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13. What is the difference between a shortage and scarcity? A) Scarcity will almost always exist, but a shortage will exist only if the price is kept below the equilibrium level. B) Scarcity is a result of two or more alternative uses, and quantities of supply and demand adjusting to flexible prices will create shortages. C) A shortage will exist when a good is scarce. D) There is no distinction between the two. They are the same thing.

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22 Sep 2018
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Related questions

The primary difference between a change in supply and a change in the quantity supplied is:
Choose one answer.
a. a change in quantity supplied is a shift in the supply curve, and a change in supply is a movement along the supply curve.
b. both a change in quantity supplied and a change in supply are movements along the supply curve, only in different directions.
c. a change in quantity supplied is a movement along the supply curve, and a change in supply is a shift of the supply curve.
d. a change in supply is a movement to the left along the supply curve and a change in quantity supplied is a movement to the right along the supply curve.

Question 2
What is the difference between a shortage and scarcity?
Choose one answer.
a. Scarcity will always exist because choices must be made, but a shortage will only exist if the price is kept below the equilibrium level.
b. Scarcity is a result of two or more alternative uses and will always exist, and quantities of supply and demand adjusting to flexible prices will create shortages.
c. A surplus will exist when a good is scarce; a shortage merely implies that there isn't as much of something as people would like, which is nearly always the case.
d. There is no distinction between the two. They are the same thing.

Question 3
A decrease in supply means:
Choose one answer.
a. a shift to the left of the entire supply curve.
b. moving downward (to the left) along the supply curve with lower prices.
c. less will be demanded at every price.
d. more will be supplied at every price.

Question 4
A decrease in demand, with no change in supply, will lead to ________ in equilibrium quantity and ________ in equilibrium price.
Choose one answer.
a. an increase; an increase
b. an increase; a decrease
c. a decrease; an increase
d. a decrease; a decrease

Question 5
After graduation from college you will receive a substantial increase in your income from a new job. If you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger would be considered a( n ):
Choose one answer.
a. normal good.
b. substitute good.
c. complementary good.
d. inferior good.

Question 6
There is equilibrium in the market when:
Choose one answer.
a. there is no shortage.
b. there is no surplus.
c. price is established where the supply curve and the demand curve intersect.
d. all of the above are true.

Question 7
Which would not cause the supply curve to shift?
Choose one answer.
a. a change in technology
b. a change in factor costs
c. a change in the price of the good
d. a change in the prices of related goods

Question 8
Given that meat and potatoes are complementary goods, if the price of meat decreases substantially, there would be:
Choose one answer.
a. an increase in the demand for potatoes.
b. an increase in the quantity of potatoes demanded.
c. a decrease in the demand for potatoes.
d. no change in the demand for potatoes.

Question 9
Given that milk and cookies are complements, suppose the price of flour (an ingredient in cookies) rises. What happens in the market for milk?
Choose one answer.
a. The equilibrium price and quantity rise.
b. The equilibrium price rises and the equilibrium quantity falls.
c. The equilibrium price and quantity fall.
d. The equilibrium price falls and the equilibrium quantity rises.

Question 10



A temporary price of $2 in this market would result in:
Choose one answer.
a. a surplus of 8,000 bushels.
b. a shortage of 8,000 bushels.
c. a shortage of 10,000 bushels.
d. a surplus of 10,000 bushels.

Question 11
The price of oranges rises. What happens in the market for apples, which are a substitute for oranges?
Choose one answer.
a. The equilibrium price falls, and the equilibrium quantity rises.
b. The equilibrium price rises, and the equilibrium quantity falls.
c. The equilibrium price and quantity rise.
d. The equilibrium price and quantity fall.

Question 12
A market surplus occurs if the:
Choose one answer.
a. price is below the equilibrium price.
b. price is equal to the equilibrium price.
c. equilibrium price is above the actual price.
d. equilibrium price is below the actual price.
Attending college can be viewed as a form of
investment in which costs are borne today and benefits are receivedin the future
investment in which benefits are received today and costs are bornein the future
consumption, because learning is an enjoyable activity
leisure, because learning is an enjoyable activity


2. A medium of exchange must be called:
approved by the government
socially acceptable in exchange for goods and services
easy to reproduce
used to eliminate specialization and the division of labor


3. Society's production possibilities frontier
helps explain the immense complexity of the real economy
demonstrates that, although resources are scarce for individuals,there is no problem of scarcity for society as a whole
is based on unrealistic assumptions and therefore has no value asan economic tool
is based on simplifying assumptions, but is still useful forillustrating scarcity, opportunity cost, and economic growth


4. On a production possibilities frontier, the opportunity cost ofone more unit of a commodity per time period is measured bythe
monetary price of the commodity
amount of the other commodity that must be sacrificed
amount of unemployed resources that must be used
amount of satisfaction it gives consumers


5. Pure capitalism and a pure command system represent
two different ways of answering the basic economic questions
two names describing the same method of answering the basiceconomic questions
the only two ways of answering the basic economic questions
the most efficient ways to answer the basic economicquestions


6. In what way is consumer demand different from consumerwants?
Demand is only for necessities.
Demand is only for luxuries.
Demand takes into account the ability to pay.
Consumer wants are only for luxuries.


7. In the case of a normal good, an increase in consumers' incomeswould shift the (Points : 1)
supply and demand curves inward
demand curve inward
demand curve outward
supply curve inward


8. Larger quantities of any good will be supplied at higher pricesbecause
consumers will be more satisfied
higher prices attract resources from other uses
people are naturally lazy and have to be bribed to give up theirleisure
price and quantity supplied are inversely related


9. If there is a shortage in the market for athletic shoes,
the price should rise to eliminate the shortage
inventories of athletic shoes will grow
demand will decrease to restore equilibrium
firms will reduce production to restore equilibrium


10. Which of the following is correct when a price is set below amarket's equilibrium price? (Points : 1)
quantity demanded exceeds quantity supplied at the set price
quantity demanded is less than quantity supplied at the setprice
quantity demanded is equal to quantity supplied at the setprice
at the set price there is a surplus


Consumer surplus is the difference between the

Market price and the minimum price required to induce production

The maximum willingness to pay of consumers and the market price

Quantity demanded and the quantity supplied at the market price

Full economic price and the minimum price required to induce production

Show your work!

8.a) What is scarcity? Can it be eliminated? Explain

----------------------------------------------------------------------------------------------------------------------------

b)Why does scarcity exist? How can it be resolved? Explain

_____________________________________________________________________________________

c) IS there such a thing as a free lunch? Yes No. Explain

____________________________________________________________________________________

_____________________________________________________________________________________

What is market equilibrium? Does the market always achieve equilibrium? If so, why? If not, why? Explain. Illustrate with examples and graphs where necessary

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

The movement along a given demand curve is the same as a shift in the demand curve.

True False. Explain

_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

If the income elasticity for designer jeans is 1.5, a 10% increase in income will lead to a

15% rise in demand for designer jeans.

0.15% drop in the demand for designer jeans.

0.15% rise in demand for designer jeans.

Show your work


12. Which of the following increases the potential for sustainable long-run industry profits?

Entry.

The availability of multiple substitutes.

Absence of complements.


13. If firms in the pizza industry are earning negative economic profits, which of the following will most likely occur in the future?

Some firms will exit the market.

The economic profits of the firms in the industry will rise.

The market price for pizza will rise.

All of the responses are correct.

Explain your choice

14. You are the manager of a popular hand bag company. You know that the advertising elasticity of demand for your product is 2.5. How much will you have to increase spending on advertising in order to increase demand by 4%?

a. 0.16%.

1.6%.

2%.

10%.

Show your work

15. a) What is meant by price elasticity of demand. List and explain three factors of price elasticity of demand.

b) Why are managers interested in the concept of consumer surplus?

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