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31 Cards in this Set
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A demand curve for widgets shows: |
a. how people’s spending patterns change as their income changes. b. that people spend more money on widgets as the price of widgets increases. c. the quantity of widgets that would be purchased per unit of time at each alternative price, holding other factors influencing demand fixed. d. that firms are willing to supply more output, per unit of time, as prices increase. |
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As the price of airline tickets increases, the: |
a. demand for airline tickets increases. b. supply of airline tickets decreases. c. quantity of tickets demanded decreases. d. quantity of tickets supplied decreases. |
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The law of downward-sloping demand holds that: |
a. a surplus of goods will cause price to fall. b. people normally buy more of a good as their incomes rise. c. the quantity of a good that consumers willingly purchase increases as the price of the good falls. d. the quantity of a good purchased will decrease as it goes out of style or is replaced by something of better quality |
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A patient must purchase some exact quantity of a particular drug (no less, no more) and will pay anyprice in order to obtain it. Which of the diagrams best illustrates this demand curve? |
a. (a) b. (b) I LINE c. (c) d. (d) |
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The government declares that it is prepared to purchase any and all gold supplied to it by domesticgold mines at a price of $410 an ounce. Which of the diagrams best illustrates this demand curve? |
a. (a) -- LINE b. (b) c. (c) d. (d) |
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An increase in consumers’ money incomes prompts them to demand a greater quantity of good X atany price. Which of the diagrams best illustrates this demand curve? |
a. (a) b. (b) c. (c) \\ LINE d. (d) |
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I can buy any amount of sugar in my local supermarket at a fixed price of 40 cents per pound. Nomatter how much I buy, I always pay the same price per pound. Which of the diagrams best illustratesthis supply curve? |
a. (a) I LINE b. (b) c. (c) d. (d) |
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Any of the following could cause an increase in the demand for Wheaties except: |
a. a decrease in the price of wheat used to produce cereal. b. a new report from the Surgeon General suggesting that wheat helps to cure sunburns. c. a picture of a popular sports figure, such as Michael Phelps, on the Wheaties box. d. an increase in the price of a competing cereal, such as Cheerios. |
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Suppose that the demand curve for commodity X shifts to the left. One reasonable explanation for thisshift would be: |
a. the supply of X has decreased for some reason. b. the price of X has increased, so people have decided to buy less of it than they did before. c. consumer tastes have shifted in favor of this commodity, and they want to buy more of it than they did before at any given price. d. the price of X has fallen, so people have decided to buy more of it than they did before. e. none of these events. (One and none) |
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Four of the five events described below might reasonably explain why the demand for beef has shiftedto a new position. Which one is not a suitable explanation? |
a. The price of some good which consumers regard as a substitute for beef has risen. b. The price of beef has fallen. c. Money incomes of beef consumers have increased. d. A widespread advertising campaign is undertaken by the producers of beef. e. There is a change in people’s tastes with respect to beef. |
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When applied to the demand for commodity X the phrase “other things equal,” or “other thingsconstant,” means that: |
a. the price of X is held constant. b. both buyer incomes and the price of X are held constant. c. buyer incomes, tastes, and the price of X are held constant. d. all factors that might influence the demand for X including the price of X are held constant. e. none of the above (other and none) |
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If IBM and Compaq computers are substitutes, a decrease in the price of IBM PCs will cause: |
a. a decrease in the demand for Compaq computers. b. an increase in the demand for IBM computers. c. an increase in the supply of IBM computers. d. an increase in the supply of Compaq computers. |
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The demand curve for a normal good will shift to the right if: |
a. prices increase. b. income increases. c. cost of production increases. d. none of the above. |
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The supply curve describes: |
a. an inverse relationship between price and quantity supplied. b. a direct relationship between income and quantity supplied. c. a cyclical relationship between consumption and savings. d. a direct relationship between price and quantity supplied. |
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An increase in the cost of materials needed to produce snow skis causes the following change in thesnow ski market: |
a. the demand curve shifts to the right. b. the supply curve shifts to the left. \<--\ c. both the demand and supply curves shift to the left. d. neither curve shifts |
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Consider the producer who makes leather shoes and leather purses. An increase in the price of leathershoes would cause: |
a. a decrease in the supply of leather purses. \ c. a shift in the demand curve for leather shoes. d. the supply curve for leather shoes and the supply curve for purses to shift to the left. |
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The demand for snowboards has increased recently as more people have taken up the sport. This willcause the supply curve for snowboards to: |
a. shift to the left. b. shift to the right. c. remain the same. d. decrease next year. |
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Supply curves are typically “positively sloped.” The meaning conveyed by any such curve is that: |
a. any increase in costs of production will result in a movement up along the supply curve. b. the lower the price, the larger the supply that consumers are prepared to buy. c. the higher the price, the larger the quantity suppliers will wish to sell. d. the larger the quantity suppliers have to sell, the lower the price they will have to quote in order to dispose of it. e. none of the above |
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Which of the following will not help to determine the position of the supply curve? |
a. Technology b. Resource costs. c. Consumer income. d. Government taxes. |
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An increase in the supply of commodity X for any given price of X could be caused by: |
a. an increase in price of X b. an increase in the prices of factors of production important to this commodity. c. a decrease in the prices of factors of production important to this commodity. d. none of the above. |
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Equilibrium in a market indicates: |
a. the price at which quantity supplied equals quantity demanded. b. that every buyer who wants to buy can buy at the equilibrium price, and every seller who wants to sell can sell at the equilibrium price. c. there is no tendency for price to change. d. all of the above. e. none of the above. |
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In prosperous times, both the equilibrium price and the quantity of some commodity X may go upsimultaneously. Such a situation: |
a. is one of the few recognized exceptions to the law of downward-sloping demand. b. is precisely what the law of downward-sloping demand says is to be expected. c. is the consequence of a demand curve running from southwest to northeast. d. cannot be explained by means of ordinary supply-curve and demand-curve analysis. e. is caused by a rightward-shifting demand curve and a stable supply curve. /-->/ |
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Beef supplies are sharply reduced because of drought in the beef-raising states, and consumers turn topork as a substitute for beef because they believe there are health benefits. In the beef market, these twophenomena would be described in terms of supply and demand as: |
a. a leftward shift in the demand curve. b. a leftward shift in the supply curve. c. a rightward shift in the demand curve. d. a rightward shift in the supply curve. e. both the supply curve and the demand curve will shift to the left. |
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Which alternative in question 23 would be correct with respect to the events described had thatquestion asked about the pork market? |
a. b. c. d. e. |
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Let the initial price of a good be $5. If buyers wish to purchase 4000 units per week at that price whilesellers wish to sell 5000 units per week, then: |
a. price will tend to increase in the future. b. firm output will tend to increase in the future. c. price and output will tend to remain the same in the future. d. price will tend to decrease in the future. e. something is wrong—this could not happen. |
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This winter has been unusually cold and snowy in the northeast, with a record number of snowstorms.The new equilibrium in the market for home heating oil is best represented by point: |
a. A. b. B. c. C. /-->/ d. D. |
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At the old equilibrium price, there now exists a(n): |
a. shortage. b. surplus. c. equilibrium. d. excess supply |
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The equilibrium price in this market is: |
a. $100. b. $200. c. $300. d. $400. |
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The equilibrium quantity exchanged in this market is: |
a. 2000 bikes. b. 3000 bikes. c. 4000 bikes. d. 5000 bikes. |
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“Doc Martens” shoes and boots are rather popular among young adults. This fad has had a big impacton the market for Reebok sneakers, a substitute for Doc Martens. We would expect the equilibrium: |
a. price of Reeboks to fall and the equilibrium quantity exchanged to increase. b. price and quantity of Reeboks exchanged to increase. c. price and quantity of Reeboks exchanged to decrease. (mind your Ps and Qs, R) d. price of Reeboks to increase and the equilibrium quantity exchanged to decrease |
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If consumer income increases for a normal good, the equilibrium price of that commodity will: |
a. increase. b. decrease. c. stay the same. d. not enough information to answer the question |
