question

Which of the following would not cause the market supply of cell phones to change?

answer

A reduction in the demand for cell phones causes the price to fall

question

Which of the following is a determinant of supply?

answer

prices of the factors of production

question

Ceteris paribus, according to the law of supply, if the price of product Z increases from $6 to $8, then the

answer

Quantity supplied of Z will increase

question

A movement along the supply curve is the same as:

answer

change in the quantity supplied

question

Ceteris paribus, which of the following will cause the supply of paper to decrease?

answer

The price of lumber, an ingredient in paper production, increases

question

Which of the following will cause a leftward shift of the supply curve for houses

answer

An increase in the cost of construction materials

question

Which of the following will cause a leftward shift of the supply curve for electricity?

answer

an increase in the taxes on electricity production

question

A market is said to be in equilibrium when

answer

the quantity demanded equals the quantity supplied

question

In a market, the equilibrium price is determined by:

answer

the interaction of both demand and supply

question

If a market shortage exists,

answer

consumers will compete for the product by offering to pay more

question

When there is a surplus in a market, prices are likely to fall because:

answer

buyers do not wish to buy as much as sellers want to sell

question

If a market surplus exists,

answer

producers will compete for customers by reducing prices

question

If demand is constant, a leftward shift in the supply curve will result in:

answer

a decrease in equilibrium quantity and a higher equilibrium price

question

If supply is unchanged, a decrease in the demand for soft drinks will cause equilibrium price to:

answer

fall and equilibrium quantity to fall

question

If supply is constant, a decrease in the demand for potato chips will cause:

answer

a decrease in the equilibrium price and a decrease in equilibrium quantity

question

If supply is unchanged, a rightward shift in the demand curve for gourmet ice cream will result in:

answer

an increase in equilibrium quantity and a higher equilibrium price

question

In the market for web design services, when more companies desire web pages, the equilibrium

answer

quantity of web design services increase

question

If a state decides to reduce the cost of college tuition, by providing more Pell grants to students, ceteris paribus, then the:

answer

quantity demanded of a college education in the state will increase

question

A price ceiling is:

answer

an upper limit on the price of a good

question

A market shortage is:

answer

caused by a price ceiling

question

When a price ceiling is set for a market, the quantity demanded will be:

answer

greater than the equilibrium quantity and price will be less than the equilibrium price

question

Rent controls are an example of:

answer

a price ceiling

question

A price floor is:

answer

a lower limit on the price of a good

question

In a market economy, the ___ determines who gets the goods and services produced

answer

market mechanism

question

Refer to Figure 3.1. Consider the market for DVD players. People prefer watching movies on DVDs at home instead of going to the movie theater.

answer

NOT C

question

The equilibrium price and quantity in Figure 3.2 are, respectively,

answer

$30 and 15 units

question

In Figure 3.2 the highest price at which buyers are willing and able to purchase 5 units is:

answer

$50

question

If the actual market price is held to $10 per unit in Figure 3.3, there will be a:

answer

shortage of 2 units

question

If the government wants to use a price ceiling to change the market outcome in Figure 3.3, it should choose a price of:

answer

$10

question

Which panel of Figure 3.4 represents the changes in the market for chicken when farmers use hormones to increase the production of chicken, but consumers are concerned about eating the chicken?

answer

B

question

Which panel of Figure 3.4 represents the changes in the market for beef when the price of corn (cattle feed) rises and the Surgeon General reports that red meat contributes to coronary disease?

answer

D

question

Which panel of Figure 3.4 represents the changes in the market for parking spaces when the student population increases on a college campus and one parking lot has been destroyed to build a new building?

answer

C

question

In Table 3.1, if the price is $4, the market,

answer

experiences a shortage of 13 units

question

In Table 3.2, if the worldwide price of trucks is $30,000, the truck market:

answer

is in equilibrium

question

One HEADLINE article in the text, "Hurricane Sandy to Raise Prices on Used Cars" describes the impact of thousands of cars being destroyed by the storm. What will happen to the equilibrium quantity of used cars if the supply decreases?

answer

decrease

question

If a product becomes more popular: a. Which curve will shift? b. Along which curve will price and quantity move? c. At a new equilibrium, will price be higher or lower? d. At a new equilibrium, will quantity be higher or lower?

answer

a. demand b. supply c. higher d. higher

Econ Chapter 3 Week 4 – Flashcards

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