Question

12) When quantity supplied equals quantity demanded:

Multiple Choice

a)the market forces push the economy to produce more.

b)equilibrium is reached.

c)the market forces push the economy to produce less.

d)the market forces cease to function.

13)Consider a market that is in equilibrium. If it experiences both an increase in demand and an increase in supply, what can be said of the new equilibrium? The equilibrium:

Multiple Choice

a)quantity will definitely rise, while the equilibrium price cannot be predicted.

b)price and quantity will both fall.

c)price will definitely rise, while the equilibrium quantity cannot be predicted.

d)price and quantity will both rise.

14)The buyers and sellers who trade a particular good or service make up what we call a:

Multiple Choice

a)mall.

b)negotiators.

c)market.

d)store.

17) A drought causes most fruit crops to fail, decreasing the amount of available fruit. The fruitcake market would see:

Multiple Choice

a)an increase in the supply of fruitcake.

b)a decrease in the supply of fruitcake.

c)no change in the supply of fruitcake, but the demand would increase.

d)no change in the supply of fruitcake, but the demand would decrease.

18)

Tom was out shopping for a sweater and learned that they will all go on sale tomorrow. We would expect Tom's demand for sweaters today to:

Multiple Choice

a)shift to the right.

b)shift to the left.

c)increase.

d)move down along his demand curve.

19)Tom was out shopping for a sweater and learned that they will all go on sale tomorrow. We would expect Tom's demand for sweaters today to:

Multiple Choice

a)shift to the right.

b)shift to the left.

20)A supply curve is a:

Multiple Choice

a)graph depicting various price-quantity combinations of multiple goods.

b)table that displays various price-quantity combinations of a good or service.

c)graph that shows the quantities of a particular good or service that producers will sell at one price.

d)a graphical representation that visually displays the supply schedule.

21)If producers incorrectly set the price of their product too high a:

Multiple Choice

a)shortage will result and consumers will bid the price up to equilibrium.

b)surplus will result and excess goods in inventory will signal the producers to restrict output until sales increase.

c)surplus will result and excess goods in inventory will signal to producers to lower their prices.

d) shortage will result and consumers will bid the price down to equilibrium.

22)Suppose a decrease in price increases quantity demanded from 8 to 12. Using the mid-point formula, the percentage change in quantity demanded is:

Multiple Choice

a)0.1, and is elastic.

b)0.40 = 40 percent.

c)0.50 = 50 percent.

d)40 = 400 percent.

23)Suppose when the price of a can of tuna is $1.30, the quantity demanded is 9, and when the price is $1.50, the quantity demanded is 7. Using the mid-point method, the price elasticity of demand is:

Multiple Choice

a)29 percent

b)1.75

c)0.57

d)57 percent

24)If the price of a good increases by 10 percent, its quantity demanded drops by 50 percent. The price elasticity of demand is:

Multiple Choice

a)2.0

b)1.0

c)5.0

d)0.2

25)If the cross-price elasticity of two goods is 0.25, then we know that these goods are:

Multiple Choice

a)substitutes because their cross-price elasticity is greater than zero.

b)substitutes because their cross-price elasticity is less than 1.

c)complements because their cross-price elasticity is greater than zero.

d)complements because their cross-price elasticity is less than 1.

Answer 1