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ECON 1900 Study Guide - Credit Card Interest, Normal Good, Economic Equilibrium

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amaranthmuskrat712

21 Feb 2013

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Use the following to answer question 1: refer to the above data. D) interfere with the rationing function of prices: the market system corrects a shortage by: D) lowering product price to decrease production. raising product price to increase production. lowering product price to increase production. raising product price to decrease production: assume in a competitive market that price is initially above the equilibrium level. We can predict that price will: decrease, quantity demanded will decrease, and quantity supplied will increase, decrease and quantity demanded and quantity supplied will both decrease, decrease, quantity demanded will increase, and quantity supplied will decrease. B) increase in demand. increase in supply: decrease in demand, decrease in supply, with a downward sloping demand curve and an upward sloping supply curve for a product, a decrease in an input or resource price will: A) increase equilibrium price and quantity: decrease equilibrium price and quantity, decrease equilibrium price and increase equilibrium quantity.

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Related Questions

1, Eggs and bacon are complements. A decrease in the price of eggs would cause which of the following in the market for bacon?

a) The equilibrium price and quantity of bacon would increase.

b) The equilibrium price and quantity of bacon would decrease.

c) The equilibrium price and quantity of bacon would increase and the equilibrium quantity would decrease.

d) The equilibrium price of bacon would decrease and the equilibrium quantity would increase.

2) A movement to along the demand curve to the right may be caused by

a) a rise in income

b) an increase in supply

c) a fallin the price of a substitute good.

d) a rise in the price of inputs

3) Apples and organes are substitute goods. A freeze in Florida destroyed a good portion of orange crop. Ceteris Paribus

a) the price of both apples and oranges will increase

b) the price of both apples and oranges will fall

c) the price of oranges will increase and the price of apples will fall

d) the price of oranges will fall and the price of apples will increase

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.

1. Which of the following is NOT held constant along a given demand curve for a good?

B. Consumer's income

C. The price of substitutes

D. Consumer tastes

2. Decreasing Pm:

A. Will increase demand

B. Will decrease supply

C. Will cause a shortage

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