Economics 002 - Principles of Economics II » Fall 2020 » Week 2 Quiz

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Question #1
The nature of demand indicates that as the price of a good increases:
A.   buyers desire to purchase less of it.
B.   more of it is produced.
C.   more of it is desired.
D.   suppliers wish to sell less of it.
Question #2
If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:
A.   Goods X and Y are complement goods.
B.   Goods X and Y are normal goods.
C.   Goods X and Y are substitute goods.
D.   the price of Good Y will increase.
Question #3
When economists talk about supply, they are referring to a relationship between price received for each unit sold and the _________________.
A.   demand schedule
B.   demand curve
C.   market price
D.   quantity supplied
Question #4
The downward slope of the demand curve again illustrates the pattern that as _____________ rises, _________________ decreases.
A.   quantity supplied, quantity demanded
B.   price, quantity demanded
C.   quantity demanded, price
D.   price, quantity supplied
Question #5
The ____________ is the quantity where quantity demanded and quantity supplied are equal at a certain price.
A.   supply schedule
B.   quantity demanded
C.   demand schedule
D.   equilibrium quantity
Question #6
If new manufacturers enter the computer industry, then (ceteris paribus):
A.   the supply curve shifts to the left.
B.   some established manufacturers must exit the industry.
C.   the demand curve shifts to the left.
D.   the supply curve shifts to the right.
Question #7
A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the __________________ .
A.   supply curve to the right
B.   demand curve to the left
C.   supply curve to the left
D.   demand curve to the right
Question #8
A change in price of a good or service typically causes ___________________________ for that specific good or service.
A.   a new equilibrium price
B.   a change along the supply curve
C.   a decreased demand
D.   the supply curve to shift
Question #9
The demand curve for a typical good has a(n):
A.   inverse slope because as the price goes up, the good has more profitability.
B.   negative slope because some consumers switch to other goods as the price rises.
C.   negative slope because the good has less "snob appeal" as its price falls.
D.   negative slope because consumer incomes fall as the price of the good rises.
Question #10
______________ are enacted when discontented sellers, feeling that prices are too low, appeal to legislators to keep prices from falling.
A.   Rent controls
B.   Price floors
C.   Subsidies
D.   Price ceilings
Question #11
The term "ceteris paribus" means that:
A.   what is true for the individual is not necessarily true for the whole.
B.   everything is variable.
C.   all variables except those specified are constant.
D.   no one knows which variables will change and which will remain constant.
Question #12
When quantity demanded decreases in response to a change in price:
A.   there is a movement down along the demand curve.
B.   the demand curve shifts to the right.
C.   there is a movement up along the demand curve.
D.   the demand curve shifts to the left.
Question #13
According to the law of supply:
A.   there is a direct relationship between price and quantity demanded.
B.   there is a direct relationship between price and the quantity supplied.
C.   there is an inverse relationship between price and quantity demanded.
D.   there is an inverse relationship between price and the quantity supplied.
Question #14
Which of the following would reduce the supply of microcomputers?
A.   higher wage rates for the workers that assemble the computers
B.   a reduction in the price of computers.
C.   a reduction in the price of computer chips used to produce the computers
D.   a technological improvement that lowers the cost of producing the computers
Question #15
After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is:
A.   a movement down along the demand curve for beef to the right.
B.   a shift of the demand curve for beef to the left.
C.   no change; only the supply curve for beef is likely to be affected.
D.   a shift of the demand curve for beef to the right.
Question #16
A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and ____________, shown on the horizontal axis.
A.   quantity
B.   quantity demanded
C.   demand
D.   quantity supplied
Question #17
The ___________ is the only price where quantity demanded is equal to quantity supplied.
A.   horizontal axis intercept
B.   market price
C.   equilibrium price
D.   vertical axis intercept

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