ECON 2301 (Exam 2)

# ECON 2301 (Exam 2) - ECON 2301-Exam 2 1 Which of the...

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ECON 2301-Exam 2 1. Which of the following would most likely increase the price of chicken, a normal good? A) a reduction in the price of grains used to produce chicken feed B) a reduction in the price of beef, a substitute for chicken C) unusually hot weather that kills millions of chickens before they are ready for market D) a decrease in consumer income 2. Which of the following is the correct way to describe equilibrium in a market? A) At equilibrium, demand equals supply. B) At equilibrium, quantity demanded equals quantity supplied. C) At equilibrium, market forces no longer apply. D) Equilibrium is a tendency for price to change, a state of perpetual motion. E) At equilibrium, the "fairest" price for output is achieved. 3. A price ____ set ____ the equilibrium price will lead to a shortage. A) ceiling; above B) ceiling; below C) floor; above D) floor; below 4. Table 5-1 PRICE per large pepperoni pizza QUANTITY DEMANDED of large pepperoni pizzas QUANTITY SUPPLIED of large pepperoni pizzas \$10 1,000 units 5,500 units 9 2,000 units 5,000 units 8 3,000 units 4,500 units 7 4,000 units 4,000 units 6 5,000 units 3,500 units 5 6,000 units 3,000 units 4 7,000 units 2,500 units 3 8,000 units 2,000 units 2 9,000 units 1,500 units 1 10,000 units 1,000 units Refer to Table 5-1 . At a price of \$4, there is a ____ of ____ pizzas. A) shortage; 4,500 B) surplus; 4,500 C) shortage; 6,500 D) surplus; 6,500 E) shortage; 9,500 5. Figure 5-1 The diagram below represents the market for butter.

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Refer to Figure 5-1 . If a price ceiling of \$2 is imposed, ____ units of butter will be sold. A) 8,000 B) 5,000 C) 4,000 D) 3,000 E) 2,000 6. Which of the following is true about demand and quantity demanded? A) A change in quantity demanded is caused by a change in current price while a change in demand is caused by a change in some other factor. B) A change in demand is caused by a change in current price while a change in quantity demanded is caused by a change in some other factor. C) Both a change in quantity demanded and a change in demand are caused by a change in a factor other than the current price. D) Both a change in quantity demanded and a change in demand are caused by a change in the current price. E) None of the above. 7. Medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle- reducing properties. An economist would expect to find that, after this announcement, the price of Retin-A ____ and the quantity sold ____. A) rose; fell B) rose; rose C) fell; fell D) fell; rose 8. If both the supply and demand curves shift to the left, then we can conclude that there will be a(n): A) increase in the equilibrium quantity sold.
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ECON 2301 (Exam 2) - ECON 2301-Exam 2 1 Which of the...

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