ECO2023 Chapter 3 Practice Quizzes – Flashcards
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Ceteris paribus, if the price of a digital camera rises, then we can expect
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A decrease in the quantity demanded of digital cameras.
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Ceteris paribus, if the subsidies given to corn syrup producers decrease, then we can expect
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A decrease in the supply of corn syrup.
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If there is a shortage at a given price, then
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That price is less than the equilibrium price.
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Assume that pencils and pens are substitutes. If the price of pencils rises, then we will see
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An increase in the demand for pens.
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According to the law of demand, during a given period of time, the quantity of a good demanded
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Increases as its price falls, ceteris paribus.
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Which of the following is a market transaction?
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A college student purchases a laptop computer.
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Which of the following is not held constant along a given supply curve for a good?
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Price.
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Peanut butter and jelly are complements. A decrease in the price of one will result in
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An increase in the demand for the other.
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Tickets to a sporting event go on sale and sell out almost instantly. This suggests that
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The price for the tickets is below the equilibrium price.
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Which panel of Figure 3.3 represents the changes in the market for cigarettes when the government increases subsidies for the production of tobacco and at the same time bans smoking in public buildings?
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B. Supply curve (rightward)
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Ceteris paribus, which of the following would generally cause an increase in the demand curve for new automobiles?
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An increase in consumers' income.
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The term opportunity cost refers to the
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The most desired good or service given up when something is obtained.
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When the demand for coffee increases, ceteris paribus, the equilibrium price will also increase because
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A shortage exists at the old equilibrium price.
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Which of the following is a determinant of market supply?
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Available technology.
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In a market economy, which of the following determines the answer to the WHAT to produce question?
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Prices and profit.
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If the actual market price were fixed at $15 per unit in Figure 3.2,
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There would be a surplus of 40 units.
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In 2007 a company sold 35,000 MP3 players at $150 each. In 2008 the same company sold 40,000 MP3 players at $170 each. This information suggests that
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The demand for MP3 players increased from 2007 to 2008.
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Which of the following events would cause a rightward shift in the market supply curve for automobiles?
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A technological improvement that reduces the cost of production.
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A rightward shift in a demand curve and a rightward shift in a supply curve both result in a
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Higher equilibrium quantity.
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Suppose both the demand for and supply of salsa increase (although not necessarily by the same amount). What can we conclude about changes in the price and quantity of salsa?
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The quantity increases but the change in the price cannot be determined.
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A buyer is said to have a demand for a good only when
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The buyer is both willing and able to purchase the good.
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If the government places a price ceiling on cancer-treating drugs, then
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Fewer cancer treating drugs will be available.
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Suppose a hurricane hits Florida, causing widespread damage to houses and businesses. The governor of Florida places price ceilings on all building materials to keep the prices reasonable. Which of the following is the most likely result?
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Shortages of building materials and a slower recovery from the storm.
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Ceteris paribus means
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Holding everything constant except for the variables you are interested in examining.
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A change in demand means there has been a shift in the demand curve, and a change in quantity demanded
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Means that price has changed and there is movement along the demand curve.
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Which of the following is purchased in a product market?
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Cell phone service.
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Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left, ceteris paribus. Figure 3.1 Shifts of Supply and Demand Steel: the government introduces environmental restrictions on the dumping of wastes from producing steel.
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A. Supply curve (leftward)
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The goal of the business firms in a market economy is to maximize
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Total profits.
