by all individual producers for each price

In 2001 an outbreak of hoof-and-mouth disease in Europe led to the burning of millions of cattle carcasses. What impact do you think this had on the following?

– increase
– decrease

a. The supply of cattle hides:

b. Hide prices:

c. The supply of leather goods:

d. The price of leather goods:

a.) decrease b.) increase c.) decrease d.) increase

What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500?

– increase
– decrease
– no change
– cannot be determined

a. Small automobiles become more fashionable: .

b. The price of large automobiles rises (with the price of small autos remaining the same): .

c. Income declines and small autos are an inferior good: .

d. Consumers anticipate that the price of small autos will greatly come down in the near future: .

e. The price of gasoline substantially drops: .

a.) – increase b.) – increase c.) – increase d.) – decrease e.) – cannot be determined

What effect will each of the following have on the supply of auto tires? (Keeping all else constant)

– Increase
– Decrease
– No change

a. A technological advance in the methods of producing tires: .

b. A decline in the number of firms in the tire industry: .

c. An increase in the prices of rubber used in the production of tires: .

d. The expectation that the equilibrium price of auto tires will be lower in the future than currently: .

e. A decline in the price of large tires used for semi trucks and earth-hauling rigs, a substitute in production. (with no change in the price of auto tires): .

f. The levying of a per-unit tax on each auto tire sold: .

g. The granting of a 50-cent-per-unit subsidy for each auto tire produced: .

a.) – Increase b.) – Decrease c.) – Decrease d.) – Increase e.) – Increase f.) – Decrease g.) – Increase

Suppose that in the market for computer memory chips, the equilibrium price is $50 per chip. If the current price is $55 per chip, then there will be ________ of memory chips.

– surplus
– shortage
– equilibrium quantity

– surplus

A price ceiling will result in a shortage only if the ceiling price is _________ the equilibrium price.

– less than
– greater than
– equal to

– less than

How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity increase or decrease, or are the answers indeterminate because they depend on the magnitudes of the shifts?

– Increases
– Decreases
– Indeterminate

a. Supply decreases and demand is constant.

Price:
Quantity

b. Demand decreases and supply is constant.

Price:
Quantity:

c. Supply increases and demand is constant.

Price:
Quantity:

d. Demand increases and supply increases.

Price:
Quantity:

e. Demand increases and supply is constant.

Price:
Quantity:

f. Supply increases and demand decreases.

Price:
Quantity:

g. Demand increases and supply decreases.

Price:
Quantity:

h. Demand decreases and supply decreases.

Price:
Quantity:

a.) – Increases – Decreases b.) – Decreases – Decreases c.) – Decreases – Increases d.) – Indeterminate – Increases e.) – Increases – Increases f.) – Decreases – Indeterminate g.) – Increases – Indeterminate h.) – Indeterminate – Decreases

Will the equilibrium price of orange juice increase or decrease in each of the following situations?

– increase
– decrease
– indeterminate

a. A medical study reporting that orange juice reduces cancer is released at the same time that a freak storm destroys half of the orange crop in Florida: ___________ .

b. The prices of all beverages except orange juice fall by half while unexpectedly perfect weather in Florida results in an orange crop that is 20 percent larger than normal:__________ .

a.) – increase b.) – decrease

A price ceiling will result in a shortage only if the ceiling price is _________ the equilibrium price.

– greater than
– less than
– faster than
– equal to

– less than

Share This
Flashcard

More flashcards like this

NCLEX 10000 Integumentary Disorders

When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? a) ...

Read more

NCLEX 300-NEURO

A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. I can’t do anything without ...

Read more

NASM Flashcards

Which of the following is the process of getting oxygen from the environment to the tissues of the body? Diffusion ...

Read more

Unfinished tasks keep piling up?

Let us complete them for you. Quickly and professionally.

Check Price

Successful message
sending