Quiz #1
The law of demand states that the quantity demanded of a good is
inversely related to the price of that good. Therefore, as the price of
a good goes:
up, the quantity demanded goes down.
The explanation for the law of demand involves: consumers’ ability to substitute different
goods
Which of the following would likely result in an increase in the
demand for beef?
An increase in family incomes
Refer to the graph shown. The quantity demanded when price is
$16.00 per week is:
2 CDs per week.
Refer to the graph shown. If the price is changed from $12.00 to
$4.00, the quantity demanded increases by:
4 CDs per week.
If the price of steel rises, the law of supply predicts that, other things
constant, the:
quantity supplied of steel will increase.
Suppose when you are offered $7.00 per hour to work in the campus
library, you choose not to work, but when you are offered $10.00 per
hour, you accept a part-time position. Your behavior can best be
explained by the fact that your supply of labor curve is:
upward-sloping.
Which of the following will move the supply curve for housing in
Florida, a popular retirement state, to the left?
Higher construction costs
Which of the following would best explain a decrease in the supply of
squash?
An increase in the price of other vegetables
When quantity supplied is greater than quantity demanded, prices
tend to:
fall.
Refer to the graphs shown. The relevant market is corn. The impact
of a poor corn harvest on the market for corn would most likely be
demonstrated by which graph?
Graph C – A poor harvest would result in a
shift in the supply towards less supply. That
shift is represented by Graph C.
If supply and demand both shift to the right, equilibrium quantity: rises, but the equilibrium price may rise, fall,
or stay the same.
When an effective price ceiling is removed, we would expect the
price of the good to:
increase and the quantity demanded to
decrease.
The most likely impact of an effective price floor is: a surplus will develop.
Which price ceiling will cause the greatest excess demand? $1
A government-imposed price floor of $2 will result in: neither excess supply nor excess demand
since it is not binding.
The invention of a machine that increases milk production is
discovered. If farmers were to decry the effect of this new technology
on the price of milk and lobby government to set the price of milk at
the price before the invention, what would be the result?
Excess supply of milk
Refer to the graph shown. If government establishes a minimum
wage at $7.25 per hour:
the number of job seekers will exceed the
number of job vacancies, resulting in some
unemployment.
Demand and supply are initially D and S1 respectively. Which of the
following best describes the effect of a $0.50 per pound tariff on
Danish hams imported into the United States?
Supply shifts from S1 to S0; quantity sold
declines to 60 thousand pounds and price
paid by consumers rises to $2.25 a pound
If the United States imposes tariffs on steel imports: the supply of the imported steel shifts to the
left and raises its market price.
