Question

1. As the owner of a business, Talia has allowed her employees to do their work on one computer screen while watching movies on a second computer screen. She has noticed, however, that her employees are distracted by being able to watch movies while at work. How would an economist describe this situation?

a. As people watch movies, they become less productive and efficient and there is a rightward shift of the supply curve.

b. As people watch movies, they become less productive and efficient and there is a rightward shift of and movement along the supply curve.

c. As people watch movies, they become less productive and efficient and there is a leftward shift of the supply curve.

d. As people watch movies, they become less productive and efficient and there is a rightward movement along the supply curve.

e. As people watch movies, they become less productive and efficient and there is a leftward movement along the supply curve.

2. A shortage occurs whenever

a. the price is above the equilibrium quantity.

b. the government places a nonbinding price ceiling.

c. the quantity supplied is less than the quantity demanded.

d. the quantity supplied is greater than the quantity demanded.

e. the government places a binding price floor

3. For a market to be competitive

a. sellers must produce goods and services that are different from their competitors.

b. sellers should have substantial pricing power.

c. all you need are many buyers and many sellers.

d. each buyer and seller is small, relative to the whole market; no single decision maker has any influence over the market price.

e. the price must be a fair price.

Answer 1

1. Ans: c ) As people watch movies, they become less productive and efficient and there is a leftward shift of the supply curve.

Explanation:

When the workers become less productive and less efficient then they will produce less output or product. As a result the supply curve of the product will shift leftward.

2. Ans: c ) The quantity supplied is less than the quantity demanded.

Explanation:

A shortage occurs when the Q_S  is less than Q_D  at a particular price.

3. Ans: d ) each buyer and seller is small, relative to the whole market; no single decision maker has any influence over the market price.

Explanation:

Under perfect competition , firm is the price taker whereas the industry is the price maker. This is an important characteristic of perfect competitive market structure.