Some Practice questions

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Department
Economics for Management Studies
Course
MGEA01H3
Professor
Kieran Furlong
Semester
Fall

Description
1. What might cause a demand function to shift to the right? (2.50 points) Your response: a. An increase in the price of a substitute. (You answered correctly!) Feedback : Learning Objective: Shifting the demand curve Level of Learning: Knowledge Source: Unique Type: Word Problem 2.50 points awarded. The correct answer is: a. An increase in the price of a substitute. b. An increase in the product's own price. c. An increase in the price of a complement. d. A decrease in the price of a substitute. e. An expectation that the product's own price will fall in the future. 2. In a free market, if the price of a good is above the equilibrium price, then (2.50 points) Your response: c. demanders, wanting to ensure they acquire the good, will bid the price lower. Feedback : Learning Objective: Determination of prices Level of Learning: Comprehension Source: Unique Type: Word Problem 0 points awarded. The correct answer is: a. government needs to set a higher price. b. suppliers, dissatisfied with growing inventories, will raise the price. c. demanders, wanting to ensure they acquire the good, will bid the price lower. d. government needs to set a lower price. e. suppliers, dissatisfied with growing inventories, will lower the price. 3. Reference: 3-11 Assume figure 4.3 illustrates the change when firms' technology improves. As a result, the equilibrium price moves from _____ to _____. (2.50 points) Your response: c. $60; $30 (You answered correctly!) Feedback : Learning Objective: Shifting the supply curve Level of Learning: Application Source: Unique Type: Graphical Problem 2.50 points awarded. The correct answer is: a. $30; $60 b. $20; $30 c. $60; $30 d. $30; $20 e. $60; $20 4. The supply of Shrek action figures is shown below. The bold, solid line is the current supply. Reference: 3-9 If the price of the plastic used to make action figures rises, supply will (2.50 points) Your response: c. shift from Current Supply to Supply A. (You answered correctly!) Feedback : Learning Objective: Shifting the supply curve Level of Learning: Application Source: Unique Type: Word Problem 2.50 points awarded. The correct answer is: a. shift from Current Supply to Supply B. b. not change because a change in raw material prices cannot affect market prices. c. shift from Current Supply to Supply A. d. remain at Current Supply because Demand for Shrek figures is so strong. e. remain at Current Supply, but quantity supplied will increase to recover the higher costs. 5. If pizzas are normal good, then a decrease in the price of pizza will cause a(n) (2.50 points) Your response: b. increase in quantity demanded. (You answered correctly!) Feedback : Learning Objective: Change in demand vs quantity demanded Level of Learning: Comprehension Source: Unique Type: Word Problem 2.50 points awarded. The correct answer is: a. increase in demand. b. increase in quantity demanded. c. decrease in quantity demanded. d. decrease in supply. e. decrease in the number of consumers. 6. A movement along a demand curve from one price-quantity combination to another is called (2.50 points) Your response: b. a shift in the demand curve. Feedback : Learning Objective: Change in demand vs quantity demanded Level of Learning: Knowledge Source: Unique Type: Word Problem 0 points awarded. The correct answer is: a. a change in quantity demanded. b. a shift in the demand curve. c. a change in demand. d. a change in quantity supplied. e. a change in supply. 7. Sellers tend to offer _______ for sale as price increases, and so the supply curve is ______ sloping. (2.50 points) Your response: e. more; upward (You answered correctly!) Feedback : Learning Objective: Define a supply curve Level of Learning: Comprehension Source: Unique Type: Word Problem 2.50 points awarded. The correct answer is: a. goods; not b. less; downward c. more; downward d. less; upward e. more; upward 8. A market in disequilibrium would feature (2.50 points) Your response: d. either excess supply or excess demand. (You answered correctly!) Feedback : Learning Objective: Economic equilibrium Level of Learning: Comprehension Source: From 2e Type: Word Problem 2.50 points awarded. The correct answer is: a. a stable price. b. consumers able to purchase all they wish at the market price. c. a stable quantity. d. either excess supply or excess demand. e. firms able to sell all they wish at the market price. 9. Reference: 3-13 An increase in supply is represented by shifting from (2.50 points) Your response: a. curve A to curve B. (You answered correctly!) Feedback : Learning Objective: Shifting the supply curve Level of Learning: Application Source: Unique Type: Graphical Problem 2.50 points awarded. The correct answer is: a. curve A to curve B. b. curve B to curve A. c. curve C to curve D. d. curve D to curve C. e. curve C to curve B. 10.When the price of a good is below its equilibrium value, (2.50 points) Your response: a. consumers will bid the price up. (You answered correctly!) Feedback : Learning Objective: Determination of prices Level of Learning: Application Source: Unique Type: Word Problem 2.50 points awarded. The correct answer is: a. consumers will bid the price up. b. excess supply will occur. c. it will tend to stay below the equilibrium value. d. suppliers will notice their inventories are growing.
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