Question 1

Consider two goods,X and Y.If the price of Y increases and,as a consequence,the demand curve for X shifts to the left,then:

Accepted Answer

A) X and Y are substitutes. 
B) X and Y are complements. 
C) X and Y are unrelated. 
D) X and Y are inferior goods. 
A) X and Y are substitutes. 
B) X and Y are complements. 
C) X and Y are unrelated. 
D) X and Y are inferior goods.

Question 2

Determine the price elasticity of demand for commodity X,if a 15% increase in its price:
a.has no impact on its total expenditure.

Accepted Answer

If the 15% increase in price i

Question 3

Let the market demand for rye bread be given by Q = 500 + I - 250Prye + 400Pwheat,where Q is monthly demand in number of loaves,I is average monthly income in dollars,Prye is the price of a loaf of rye bread,and Pwheat is the price of a loaf of wheat bread.If I = $1,000,Prye = $2,and Pwheat = $3,calculate the following (based on 10% changes in denominators):

A)the arc price elasticity of demand for rye bread

Accepted Answer

Q = 500 + 1,000 - 250 (2)+ 400(3)= 2,200

Question 4

The low availability of houses on rent cause potential tenants to incur the cost of waiting.The first-come first-serve basis used by owners while letting out houses under a rent control is a form of:

Accepted Answer

A) price rationing. 
B) black marketing. 
C) nonprice rationing. 
D) predatory pricing. 
A) price rationing. 
B) black marketing. 
C) nonprice rationing. 
D) predatory pricing.

Question 5

If income of an individual increases from $20,000 to $30,000 and the quantity of X demanded _____,then X is a(n)_____

Accepted Answer

A) increases;normal good 
B) increases;inferior good 
C) decreases;normal good 
D) decreases;luxury good 
A) increases;normal good 
B) increases;inferior good 
C) decreases;normal good 
D) decreases;luxury good

Question 6

Which of the following is true of a legislated price ceiling?

Accepted Answer

A) It is illegal to charge a price higher than the ceiling. 
B) It is illegal to sell commodities on which ceiling has been imposed. 
C) It is illegal to charge a price lower than the ceiling. 
D) It is illegal to buy commodities on which ceiling has been imposed. 
A) It is illegal to charge a price higher than the ceiling. 
B) It is illegal to sell commodities on which ceiling has been imposed. 
C) It is illegal to charge a price lower than the ceiling. 
D) It is illegal to buy commodities on which ceiling has been imposed.

Question 7

For which one of the following goods is the long-run elasticity of demand greatest?

Accepted Answer

A) Cigarettes 
B) Chevrolet automobiles 
C) Beer 
D) Water 
A) Cigarettes 
B) Chevrolet automobiles 
C) Beer 
D) Water

Question 8

The state of Florida enacted anti-gouging legislation that imposes criminal penalties on individuals or firms that charge more for their goods or services after a disaster,like a hurricane or tornado,than they charged just prior to the disaster.Each of the following represents the social loss of this legislation,except:

Accepted Answer

A) people would have to search longer to find available scarce resources like ice,plywood,and hotel rooms. 
B) people would spend more time waiting in lines to acquire some of the scarce goods like ice,plywood,and hotel rooms. 
C) more people who have alternatives to consuming the scarce goods like ice,plywood,and hotel rooms at the higher prices would now consume them. 
D) fewer people will demand the scarce goods like ice,plywood,and hotel rooms which will reduce the producer surplus 
A) people would have to search longer to find available scarce resources like ice,plywood,and hotel rooms. 
B) people would spend more time waiting in lines to acquire some of the scarce goods like ice,plywood,and hotel rooms. 
C) more people who have alternatives to consuming the scarce goods like ice,plywood,and hotel rooms at the higher prices would now consume them. 
D) fewer people will demand the scarce goods like ice,plywood,and hotel rooms which will reduce the producer surplus

Question 9

-Refer to Figure 2-1.Assume that a price ceiling of $2 is imposed in this market,what will be the new quantity sold in this market?

Accepted Answer

A) 25,000 
B) 35,000 
C) 45,000 
D) 60,000 
A) 25,000 
B) 35,000 
C) 45,000 
D) 60,000

Question 10

If an increase in the price of oil from $20 to $24 per barrel induces firms to increase production from 1 million to 1.6 million barrels,then the elasticity of supply is:

Accepted Answer

A) 1.54. 
B) 3. 
C) 2.25. 
D) 2. 
A) 1.54. 
B) 3. 
C) 2.25. 
D) 2.

Question 11

An excess demand for a good or service tends to cause:

Accepted Answer

A) an increase in price over time. 
B) a decrease in price over time. 
C) an offsetting excess supply later. 
D) an immediate rightward shift in supply. 
A) an increase in price over time. 
B) a decrease in price over time. 
C) an offsetting excess supply later. 
D) an immediate rightward shift in supply.

Question 12

Each row and column heading describes a shock to a market initially in equilibrium.Fill in the table indicating whether the new equilibrium price and quantity will increase,decrease,or not change.

Accepted Answer

The answer of Each row and column heading describes a...

Question 13

The law of demand states that people:

Accepted Answer

A) prefer high-quality goods to low-quality goods. 
B) buy larger quantities of a good at lower prices. 
C) prefer more to less. 
D) are willing to pay a higher price only for goods they need. 
A) prefer high-quality goods to low-quality goods. 
B) buy larger quantities of a good at lower prices. 
C) prefer more to less. 
D) are willing to pay a higher price only for goods they need.

Question 14

If both supply and demand for a good increase at the same time,which of the following must also increase?

Accepted Answer

A) The equilibrium price 
B) The use of substitutes 
C) The equilibrium quantity 
D) The price of substitute goods 
A) The equilibrium price 
B) The use of substitutes 
C) The equilibrium quantity 
D) The price of substitute goods

Consider two goods,X and Y.If the price of Y increases and,as a consequence,the demand curve for X shifts to the left,then:

Determine the price elasticity of demand for commodity X,if a 15% increase in its price: a.has no impact on its total expenditure.

The low availability of houses on rent cause potential tenants to incur the cost of waiting.The first-come first-serve basis used by owners while letting out houses under a rent control is a form of:

If income of an individual increases from $20,000 to $30,000 and the quantity of X demanded _,then X is a(n)_

Which of the following is true of a legislated price ceiling?

For which one of the following goods is the long-run elasticity of demand greatest?

-Refer to Figure 2-1.Assume that a price ceiling of $2 is imposed in this market,what will be the new quantity sold in this market?

If an increase in the price of oil from $20 to $24 per barrel induces firms to increase production from 1 million to 1.6 million barrels,then the elasticity of supply is:

An excess demand for a good or service tends to cause:

Each row and column heading describes a shock to a market initially in equilibrium.Fill in the table indicating whether the new equilibrium price and quantity will increase,decrease,or not change.

The law of demand states that people:

If both supply and demand for a good increase at the same time,which of the following must also increase?

An Introduction to Microeconomics

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters

Exam 2: Supply and Demand

Consider two goods,X and Y.If the price of Y increases and,as a consequence,the demand curve for X shifts to the left,then:

Determine the price elasticity of demand for commodity X,if a 15% increase in its price: a.has no impact on its total expenditure.

The low availability of houses on rent cause potential tenants to incur the cost of waiting.The first-come first-serve basis used by owners while letting out houses under a rent control is a form of:

If income of an individual increases from $20,000 to $30,000 and the quantity of X demanded _____,then X is a(n)_____

Which of the following is true of a legislated price ceiling?

For which one of the following goods is the long-run elasticity of demand greatest?

-Refer to Figure 2-1.Assume that a price ceiling of $2 is imposed in this market,what will be the new quantity sold in this market?

If an increase in the price of oil from $20 to $24 per barrel induces firms to increase production from 1 million to 1.6 million barrels,then the elasticity of supply is:

An excess demand for a good or service tends to cause:

Each row and column heading describes a shock to a market initially in equilibrium.Fill in the table indicating whether the new equilibrium price and quantity will increase,decrease,or not change.

The law of demand states that people:

If both supply and demand for a good increase at the same time,which of the following must also increase?

An Introduction to Microeconomics

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters

If income of an individual increases from $20,000 to $30,000 and the quantity of X demanded _,then X is a(n)_