Study Guide-Exam 2

Study Guide-Exam 2 - Study Guide - Exam 2 (Fall 2010)...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Study Guide - Exam 2 (Fall 2010) Student: _______________________________________________________________________________________ Use the figure below to answer the following question(s): 1. Refer to the above diagram, which shows demand and supply conditions in the competitive market for product X. If supply is S 1 and demand D 0 , then A. at any price above 0 G a shortage would occur. B. 0 F represents a price that would result in a surplus of AC . C. a surplus of GH would occur. D. 0 F represents a price that would result in a shortage of AC . 2. An unusually large crop of coffee beans might: A. increase the supply of coffee. B. increase the price of coffee. C. decrease the quantity of coffee consumed. D. increase the price of tea. 3. The term quantity demanded: A. refers to the entire series of prices and quantities that comprise the demand schedule. B. refers to a situation in which the income and substitution effects do not apply. C. refers to the amount of a product that will be purchased at some specific price. D. means the same thing as demand. 4. If Z is an inferior good, an increase in money income will shift the: A. supply curve for Z to the left. B. supply curve for Z to the right. C. demand curve for Z to the left. D. demand curve for Z to the right.
Background image of page 1

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

View Full DocumentRight Arrow Icon
Markets explained on the basis of supply and demand: A. assume many buyers and many sellers of a standardized product. B. assume market power so that buyers and sellers bargain with one another. C. do not exist in the real-world economy. D. are approximated by markets in which a single seller determines price. Use the figure below to answer the following question(s): 6. Refer to the above diagram, which shows three demand curves for coffee. Which would cause the change in the demand for coffee illustrated by the shift from D1 to D2 ? A. A decrease in the price of tea B. An increase in consumer incomes C. An increase in the price of sugar D. A technological improvement in the production of coffee In the following question(s) you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand ( D ) for or supply ( S ) of X (2) the equilibrium price ( P ) of X and (3) the equilibrium quantity ( Q ) of X . 7. Refer to the above. If X is an inferior good, a decrease in income will: A. decrease D , decrease P , and decrease Q . B. decrease D , decrease P , and increase Q . C. increase S , decrease P , and increase Q . D. increase D , increase P , and increase Q . 8. The location of the supply curve of a product depends on: A. the technology used to produce it. B. the prices of resources used in its production. C. the number of sellers in the market. D.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 40

Study Guide-Exam 2 - Study Guide - Exam 2 (Fall 2010)...

This preview shows document pages 1 - 3. Sign up to view the full document.

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