SCAN0805_000 - Chapter Three. Name: Date: 1. The Kansas...

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Unformatted text preview: Chapter Three. Name: Date: 1. The Kansas market for com is considered a competitive market. This means there are buyers and sellers of corn in Kansas. A) many; few B few; many 5 many; many D) few; few 2. The law of demand states that, other things equal: A) as the price increases, the quantity demanded will increase. B) as the price decreases, the demand curve will shift to the right. C) as the price increases, the demand will decrease. D) as the price increases, the quantity demanded will decrease. 3. When the economy suffers a downturn, vacationers are more likely to take car trips than to fly. Which of the following provides the most reasonable explanation for this phenomenon? A) Air travel and vacation travel by car are complementary goods. B) Air travel and vacation travel by car are both normal goods. C) Air travel is a normal good and vacation travel by car is an inferior good. D) Air travel is an inferior good and vacation travel by car is a normal good. 4. A shift of the demand curve for Luis's Pizza would not be caused by a change in the: A) buyers' incomes. 13) price of Luis's Pizza. C) price of Humberto's Pizza. D) popularity of Luis's Pizza. 5. A good is normal if: A) when income increases, the demand remains unchanged. B) when income increases, the demand decreases. C) when income increases, the demand increases. D) income and the demand are unrelated. 6. A decrease in the price of eggs will result in a(n): A) increase in the demand for eggs. 13) increase in the supply of eggs. C) greater amount of eggs supplied. Q greater amount of eggs demanded. 7. If the price of hamburgers increases, it would probably result in in the demand for hamburger buns. A) a decrease B) an increase C) no change D) random fluctuations Chapter Three Page 1 8. 10. ll. 12. 13. 14. Given that chicken and beef are substitute goods, if the price of chicken decreases substantially, there would be: A) an increase in the demand for beef. B) a decrease in the demand for beef. C) a decrease in the quantity demanded of beef. D) no change in the demand for beef. For most goods, purchases tend to rise with increases in buyers' incomes and to fall with decreases in buyers' incomes. Such goods are known as: A) inferior goods. B) direct goods. C) normal goods. D) indirect goods. The demand for meals at a local Applebee's will fall if: A) the Olive Garden offers a 10% discount coupon in the local newspaper. B) the price of a meal at Applebee’s rises. C) local incomes increase and Applebee‘s is a normal good. D) the price of gasoline falls in the local area. The A) D) apples will decrease due to higher apple prices. demand for quantity demanded of supply for equilibrium for A direct relationship between price and quantity is represented by: A) the demand curve. B) the supply curve. C) the production possibility frontier. D) equilibrium. A decrease in the price of a good will result in: A) an increase in demand (a rightward shift in the demand curve). B) an increase in supply (a rightward shift in the supply curve). @ an increase in the quantity demanded along a given demand curve. D) more being supplied along a given supply curve. A shift of a demand curve to the right, all other things unchanged, will: A) increase equilibrium price and quantity. B) decrease equilibrium price and quantity. C) decrease equilibrium quantity and increase equilibrium price. D) increase equilibrium quantity and decrease equilibrium price. Chapter Three Page 2 15. 16. 17. 18. 19. 20. 21. In the market for tacos, each of the following shifts the supply curve to the left except: A) an increase in the price of beef. B) an increase in the wages of taco shop workers. C) fewer taco shops. D) a decrease in the price of tacos. The typical supply curve illustrates that: A) other things equal, the quantity supplied for a good is inversely related to the price of a good. other things equal, the supply of the good creates its own demand for the good. other things equal, the quantity supplied for a good is positively related to the price of a good. price and quantity supplied are unrelated. B) C) D) Consider the supply curve for cotton shirts. An increase in the price of cotton will: A) increase the supply of cotton shirts. B) decrease the supply of cottoa shirts. C) not shift the supply cuwe for cotton shirts. D) decrease the demand for cotton shirts. A technological advance in the production of automobiles will: A) increase the demand for automobiles. B) increase the supply of automobiles. C) decrease the demand for automobiles. D) decrease the supply of automobiles. A decrease in suppiy means: A) a shift to the left of the entire supply curve. B) moving downward (to the left) along the supply curve with lower prices. C) less will be demanded at every price. D) more will be supplied at every price. The primary difference between a change in supply and a change in the quantity supplied is that: A) a change in quantity supplied is a movement along the supply curve, while a change in supply is a shift in the supply curve. B) both a change in quantity supplied and a change in supply are movements tilting the supply cuwe, only in different directions. a change in supply is related to the supply curve, while a change in quantity supplied is related to shifis in the demand curve that elicit a change in supply. a change in supply is a movement along the supply cuwe, while a change in quantity supplied is a shift in the supply curve. C) D) The market equilibrium is found at the: A) price where quantity demanded exceeds quantity supplied. B) price where quantity demanded equals quantity supplied. C) price where quantity suppiied exceeds quantity demanded. D) highest price the market will bear. Chapter Three Page 3 22. It is certain that the equilibrium price will fall when: A) the supply curve and the demand curve both shift to the right. B) the supply curve shifts to the right and the demand curve shifts to the left. C) supply and demand both increase. ' D) supply decreases and demand stays the same. 23. It is certain that the equilibrium quantity will rise when: A) the supply curve and the demand curve both shift to the right. B) the supply curve shifts to the right and the demand curve shifts to the left. C) supply and demand both decrease. D) supply decreases and demand stays the same. 24. It is true that equilibrium quantity will always rise if: A) supply and demand both increase. 13) supply increases and demand decreases. C) supply and demand both decrease. D) supply decreases and demand remains unchanged. 25. The tenns decrease in demand and decrease in quantity demanded can be used interchangeably. A) True B) False 26. If coffee and tea are Viewed as substitutes in consumption, then an increase in the price of coffee will increase the demand for tea. A) True B) False 27. If the input costs associated with supplying gasoline increases in Wisconsin, the supply of gasoline will decrease in Wisconsin. A) True B) False Chapter Three Page 4 ...
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SCAN0805_000 - Chapter Three. Name: Date: 1. The Kansas...

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