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| 1 | |
Which best expresses the law of demand? |
| | A) | A higher price reduces demand |
| | B) | A lower price reduces demand |
| | C) | A higher price reduces quantity demanded |
| | D) | A lower price shifts the demand curve to the right |
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| 2 | |
Goods X and Y are complements while goods X and Z are substitutes. If the supply of good X increases: |
| | A) | the demand for both Y and Z will increase |
| | B) | the demand for Y will increase while the demand for Z will decrease |
| | C) | the demand for Y will decrease while the demand for Z will increase |
| | D) | the demand for both Y and Z will decrease |
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| 3 | |
Which will not cause supply to increase? |
| | A) | An increase in demand |
| | B) | A reduction in input prices |
| | C) | An improvement in technology |
| | D) | A lower price expected in the future |
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| 4 | |
If the quantity supplied of oranges exceeds the quantity demanded: |
| | A) | there is a shortage of oranges |
| | B) | market forces will cause the price to fall unless there is an effective price floor |
| | C) | market forces will cause the price to rise unless there is an effective price ceiling |
| | D) | the market is in equilibrium |
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| 5 | |
The following data show the supply and demand schedule for a competitively produced good.
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Refer to the above data. At the equilibrium price, the quantity exchanged in this market will be: |
| | A) | 190 |
| | B) | 220 |
| | C) | 245 |
| | D) | 250 |
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| 6 | |
The following data show the supply and demand schedule for a competitively produced good.
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Refer to the above data. Suppose government were to fix the price at $14 As a result: |
| | A) | there would be a surplus of 65 units |
| | B) | there would be a shortage of 65 units |
| | C) | demand would increase |
| | D) | Supply would increase |
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| 7 | |
Over the last several months, the price of a particular good has fallen while its quantity exchanged has increased. This could have been caused by: |
| | A) | a simultaneous increase in demand and decrease in supply |
| | B) | an increase in supply |
| | C) | an increase in demand |
| | D) | a decrease in demand |
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| 8 | |
Consider the market for good X. A simultaneous drop in the price of a production input and an increase in the price of substitute good Y will necessarily: |
| | A) | increase the equilibrium price of X |
| | B) | decrease the equilibrium price of X |
| | C) | increase the equilibrium quantity of X |
| | D) | decrease the equilibrium quantity of X |
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| 9 | |
An improvement in production technology for a specific good will cause a(n): |
| | A) | increase in demand and an increase in price |
| | B) | increase in demand and a drop in price |
| | C) | drop in price and increase in quantity demanded |
| | D) | increase in supply and an increase in price |
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| 10 | |
When movie ticket prices increase, families tend to spend less time watching movies and more time at home watching videos instead. This best reflects: |
| | A) | diminishing marginal utility |
| | B) | the income effect |
| | C) | the rationing function of markets |
| | D) | the substitution effect |
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