tbch03 - CHAPTER 3 Applying the Supply-and-Demand Model...

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CHAPTER 3 Applying the Supply-and-Demand Model MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question. 1) The change in price that results from a leftward shift of the supply curve will be greater if A) the demand curve is relatively steep than if the demand curve is relatively flat. B) the demand curve is relatively flat than if the demand curve is relatively steep. C) the demand curve is horizontal than if the demand curve is vertical. D) the demand curve is horizontal than if the demand curve is downward sloping. Answer: A Diff: 1 Topic: How Shapes of Demand and Supply Curves Matter 2) If the demand curve for a good is horizontal and the price is positive, then a leftward shift of the supply curve results in A) a price of zero. B) an increase in price. C) a decrease in price. D) no change in price. Answer: D Diff: 0 Topic: How Shapes of Demand and Supply Curves Matter 31
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Chapter 3/Applying the Supply-and-Demand Model Figure 3.1 3) Figure 3.1 shows the supply and demand curves for rice in the U.S. and Japan. Assume there is no trade between the two countries. If bad weather causes the supply curves in each country to shift leftward by the same amount, then A) the price will increase in both countries. B) the price will decrease in both countries. C) the change in price cannot be determined. D) None of the above. Answer: A Diff: 0 Topic: How Shapes of Demand and Supply Curves Matter 4) Figure 3.1 shows the supply and demand curves for rice in the U.S. and in Japan. Assume there is no trade between the two countries. If bad weather causes the supply curves in each country to shift leftward by the same amount, then A) the price will increase the same amount in both countries. B) the price will decrease the same amount in both countries. C) the price will increase more in Japan than in the U.S. D) the price will decrease more in Japan than in the U.S. Answer: C Diff: 1 Topic: How Shapes of Demand and Supply Curves Matter 32
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Chapter 3/Applying the Supply-and-Demand Model 5) A vertical demand curve results in A) no change in quantity when the supply curve shifts. B) no change in price when the supply curve shifts. C) no change in the supply curve being possible. D) no change in quantity when the demand curve shifts. Answer: A Diff: 0 Topic: How Shapes of Demand and Supply Curves Matter 6) A vertical demand curve for a particular good implies that consumers are A) sensitive to changes in the price of that good. B) not sensitive to changes in the price of that good. C) irrational. D) not interested in that good. Answer: B Diff: 0 Topic: How Shapes of Demand and Supply Curves Matter 7) The percentage change in the quantity demanded in response to a percentage change in the price is known as the A) slope of the demand curve. B) excess demand.
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tbch03 - CHAPTER 3 Applying the Supply-and-Demand Model...

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