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Ch2 Student: ___________________________________________________________________________ 1. In a competitive market, the market demand is Q d = 60 - 6P and the market supply is Q s = 4P. A price ceiling of $3 will result in a A. shortage of 30 units. B. shortage of 15 units. C. surplus of 30 units. D. surplus of 12 units. 2. In a competitive market, the market demand is Q d = 60 - 6P and the market supply is Q s = 4P. The full economic price under a price ceiling of $3 is A. 6. B. 7. C. 8. D. 9. 3. The buyer side of the market is known as the: A. income side. B. demand side. C. supply side. D. seller side. 4. The law of demand states that, holding all else constant: A. as price falls, demand will fall also. B. as price rises, demand will also rise. C. price has no effect on quantity demanded. D. as price falls, quantity demanded rises. 5. Which of the following would not shift the demand for good A? A. drop in price of good A. B. drop in price of good B. C. consumer income. D. change in the level of advertising of good A. 6. Changes in the price of good A leads to a change in: A. demand of good A. B. demand of good B. C. the quantity demanded of good A. D. the quantity demanded of good B.
7. A change in income will not lead to: A. a movement along the demand curve. B. a leftward shift of the demand curve. C. a rightward shift of the demand curve. D. all of the statements associated with the question are correct. 8. Good A is an inferior good, an increase in income leads to: A. a decrease in the demand for good B. B. a decrease in the demand for good A. C. an increase in the demand for good A. D. no change in the quantity demanded of good A. 9. Which of the following is probably not a normal good? A. designer dresses. B. lobster. C. macaroni and cheese. D. expensive automobiles. 10. An increase in the price of steak will probably lead to: A. an increase in demand for chicken. B. an increase in demand for steak. C. no change in the demand for steak or chicken. D. an increase in the supply for chicken. 11. Which of the following pairs of goods are probably complements? A. televisions and roller skates. B. frozen yogurt and ice cream. C. steak and chicken. D. hamburgers and ketchup. 12. If A and B are complements, an increase in the price of good A would: A. have no effect on the quantity demanded of B. B. lead to an increase in demand for B. C. lead to a decrease in demand for B. D. none of the statements associated with this question are correct. 13. Graphically, a decrease in advertising will cause the demand curve to: A. become steeper. B. shift rightward. C. become flatter. D. shift leftward.
14. Persuasive advertising influences demand by: A. providing information about the availability of a product. B. offering reduced prices for the product. C. altering the underlying tastes of consumers. D. none of the statements are correct. 15. Which of the following can explain an increase in the demand for housing in retirement communities?
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