Quiz 3

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Chapter 3: Demand and Supply

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Quiz 3

Quiz 3

This activity contains 10 questions.

	Money Prices
	2007	2008
Hospital Room (1 day)	$200	$225
Hotel Suite (1 night)	$300	$325

Based on the table above, which of the following is true about the price changes from 2007 to 2008?

The money prices of both goods increased.The money prices of both goods decreased.The money prices of both goods increased and the relative prices of both goods decreased.The money prices of both goods increased and the relative prices of both goods increased.

	Money Prices
	2007	2008
Hospital Room (1 day)	$200	$225
Hotel Suite (1 night)	$300	$325

Based on the table above, the relative price of a hospital room in 2007 was _______.

1.5 hotel suites.67 hotel suites1.5 hospital rooms.67 hospital rooms

Which of the following contradicts the law of demand?

The State of Washington has lower electrical costs than Washington D.C. does therefore, per capita electricity use is greater in the State of Washington than in Washington, D.C.Airplanes flew with more passengers after the deregulation of airlines.A doubling of the price of salt led to only a 5 percent reduction in the purchases of salt.An increase in the supply of oranges causes a decrease in the consumption of oranges.

Which of the following will not cause a change in demand?

A decrease in the price of the goodAn increase in the price of a substituteA decrease in the price of a complementA decrease in incomeAll of the following will lead to a change in demand.

Suppose you graduate and accept employment at a substantially higher level of income than you currently receive. You also observe that your demand for macaroni-based meals has decreased. From this you conclude that

macaroni is an inferior good.macaroni is a normal good.macaroni is an abnormal good.none of the above are true.

Which of the following events would increase the supply of hot dogs?

An increase in the price of a hot dog occurs.An increase in demand for hot dogs.An increase in the number of consumers of hot dogs.A news release which give the true ingredients of a hot dog.The price of the ingredients used to produce hot dogs decreases.All of the above will lead to an increase in the supply of hot dogs.

In free markets, the result of a shortage is

the reduction of the demand for the good.an increase in the price.a decrease in the price.the increase in the demand for the good.an increase the quantity demanded of the good.

The market for wheat temporarily gets out of equilibrium with the market price increasing above equilibrium. The immediate effect of this is that

quantity demanded will increase, quantity supplied will decrease, and there will be a shortage.quantity demanded will decrease, quantity supplied will increase, and there will be a surplus.demand will decrease, supply will increase, and there will be a surplus.demand will increase, supply will increase, and a new equilibrium will be found.none of the above will be true.

"Because we live in a world of scarcity, we also live in a world of shortages." This statement is

true because shortages cause scarcity.false because shortages will not exist as long as price is allowed to move to its market-clearing level but scarcity will always exist.false because we live in a world of shortages but not of scarcity.true because scarcity and shortages mean the same thing.

Match the following phrases to the appropriate graph.

Image of four graphs. A. Demand shifts right. B. Demand shifts left. C. Supply shifts right. D. Supply shifts left.

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


	Graph D

	Graph B

	Graph A

	Graph C

10.1 An increase in demand and an increase in quantity supplied.

10.2 A decrease in demand and a decrease in quantity supplied.

10.3 An increase in supply and an increase in quantity demanded.

10.4 A decrease in supply and a decrease in quantity demanded.

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