the horizontal sum of individual demand curves.
  • Productive efficiency refers to:
  • Allocative efficiency involves determining:
  • Price ceilings and price floors:
  • Graphically, the market demand curve is:
One reason that the quantity demanded of a good increases when its price falls is that the:
  • the price of the product itself.
  • lower price increases the real incomes of buyers, enabling them to buy more.
  • increases in the supply of computer memory have exceeded increases in demand.
  • An increase in money income if A is an inferior good
By an "increase in demand," economists mean that:
  • the horizontal sum of individual demand curves.
  • the quantity demanded at each price in a set of prices is greater.
  • a decrease in the price of one will increase the demand for the other.
  • The price of the product for which the demand curve is relevant.
An improvement in production technology will:
  • shift from D2 to D1.
  • quantity demanded to decrease.
  • shift the supply curve to the right.
  • is above the equilibrium level.
With a downsloping demand curve and an upsloping supply curve for a product, an increase in consumer income will
  • a decrease in the price of one will increase the demand for the other.
  • increases in the supply of computer memory have exceeded increases in demand.
  • increase equilibrium price and quantity if the product is a normal good
  • increase the supply of B and increase the demand for C.
Assume that the demand curve for product C is downsloping. If the price of C falls from $2.00 to $1.75:
  • a larger quantity of C will be demanded.
  • a shortage of 40 units would occur.
  • in improvement in production techonology
  • the supply to increase as farmers plant more corn.
The construction of demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:
  • Price C
  • $70
  • Price ceiling
  • price
In relation to column (3), a change from column (5) to column (4) would indicate a(n):
  • in improvement in production techonology
  • a decrease in the price of one will increase the demand for the other.
  • A decrease in supply
  • Price ceiling
In relation to column (3), a change from column (4) to column (5) would most likely be caused by:
  • in improvement in production techonology
  • a larger quantity of C will be demanded.
  • the price of the product itself.
  • lower price increases the real incomes of buyers, enabling them to buy more.
When the price of a product rises, consumers with a given money income shift their purchases to other products whose prices are now relatively lower. This statement describes:
  • the substitution effect.
  • A decrease in supply
  • the price of the product itself.
  • increase the demand for Z
An increase in product price will cause:
  • shift the supply curve to the right.
  • is above the equilibrium level.
  • where the demand and supply curves intersect.
  • quantity demanded to decrease.
The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q.Refer to the given information. The equilibrium price is:
  • the substitution effect.
  • $1.60
  • price
  • $70
A product market is in equilibrium:
  • farmers would not be able to sell all their wheat
  • quantity demanded to decrease.
  • where the demand and supply curves intersect.
  • the horizontal sum of individual demand curves.
A surplus of 160 units would be encountered if the price was:
  • price
  • $1.60
  • Price C
  • $70
The demand for most products varies directly with changes in consumer incomes. Such products are known as:
  • Price floor
  • A decrease in supply
  • normal goods
  • $70
In this market, economists would call a government-set minimum price of $50 a:
  • Price floor
  • The price of the product for which the demand curve is relevant.
  • Price ceiling
  • Price C
Over time, the equilibrium price of a gigabyte of computer memory has fallen while the equilibrium quantity purchased has increased. Based on this we can conclude that:
  • increase equilibrium price and quantity if the product is a normal good
  • increase in the wage rates paid to laborers employed in the production of X.
  • increase equilibrium price and decrease equilibrium quantity.
  • increases in the supply of computer memory have exceeded increases in demand.
Which of the following will cause the demand curve for product A to shift to the left?
  • increase in the wage rates paid to laborers employed in the production of X.
  • A decrease in supply
  • increase equilibrium price and quantity if the product is a normal good
  • An increase in money income if A is an inferior good
Suppose that salsa manufacturers sell 2 million bottles at $3.50 in one year and 3 million bottles at $3 in the next year. Based on this information, we can conclude that the:
  • a shortage of 40 units would occur.
  • increase the demand for Z
  • supply of salsa has increased.
  • the price of the product itself.
A government price support program to aid farmers is best illustrated by:
  • $1.60
  • Price C
  • normal goods
  • The price of the product for which the demand curve is relevant.
Suppose product X is an input in the production of product Y. Product Y in turn is a substitute for product Z. An increase in the price of X can be expected to:
  • a shortage of 40 units would occur.
  • the supply to increase as farmers plant more corn.
  • increase the demand for Z
  • supply of salsa has increased.
In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.Refer to the given information. An increase in the prices of resources used to produce X will:
  • increase the supply of B and increase the demand for C.
  • decrease S, increase P, and decrease Q.
  • increase equilibrium price and decrease equilibrium quantity.
  • a decrease in the price of one will increase the demand for the other.
Assume product A is an input in the production of product B. In turn, product B is a complement to product C. We can expect a decrease in the price of A to:
  • increase equilibrium price and decrease equilibrium quantity.
  • increase the supply of B and increase the demand for C.
  • increase equilibrium price and quantity if the product is a normal good
  • increase the demand for Z
A normal good is one:
  • reselling a ticket at a price above its original purchase price.
  • for which the consumption varies directly with income.
  • farmers would not be able to sell all their wheat
  • refers to the amount of a product that will be purchased at some specific price.
If Z is an inferior good, an increase in money income will shift the:
  • the price of the product itself.
  • demand curve for Z to the left.
  • demand for A will increase and the quantity of B demanded will increase.
  • surplus of 21 units would occur.
Refer to the diagram. A government-set price floor is best illustrated by
  • An increase in money income if A is an inferior good
  • Price floor
  • Used clothing
  • Price C
The term "quantity demanded":
  • consumers want to buy less than producers offer for sale.
  • farmers would not be able to sell all their wheat
  • capacity of a competitive market to equalize quantity demanded and quantity supplied.
  • refers to the amount of a product that will be purchased at some specific price.
College students living off-campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. When they finish school and start careers, their consumption of both goods frequently declines. This suggests that ramen noodles and boxed macaroni and cheese are:
  • normal goods
  • increase the demand for Z
  • Price floor
  • inferior goods.
Suppose that corn prices rise significantly. If farmers expect the price of corn to continue rising relative to other crops, then we would expect:
  • a shortage of 40 units would occur.
  • the supply to increase as farmers plant more corn.
  • increase the demand for Z
  • a larger quantity of C will be demanded.
A decrease in demand is depicted by a:
  • complementary goods.
  • quantity demanded to decrease.
  • A decrease in supply
  • shift from D2 to D1.
If there is a surplus of a product, its price:
  • demand curve for Z to the left.
  • quantity demanded to decrease.
  • is above the equilibrium level.
  • shift the supply curve to the right.
If the price in this market was $4:
  • farmers would not be able to sell all their wheat
  • consumers want to buy less than producers offer for sale.
  • where the demand and supply curves intersect.
  • the horizontal sum of individual demand curves.
The rationing function of prices refers to the:
  • capacity of a competitive market to equalize quantity demanded and quantity supplied.
  • lower price increases the real incomes of buyers, enabling them to buy more.
  • demand for A will increase and the quantity of B demanded will increase.
  • consumers want to buy less than producers offer for sale.
In presenting the idea of a demand curve, economists presume the most important variable in determining the quantity demanded is:
  • in improvement in production techonology
  • the price of the product itself.
  • a shortage of 40 units would occur.
  • The price of the product for which the demand curve is relevant.
which shows demand and supply conditions in the competitive market for product X. If supply is S1 and demand D0, then
  • increase equilibrium price and quantity if the product is a normal good
  • increase equilibrium price and decrease equilibrium quantity.
  • 0F represents a price that would result in a shortage of AC.
  • increase in the wage rates paid to laborers employed in the production of X.
There will be a surplus of a product when:
  • farmers would not be able to sell all their wheat
  • consumers want to buy less than producers offer for sale.
  • capacity of a competitive market to equalize quantity demanded and quantity supplied.
  • price and quantity supplied.
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