Econ 102 - Principles of Macroeconomics » Winter 2023 » Week 1 Reading Quiz Ch3

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Question #1
The supply of new houses in Houston is best described as
A.   As the price of new houses in Houston fell in 2020, builders built fewer new houses.
B.   The number of new houses built in Houston in 2020.
C.   The quantity of new houses that builders are willing and able to build at various prices in a given period of time.
D.   The number of new houses purchased in Houston in 2020.
Question #2
The market equilibrium for milk in your city can best be described as follows:
A.   The price and quantity at which milk producers will earn the highest profit.
B.   When the demand and supply of milk intersect, at a price where the quantity demanded and supplied of milk are the same
C.   The difference between the quantity demanded for milk and the quantity supplied at the equilibrium price.
D.   When the market is balanced at the price that benefits milk buyers the most.
Question #3
Which of the following events would increase the demand for cruise vacations?
A.   The price of air travelling decreased significantly.
B.   The economy is slowing, unemployment increases and average income falls.
C.   The popularity of cruises rises after a successful marketing campaign.
D.   The price of cruises falls
Question #4
Consider the market for cheese. If the price of milk increases, what will be the consequences?
A.   The supply of cheese would fall.
B.   The demand for cheese would rise.
C.   The demand for cheese would fall.
D.   The supply of cheese would rise.
Question #5
Identify the scenario which corresponds to the graph of a given market below:
A.   The graph represents a decrease in supply and a decrease in equilibrium price and quantity.
B.   The graph represents a decrease in demand and a decrease in equilibrium price and quantity.
C.   The graph represents a decrease in equilibrium quantity demanded because of a price increase.
D.   The graph represents an increase in demand and a decrease in equilibrium price and quantity.
Question #6
Consider a market with an equilibrium price of $10. If the government imposes a price ceiling of $8, other things equal, the result will be as follow:
A.   A surplus will occur because the price ceiling is below the equilibrium price.
B.   A surplus will occur because the price ceiling is above the equilibrium price.
C.   A shortage will occur because the price ceiling is below the equilibrium price.
D.   The price ceiling will not affect the market which will remain at equilibrium.
Question #7
A market is most efficient when
A.   Social or economic surplus is maximized
B.   Producer surplus is greater than social surplus
C.   Consumer surplus is greater than producer surplus
D.   Consumer surplus is equal to producer surplus
Question #8
Consider the market for air travel. If airport fees rise and cause the price of plane tickets to rise,
A.   It will cause airlines to lower the number of flights they offer.
B.   All answers are correct
C.   It will cause consumers to travel less by plane and more by car.
D.   It will cause buyers and sellers in the market to adjust their behavior.
Question #9
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 #10
If new manufacturers enter the computer industry, then (ceteris paribus):
A.   the demand curve shifts to the left.
B.   the supply curve shifts to the right.
C.   the supply curve shifts to the left.
D.   some established manufacturers must exit the industry.
Question #11
Which of the following would reduce the supply of microcomputers?
A.   a reduction in the price of computers.
B.   higher wage rates for the workers that assemble the computers
C.   a technological improvement that lowers the cost of producing the computers
D.   a reduction in the price of computer chips used to produce the computers
Question #12
When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.
A.   there is a population increase
B.   equilibrium is achieved
C.   prices rise
D.   costs of production fall
Question #13
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 consumer incomes fall as the price of the good rises.
C.   negative slope because some consumers switch to other goods as the price rises.
D.   negative slope because the good has less "snob appeal" as its price falls.
Question #14
If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. This is known as ________________.
A.   excess demand
B.   ceteris paribus
C.   a price ceiling
D.   excess supply

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