quiz 2

quiz 2 - Consumer surplus is equal to: Student Response A....

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Consumer surplus is equal to: Student Response A. total area under the demand curve down to the market price. Student Response B. the area from the demand curve to the supply curve less than the equilibrium quantity. C. the vertical distance from the demand curve down to the horizontal axis. D. total area under the demand curve. 2. Which of the following pairs of goods would be an example of complements? Student Response A. Shoes and sandals Student Response B. Gasoline and automobiles C. Apples and bananas D. Cooking oil and golf balls 3. The law of supply implies that: Student Response A. as the price of the product increases, the quantity supplied increases. B. the supply curve slopes upward. C. there is a positive or direct relationship between price and quantity supplied. Student Response D. all of these correctly state the law of supply. 4. The income effect occurs when: Student Response Student Response A. buyers buy more of a good because their purchasing power has increased. B. buyers buy more of a relatively cheaper good.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
C. sellers hire more workers because buyers incomes have increased. D. sellers produce more output because their profit has increased. 5. In figure 4.1, an effective price floor would be: Student Response Student Response A. P1 B. P2 C. P3 D. all of the above 6. If the cost of producing a product increases, then: Student Response A. the quantity demanded will increase. Student Response B. the demand for the product will decrease. C. the quantity supplied will increase. D. the supply of the product will decrease. 7. What type of market automatically reaches economic efficiency? Student Response Student Response A. A market with a government mandated price floor. B. A competitive market with no government intervention. C. A market with a government mandated price ceiling. D. All of the above. 8. When the price of a good increases: Student Response
Background image of page 2
A. the quantity demanded of the good will increase. B. the demand for the good will increase. C. the quantity demanded of the good will decrease. Student Response D. the demand for the good will decrease. 9. The existence of a surplus in a market will cause: Student Response A. market price to rise and quantity demanded to decrease. B. market price to rise and quantity demanded to increase. C. market price to fall and quantity demanded to increase. Student Response D. market price to fall and quantity demanded to decrease. 10. Demand would be increased by: Student Response A. a decrease in the price of the product. B. an increase in the price of a substitute good. C. an increase in consumer income. Student Response D. all of the above. 11. The law of demand states that holding everything else constant: Student Response Student Response A. there is an inverse or down sloping relationship between price and quantity. B.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/15/2008 for the course ECO 2023 taught by Professor Sabet during the Spring '08 term at FIU.

Page1 / 14

quiz 2 - Consumer surplus is equal to: Student Response A....

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online