Week 2 Quiz Review Question Preview (ID: 21602)


This Game Set Should Help You Study For The Week 2 Quiz. TEACHERS: click here for quick copy question ID numbers.

The demand curve shows the relationship between
a) Costs and Revenues.
b) Income and Expenses
c) Price and Quantity Demanded
d) Price and Cost.

When the price of a product goes up, people buy less. This is because
a) People will substitute other goods that are relatively less expensive for the more expensive product.
b) The Law of Supply.
c) Their real income increases.
d) People will substitute other goods that are relatively more expensive for the less expensive products.

Which of the following will not cause the demand curve for a product to shift?
a) An increase in consumer income.
b) An increase in the price of the product,
c) A decrease in the cost of a substitute good.
d) A successful advertising campaign aimed at increasing the number of people purchasing the product.

Which of the following would not shift the demand curve for chicken?
a) An advertising campaign proclaiming the health advantages of eating a diet high in chicken.
b) An increase in consumer income.
c) An increase in the price of chicken.
d) An increase in the price of beef.

A manager at the local poster and print shop recently found that the consumer income for his area has increased. He told his production staff to prepare for increased sales. He is basing this on the assumption that
a) Posters and printing services are normal goods.
b) Posters and printing services are inferior goods.
c) Posters and printing services are complementary goods.
d) Posters and printing services are substitute goods.

If the price of peanut butter increases, we can assume that the demand curve for jelly (a complement good) will
a) Will shift to the left.
b) Will shift to the right.
c) Will remain unchanged
d) Will experience extreme price fluctuations.

When we were young and newly married, we ate lots of Ramen Noodles and boxed Mac n Cheese. As our income increased, we ate less and less of these products. These products are most likely
a) Normal goods.
b) Inferior goods.
c) Complementary goods.
d) Substitute goods.

Everything else held constant, which of the following would be likely to shift the demand for a swing set to the left?
a) An increase in consumer income.
b) An increase in consumer taxes.
c) A decrease in consumer income.
d) An expectation that future prices will be higher than current prices.

Which of the following would most likely increase the demand for propane.
a) An increase in the number of suppliers.
b) A substantial decrease in the price for propane.
c) A substantial increase in the price of electricity.
d) A new transport system that streamlines propane transport cutting the cost of the product drastically.

In which of the following statements are the terms demand and quantity demanded used correctly.
a) The increase in the price of spaghetti sauce caused the quantity demanded to fall and the demand for spaghetti to decrease.
b) The increase in the price of spaghetti sauce caused the demand to fall and the quantity demanded of spaghetti to decrease.
c) The increased cost of gas caused the demand for it to fall over the holiday season.
d) As the supply of gas increased causing the price to fall, the demand increased.

The supply curve will shift to the left when
a) A decrease in consumer income.
b) Consumers expect the future price to fall.
c) The number of suppliers decreases.
d) Taxes are cut.

Let's assume that there is a drought that damages a good portion of the strawberry plants. This will affect multiple seasons. Also, let's assume that grapes are a substitute for strawberries. We would expect the price of strawberries to
a) rise, and the price of grapes to rise.
b) rise, and the price of grapes to fall.
c) rise, and the price of grapes to stay the same.
d) fall, and the price of grapes to fall.

Let's assume that the price of wheat is rising and farmers expect it to keep rising relative to other crops. We should expect
a) The supply of wheat bread to increase.
b) The demand for wheat to fall.
c) The supply of wheat to increase as farmers plant more.
d) The supply of wheat to fall as farmers plant more of other crops.

The equilibrium price and equilibrium quantity are found where
a) Quantity demanded is greater than quantity supplied.
b) Quantity demanded is equal to quantity supplied.
c) Quantity demanded is less than quantity supplied.
d) Marginal benefit is equal to marginal cost.

If equilibrium price is $8 for a product and the current price is set by the government at $6
a) A surplus would exist because quantity supplied would be greater than quantity demanded.
b) A shortage would exist because quantity supplied would be greater than quantity demanded.
c) A surplus would exist because quantity supplied would be less than quantity demanded.
d) A shortage would exist because quantity supplied would be less than quantity demanded.

At the point where demand and supply intersect
a) The selling price does not have to equal the buying price.
b) A surplus or a shortage may exist based on the whether or not there is a lot of competition.
c) The amount buyers want to purchase and the amount suppliers want to sell is the same.
d) The market may or may not be in equilibrium.

A surplus occurs when the price of the product
a) is above the equilibrium price and quantity demanded exceeds quantity supplied.
b) is above the equilibrium price and the quantity supplied exceeds quantity demanded.
c) is below the equilibrium price and the quantity demanded exceeds quantity supplied.
d) is below the equilibrium price and the quantity supplied exceeds quantity demanded.

There are two ice cream shops in town - Barry's and Elaine's. The current price of ice cream at both shops is $5 per gallon and both shops are selling out. We should expect
a) both to increase their prices and decrease their quantity supplied.
b) both to increase their prices and increase their quantity supplied.
c) both to decrease their prices and increase their quantity supplied.
d) both to decrease their price and decrease their quantity supplied.

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