Perloff-tb03-Ec300

Perloff-tb03-Ec300 - Chapter 3 Applying the...

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Chapter 3 Applying the Supply-and-Demand Model ± Multiple Choice 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 Difficulty: 1 Topic: How Shapes of Demand and Supply Curves Matter Question Status: Revised 2) The change in price that results from a rightward shift in demand will be greater if (a) the supply curve is horizontal than if the supply curve is upward sloping. (b) the supply curve is relatively steep than if the supply curve is relatively flat. (c) the supply curve is upward sloping than if the supply curve is vertical. (d) the supply curve is horizontal than if the supply curve is vertical. Answer: B Difficulty: 1 Topic: How Shapes of Demand and Supply Curves Matter Question Status: New 3) 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 Difficulty: 0 Topic: How Shapes of Demand and Supply Curves Matter Question Status: Revised

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34 Jeffrey Perloff • Microeconomics, Third Edition Figure 3.1 4) 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 Difficulty: 0 Topic: How Shapes of Demand and Supply Curves Matter Question Status: Revised 5) 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 Difficulty: 1 Topic: How Shapes of Demand and Supply Curves Matter Question Status: Revised
Chapter 3 Applying the Supply-and-Demand Model 35 6) A vertical demand curve results in (a) no change in quantity when the supply curve shifts.

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This note was uploaded on 03/18/2012 for the course ECON 201 taught by Professor Çakmak during the Spring '10 term at Middle East Technical University.

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Perloff-tb03-Ec300 - Chapter 3 Applying the...

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