Tbch02 - CHAPTER 2 Supply and Demand MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 1

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CHAPTER 2 Supply and Demand MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) According to the Law of Demand, the demand curve for a good will A) shift leftward when the price of the good increases. B) shift rightward when the price of the good increases. C) slope downward. D) slope upward. Answer: C Diff: 0 Topic: Demand 2) As the price of a good increases, the change in the quantity demanded can be shown by A) shifting the demand curve leftward. B) shifting the demand curve rightward. C) moving down along the same demand curve. D) moving up along the same demand curve. Answer: D Diff: 0 Topic: Demand 3) If the price of automobiles were to increase substantially, the demand curve for gasoline would most likely A) shift leftward. B) shift rightward. C) become flatter. D) become steeper. Answer: A Diff: 0 Topic: Demand 4) If the price of automobiles were to decrease substantially, the demand curve for public transportation would most likely A) shift rightward. B) shift leftward. C) remain unchanged. D) remain unchanged while quantity demanded would change. Answer: B Diff: 1 Topic: Demand 7
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Chapter 2/Supply and Demand 5) An increase in the demand curve for orange juice would be illustrated as a A) leftward shift of the demand curve. B) rightward shift of the demand curve. C) movement up along the demand curve. D) movement down along the demand curve. Answer: B Diff: 0 Topic: Demand 6) The term “inverse demand curve” refers to A) a demand curve that slopes upward. B) expressing the demand curve in terms of price as a function of quantity. C) the demand for “inverses.” D) the difference between quantity demanded and supplied at each price. Answer: B Diff: 0 Topic: Demand 7) If the demand for oranges is written as Q = 100 - 5p, then the inverse demand function is A) Q = 5p - 100. B) Q = 20 - .2p. C) p = 20 - 5Q. D) p = 20 - .2Q. Answer: D Diff: 1 Topic: Demand 8) If government regulations prohibit the production of a particular good, the demand curve for that good will most likely A) shift leftward. B) shift rightward. C) remain unchanged. D) disappear. Answer: C Diff: 1 Topic: Demand 8
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Chapter 2/Supply and Demand 9) Suppose the demand curve for a good shifts rightward, causing the equilibrium price to increase. This increase in the price of the good results in A) a rightward shift of the supply curve. B) an increase in quantity supplied. C) a leftward shift of the supply curve. D) a leftward movement along the supply curve. Answer: B Diff: 0 Topic: Supply 10) Suppose there are 100 identical firms in the rag industry, and each firm is willing to supply 10 rags at any price. The market supply curve will be a(n) A) vertical line where Q = 10. B) vertical line where Q = 100.
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This note was uploaded on 12/21/2011 for the course ECON 214 taught by Professor Bayemichael during the Spring '09 term at HKU.

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Tbch02 - CHAPTER 2 Supply and Demand MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 1

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