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Macro Econ HW

The document contains multiple choice questions about supply and demand diagrams and concepts. It asks the reader to identify equilibrium prices and quantities based on graphs, determine factors that would cause shifts in supply or demand curves, and explain how markets would react to changes in price levels.

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timpennington
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2K views8 pages

Macro Econ HW

The document contains multiple choice questions about supply and demand diagrams and concepts. It asks the reader to identify equilibrium prices and quantities based on graphs, determine factors that would cause shifts in supply or demand curves, and explain how markets would react to changes in price levels.

Uploaded by

timpennington
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Refer to the above diagram, which shows three supply curves for corn.

Which of the following would cause the change in the supply of corn illustrated by the shift from S1 to S2? Answer

A. A decrease in consumer incomes B. An increase in the price of fertilizer C. A change in consumer tastes away from cornbread D. The development of a more effective insecticide for corn rootworm

Which statement is true about supply? Answer

A. There is an inverse relationship between product price and quantity supplied B. There is some price at which quantity supplied of a product is negative C. To entice producers to offer more of a product on the market for sale, product price must rise D. As product price decreases, producers are willing to put more of the good on the market for sale

An increase in the demand for computers indicates that: Answer

A. More will be demanded because sellers are selling more B. More will be purchased because sellers are putting them on sale C. More will be purchased even if prices stayed the same D. More will be demanded at lower prices

Refer to the above diagram illustrating the market for corn. The equilibrium price and quantity in this market are: Answer

A. $2/bushel and 11,000 bushels B. $4/bushel and 10,000 bushels C. $3/bushel and 8,000 bushels D. $2/bushel and 4,000 bushels

Refer to the above diagram illustrating the market for corn. If the price in this market is at $4 per bushel, then there will be a: Answer

A. Shortage and the price will tend to rise B. Surplus and the price will tend to rise C. Surplus and the price will tend to fall D. Shortage and the price will tend to fall

Refer to the above diagram. If the price were $2 per gallon, there would be a: Answer

A. Shortage of 10 million gallons B. Surplus of 8 million gallons C. Shortage of 8 million gallons D. Surplus of 10 million gallons

Which would cause an increase in the demand for product A? Answer

A. A decrease in the cost of producing product A B. A decrease in the price of a substitute product B C. A decrease in the price of product A D. A decrease in the price of a complementary product B

Refer to the four graphs above. Select the graph that best shows the changes in demand and supply in the market specified in the following situation: In the market for home heating oil, if consumers experience a severely cold and long winter, and heating oil producers pay higher prices for crude oil. Answer

A. Graph C B. Graph A C. Graph D D. Graph B

As a result of a fall in the price of gasoline, consumers can afford to take more driving trips. This is an illustration of: Answer

A. The substitution effect B. Diminishing marginal utility C. The rationing function of prices D. The income effect

A leftward shift of the supply curve for oil in the United States is most likely to result from: Answer

A. A decrease in the fees that oil companies must pay for drilling licenses B. An increase in the costs of exploration and drilling for oil C. An increase in the subsidy for oil exploration and drilling D. A decrease in the world price of oil

Which would cause a rightward shift in the supply curve for telephone service? Answer

A. A decrease in the wages of telephone workers B. An increase in the price of telephones C. An increase in the taxes paid by telephone companies D. A decrease in a subsidy given to telephone companies

When a shortage of a commodity occurs, we would expect to find that: Answer

A. Buyers will tend to bid its price up B. Competition in the market will drive price down C. The quantity demanded of the good is less than the quantity supplied D. The prevailing price of the good is above the equilibrium price

Refer to the above diagram, which shows three demand curves for coffee. Which of the following would cause a shift in coffee demand from D1 to D3? Answer

A. A decrease in the prices of cream and sugar B. A scientific report stating that coffee improves memory C. A technological improvement in the production of coffee D. A decrease in the price of tea

A higher price reduces the quantity demanded for a product because: Answer

A. Individuals will buy more of the product and less of its substitutes B. The purchasing power of individuals increases C. Individuals can afford less of the product and will switch to substitutes D. The financial assets of individuals increase

Refer to the above graph with three demand curves. An increase in price, other factors constant, would cause a change from: Answer

A. Point 4 to point 5 B. Point 1 to point 5 C. Point 2 to point 4 D. Point 3 to point 6

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