Econ 001 - Principles of Microeconomics » Summer 2019 » Quiz 3

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Question #1
A demand curve shows the graphical relationship between quantity demand and
A.   costs.
B.   price.
C.   quantity produced.
Question #2
Complete the following sentence: If people think that the price of televisions will decrease in the near future, that belief may cause a(n)
A.   increase in the price of televisions today.
B.   increase in the supply of televisions today.
C.   decrease in the demand for televisions today.
Question #3
If a decrease in the price of MP3 players decreases the demand for CD players, this means that
A.   MP3 players and CD players are inferior goods.
B.   MP3 players and CD players are normal goods.
C.   MP3 players and CD players are substitutes.
Question #4
The downward slope of a demand curve illustrates the pattern that as ________ rises, ________ decreases.
A.   price : quantity demanded
B.   quantity supplied : quantity demanded
C.   price : quantity supplied
Question #5
Which of the following events can shift the level of demand (demand is the relationship between price and quantity demanded)?
A.   Supply increases or decreases.
B.   Price of the good changes.
C.   Population grows in a particular market area.
Question #6
When quantity demanded increases in response to a change in price
A.   there is a movement from one point to another along the demand curve.
B.   the demand curve shifts to the left.
C.   the demand curve shifts to the right.
Question #7
In a planned economy, government determines the prices for goods and services, and
A.   firms determine what goods to produce to maximize profits.
B.   what goods will be produced.
C.   allows consumers to influence prices based on demand behavior.
Question #8
Which of the following statements describe a competitive market?
A.   There are a large number of buyers and sellers.
B.   Government does not intervene in any way.
C.   The number of sellers is limited to a select few.
Question #9
The following country has characteristics of a command economy?
A.   United States
B.   Australia
C.   China
Question #10
In a planned economy, government determines what can be produced and
A.   what prices will be charged.
B.   allows prices to change depending on market conditions.
C.   firms determined what prices will be charged.
Question #11
In order to deal with a budget deficit, the city of Portland reduces its subsidy of doughnut shops. What happens in the market for doughnuts in Portland?
A.   The equilibrium quantity falls.
B.   The quantity supplied and the quantity demanded both rise.
C.   Doughnut prices rise.
Question #12
The one unique point in which quantity demanded equals quantity supplied is called
A.   equilibrium.
B.   market stability.
C.   supply schedule.
Question #13
If supply falls and demand remains constant, once the market has adjusted to its new equilibrium there will be
A.   fewer transactions, and they will take place at a higher price.
B.   fewer transactions, and they will take place at a lower price.
C.   more transactions, and they will take place at a lower price.
Question #14
Excess supply occurs when the actual price in some market is ________ the equilibrium price.
A.   equal to
B.   below
C.   above
Question #15
Suppose Congress passes legislation that offers subsidies to orange farmers. The impact on the market for orange juice will be a rightward shift of
A.   both the supply and demand curves.
B.   the demand curve.
C.   the supply curve.
Question #16
A supply curve is a graphical illustration of the relationship between price and
A.   quantity demanded.
B.   quantity supplied.
C.   demand.
Question #17
A change in technology that reduces the costs of production will
A.   decrease consumer demand.
B.   increase consumer demand.
C.   shift the supply curve to the right.
Question #18
Which of the following will cause the supply curve to shift to the left?
A.   higher product taxes
B.   a fall in input prices
C.   improved technology
Question #19
Good weather and heavy winter rain increases the supply of agricultural products. This means that at any given price, a higher quantity will be supplied. Conversely, a drought would shift the
A.   demand curve to the right.
B.   supply curve to the right.
C.   supply curve to the left.

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