Question 1

Along a linear demand curve,price elasticity of demand:

Accepted Answer

A) increases as price falls. 
B) is independent of price. 
C) decreases as price falls. 
D) remains unchanged. 
A) increases as price falls. 
B) is independent of price. 
C) decreases as price falls. 
D) remains unchanged.

Question 2

Which of the following is a disadvantage of rent control to the tenants?

Accepted Answer

A) Fluctuations in the rental rates 
B) Predominance of a black market 
C) Low demand for houses 
D) Poor quality of houses 
A) Fluctuations in the rental rates 
B) Predominance of a black market 
C) Low demand for houses 
D) Poor quality of houses

Question 3

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

Question 4

An increase in supply,other things equal,will cause the:

Accepted Answer

A) equilibrium price to fall and the equilibrium quantity to rise. 
B) equilibrium price and quantity to fall. 
C) equilibrium price and quantity to rise. 
D) equilibrium price to rise and the equilibrium quantity to fall. 
A) equilibrium price to fall and the equilibrium quantity to rise. 
B) equilibrium price and quantity to fall. 
C) equilibrium price and quantity to rise. 
D) equilibrium price to rise and the equilibrium quantity to fall.

Question 5

Refer to Figure 2-1.What is the equilibrium price and quantity in this market?

Accepted Answer

A) P=$2 and Q=35,000 
B) P=$4 and Q=35,000 
C) P=$6 and Q=25,000 
D) P=$2 and Q=45,000 
A) P=$2 and Q=35,000 
B) P=$4 and Q=35,000 
C) P=$6 and Q=25,000 
D) P=$2 and Q=45,000

Question 6

Which of the following is not likely to result from a price ceiling that is below the equilibrium price?

Accepted Answer

A) Some form of non-price rationing 
B) A shortage that market forces cannot be expected to eliminate 
C) Improvements in product quality 
D) Waiting in lines to obtain some of the good 
A) Some form of non-price rationing 
B) A shortage that market forces cannot be expected to eliminate 
C) Improvements in product quality 
D) Waiting in lines to obtain some of the good

Question 7

At every point on an individual's demand curve,the height to the demand curve measures:

Accepted Answer

A) the quantity demanded of the good. 
B) the marginal benefit of the good to the consumer. 
C) the real income of the consumer. 
D) the consumer surplus. 
A) the quantity demanded of the good. 
B) the marginal benefit of the good to the consumer. 
C) the real income of the consumer. 
D) the consumer surplus.

Question 8

An increase in quantity supplied occurs when:

Accepted Answer

A) there is technological advance. 
B) the costs of production fall. 
C) the price of the good increases. 
D) the price of the good falls. 
A) there is technological advance. 
B) the costs of production fall. 
C) the price of the good increases. 
D) the price of the good falls.

Question 9

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 10

Which of the following is likely to shift the demand for chocolates to the left?

Accepted Answer

A) An increase in the price of cocoa used to make chocolates 
B) Medical reports suggesting increased risk of memory loss among the aged due to high chocolate consumption 
C) A decrease in the price of chocolates 
D) The introduction of minimum wages by the government in an attempt to improve the average wage level in the economy and alleviate poverty 
A) An increase in the price of cocoa used to make chocolates 
B) Medical reports suggesting increased risk of memory loss among the aged due to high chocolate consumption 
C) A decrease in the price of chocolates 
D) The introduction of minimum wages by the government in an attempt to improve the average wage level in the economy and alleviate poverty

Question 11

Farmers can benefit from government intervention if:

Accepted Answer

A) price floors for agricultural goods are set above the equilibrium price. 
B) price floors for fertilizers are set above the equilibrium price. 
C) price ceilings on agricultural products are set below the equilibrium price. 
D) price floors for agricultural goods are set below the equilibrium price. 
A) price floors for agricultural goods are set above the equilibrium price. 
B) price floors for fertilizers are set above the equilibrium price. 
C) price ceilings on agricultural products are set below the equilibrium price. 
D) price floors for agricultural goods are set below the equilibrium price.

Question 12

Which one of the following will not cause a change in the demand for gasoline?

Accepted Answer

A) More people deciding to live closer to their workplace 
B) More people purchasing large pickup trucks and sports utility vehicles 
C) New technology that lowers the cost of producing gasoline 
D) Expectations of consumers that the price of gasoline will be significantly greater next week 
A) More people deciding to live closer to their workplace 
B) More people purchasing large pickup trucks and sports utility vehicles 
C) New technology that lowers the cost of producing gasoline 
D) Expectations of consumers that the price of gasoline will be significantly greater next week

Question 13

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 14

An excess demand for a product indicates that:

Accepted Answer

A) the price is below the equilibrium price. 
B) there is a rightward shift in the demand curve. 
C) there will be a downward movement along the supply curve. 
D) the supply curve will shift rightward. 
A) the price is below the equilibrium price. 
B) there is a rightward shift in the demand curve. 
C) there will be a downward movement along the supply curve. 
D) the supply curve will shift rightward.

Question 15

Which one of the following is held constant along a given demand curve?

Accepted Answer

A) The consumers' income 
B) The price of the good the demand curve represents 
C) The cost of producing the good the demand curve represents 
D) The quantity of the good the demand curve represents 
A) The consumers' income 
B) The price of the good the demand curve represents 
C) The cost of producing the good the demand curve represents 
D) The quantity of the good the demand curve represents

Question 16

Identify the black market that can emerge from rent controls.

Accepted Answer

A) Rationing 
B) Subletting 
C) Leasing 
D) Licensing 
A) Rationing 
B) Subletting 
C) Leasing 
D) Licensing

Question 17

When the per-unit cost of producing a commodity is constant,the price elasticity of supply is:

Accepted Answer

A) zero. 
B) infinite. 
C) one. 
D) negative. 
A) zero. 
B) infinite. 
C) one. 
D) negative.

Question 18

If price changes from $4.75 to $5.25 and quantity demanded changes from 1,025 to 975 units,then the price elasticity of demand is approximately:

Accepted Answer

A) 4.0. 
B) 0.5. 
C) 0.25 
D) 2.2. 
A) 4.0. 
B) 0.5. 
C) 0.25 
D) 2.2.

Question 19

A supply curve for a good depicts the:

Accepted Answer

A) maximum quantities sellers are willing to offer for sale at alternative prices. 
B) maximum quantities that can be produced at alternative prices. 
C) quantities sellers will offer as their production costs change. 
D) quantities sellers can legally supply. 
A) maximum quantities sellers are willing to offer for sale at alternative prices. 
B) maximum quantities that can be produced at alternative prices. 
C) quantities sellers will offer as their production costs change. 
D) quantities sellers can legally supply.

Question 20

Compute the income elasticity of the demand for oats,if a 12% decrease in an individual's income increases his demand for oats by 6%.

Accepted Answer

A) -2 
B) 0.4 
C) -0.5 
D) 1.2 
A) -2 
B) 0.4 
C) -0.5 
D) 1.2

Along a linear demand curve,price elasticity of demand:

Which of the following is a disadvantage of rent control to the tenants?

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

An increase in supply,other things equal,will cause the:

Refer to Figure 2-1.What is the equilibrium price and quantity in this market?

Which of the following is not likely to result from a price ceiling that is below the equilibrium price?

At every point on an individual's demand curve,the height to the demand curve measures:

An increase in quantity supplied occurs when:

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

Which of the following is likely to shift the demand for chocolates to the left?

Farmers can benefit from government intervention if:

Which one of the following will not cause a change in the demand for gasoline?

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.

An excess demand for a product indicates that:

Which one of the following is held constant along a given demand curve?

Identify the black market that can emerge from rent controls.

When the per-unit cost of producing a commodity is constant,the price elasticity of supply is:

If price changes from $4.75 to $5.25 and quantity demanded changes from 1,025 to 975 units,then the price elasticity of demand is approximately:

A supply curve for a good depicts the:

Compute the income elasticity of the demand for oats,if a 12% decrease in an individual's income increases his demand for oats by 6%.

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

Along a linear demand curve,price elasticity of demand:

Which of the following is a disadvantage of rent control to the tenants?

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

An increase in supply,other things equal,will cause the:

Refer to Figure 2-1.What is the equilibrium price and quantity in this market?

Which of the following is not likely to result from a price ceiling that is below the equilibrium price?

At every point on an individual's demand curve,the height to the demand curve measures:

An increase in quantity supplied occurs when:

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

Which of the following is likely to shift the demand for chocolates to the left?

Farmers can benefit from government intervention if:

Which one of the following will not cause a change in the demand for gasoline?

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.

An excess demand for a product indicates that:

Which one of the following is held constant along a given demand curve?

Identify the black market that can emerge from rent controls.

When the per-unit cost of producing a commodity is constant,the price elasticity of supply is:

If price changes from $4.75 to $5.25 and quantity demanded changes from 1,025 to 975 units,then the price elasticity of demand is approximately:

A supply curve for a good depicts the:

Compute the income elasticity of the demand for oats,if a 12% decrease in an individual's income increases his demand for oats by 6%.

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