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ECON 203 Study Guide - Quiz Guide: Demand Curve, Economic Equilibrium, Complementary GoodExam

Course Code
ECON 203
Study Guide

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Econ 201 Tutorial #2
Date: Week 4
Coverage: Chapter 3 Demand, Supply and the Classical Marketplace
I. Multiple Choice Questions:
1. When a market is in equilibrium,:
A) no shortages exist.
B) quantity demanded equals quantity supplied.
C) a price is established that clears the market.
D) all the above.
2. The supply curve:
A) shows the quantity supplied at each specific price.
B) slopes downward.
C) shows the positive relationship between price and quantity supplied.
D) A and C.
3. A negative relationship exists between changes in price and:
A) quantity supplied.
B) supply.
C) quantity demanded.
D) demand.
4. If goods J and K are substitutes, an increase in the price of J causes:
A) quantity demanded of J to fall and the demand curve for K to shift toward the origin.
B) a decrease in quantity demanded for J and an outward shift of K's demand curve.
C) quantity demanded of J remains constant, but the demand for K decreases.
D) the demand curve for both J and K shift.
5. All the following will cause the demand curve to shift to the left except:
A) a reduction in income if the good is normal.
B) an increase in the price of a complementary good.
C) an increase in the price of a substitute good.
D) an increase in income if the good is inferior.
6. An improvement in overall technology that allows more output to be produced with the same level of
inputs causes:
A) a movement up the supply curve, resulting in both a higher equilibrium price and quantity.
B) a leftward shift of the supply curve so that less is offered for sale at every price.
C) no movement of the supply curve but a fall in price and an increase in quantity supplied.
D) a rightward shift of the supply curve so that more is offered for sale at every price.
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