Quiz 2

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Chapter 3: Demand and Supply

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Quiz 2

Quiz 2

This activity contains 10 questions.

Other things remaining equal, the law of supply says that

higher prices will lead to a greater quantity supplied and lower prices to a lesser quantity supplied.increases in prices will lead to increases in profits.an increase in the wage rate will lead to a decrease in supply.higher prices will lead to a lesser quantity supplied and lower prices to a greater quantity supplied.

Match the graph to the situation being described.

A. Negatively sloped line shifts right. B. Positively sloped line shifts right. C. Point moves on negatively sloped line. D. Point moves on positively sloped line.

A. Negatively sloped line shifts right. B. Positively sloped line shifts right. C. Point moves on negatively sloped line. D. Point moves on positively sloped line.

Using the pull-down menus, match each item in the left column to the corresponding item in the right column.


	Graph B.

	Graph D.

	Graph A.

	Graph C.

2.1 Change in demand.

2.2 Change in quantity demanded.

2.3 Change in supply.

2.4 Change in quantity supplied.

If the cost of shoes is $10 a pair, and a shirt costs $5, what happens to the relative and money prices of shoes and shirts if shoes increase to $12 a pair and shirts rise to $10?

The money price of shoes and shirts have fallen and the relative price of shirts has risen.The money price of shoes and shirts have risen and the relative price of shoes has fallen.The money price of shoes and shirts have risen and the relative price of shirts has fallen.The money price of shoes and shirts have fallen and the relative price of shoes has risen.The money and relative prices of shoes and shirts have not changed.

	2007	2008
Econ Textbook	$95	$100
CD Tutorial	$50	$55
Newspaper Subscription	$70	$77

In terms of the textbook, the 2007 relative price of the tutorial and the subscription respectively are

1.9 and 1.36 textbooks.0.53 and 0.74 textbooks.$50 and $70.1.1 and 1.06 textbooks..91 and .94 textbooks.

	2007	2008
Econ Textbook	$95	$100
CD Tutorial	$50	$55
Newspaper Subscription	$70	$77

In terms of the textbook, from 2007 to 2008,

the relative price of both the subscription and the tutorial increased.the relative price of the tutorial increased and the relative price of the subscription fell.the relative price of the subscription increased and the relative price of the tutorial fell.the relative price of both the subscription and the tutorial fell.

Which of the following factors determine whether a good is normal or inferior?

incomeexpectationstastes and preferencesproduction costsprices of related goods

All of the following will shift the demand curve for autos EXCEPT

a reduction in the price of autos.a change in consumers' income.a sharp increase in the price of airline travel.an expected future increase in the price of autos.a decrease in the cost of auto insurance.

Equilibrium occurs where

a surplus exists.quantity demanded equals quantity supplied.quantity demanded is less than quantity supplied.quantity demanded is greater than quantity supplied.a shortage exits.none of the above.

Which of the following is consistent with the law of demand?

The consumer alone determines the equilibrium price in the market.There is a positive relationship between price and quantity supplied.There is no relationship between price and quantity demanded since consumers would purchase whatever producers provide at the market price.There is a negative relationship between price and quantity demanded.None of the above are true.

Demand Schedules of Different Customer Groups

	A	B	C	D
$10	0	0	1	1
$9	0	1	2	3
$8	1	3	3	5
$7	2	5	4	8
$6	3	7	5	11
$5	4	9	6	15
$4	5	11	7	20

The table above indicates the demand schedules for four types of consumers.

Suppose there are 2000 A-customers, 3000 B-customers, 3000 C-customers, and 2000 D-customers. The market quantity demanded at price $6 is

75,000.26,000.25,000.26.64,000.

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