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Unformatted text preview: CHAPTER 4—DEMAND AND SUPPLY MULTIPLE CHOICE 1. If demand increases while supply decreases for a particular good: a. its equilibrium price will increase while the quantity of the good produced and sold could increase, decrease, or remain constant. b. the quantity of the good produced and sold will decrease while its equilibrium price could increase, decrease, or remain constant. c. the quantity of the good produced and sold will increase while its equilibrium price could increase, decrease or remain constant. d. its equilibrium price will decrease while the quantity of the good produced and sold could increase, decrease, or remain constant. ANS: A 2. Surplus is a condition of: a. excess supply. b. a deficiency in supply. c. market equilibrium. d. excess demand. ANS: A 3. The quantity of product X supplied can be expected to rise with a fall in: a. prices of competing products. b. price of X. c. energy-saving technical change. d. input prices. ANS: D 4. Derived demand is directly determined by: a. utility. b. the profitability of using inputs to produce output. c. the ability to satisfy consumer desires. d. personal consumption. ANS: B 5. A demand curve expresses the relation between the quantity demanded and: a. income. b. advertising. c. price. d. all of the above. ANS: C 6. Change in the quantity supplied reflects a: a. change in price. b. switch from one supply curve to another. c. change in one or more nonprice variables. d. shift in supply. ANS: A 7. Holding all else equal, an unnecessary increase in federally-mandated auto safety requirements leads to a decrease in: a. auto demand. b. the quantity of autos supplied. c. auto supply. d. the quantity of autos demanded. ANS: C 8. Holding all else equal, an increase in mandatory payments by employers for universal health care cov- erage for workers would lead to a decrease in the: a. supply of workers. b. the quantity supplied of workers. c. the quantity demanded of workers. d. demand for workers. ANS: D 9. The effect on sales of an increase in price is a decrease in: a. the quantity demanded. b. demand. c. supply. d. the quantity supplied. ANS: A 10. Utility is measured by: a. wealth. b. price. c. value or worth. d. income. ANS: C 11. Demand is the total quantity of a good or service that customers: a. are willing to purchase. b. are able to purchase. c. are willing and able to purchase. d. need. ANS: C 12. Demand for consumption goods and services is: a. derived demand. b. direct demand. c. product demand. d. utility. ANS: B 13. The demand function for a product states the relation between the aggregate quantity demanded and: a. all factors that influence demand. b. the aggregate quantity supplied....
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This note was uploaded on 03/08/2011 for the course ECONABA 635 taught by Professor Leiter during the Summer '10 term at Andrew Jackson.
- Summer '10