Econ Chapter 3

2 October 2022
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question
Which of the following good is an inferior​ good? A. When consumer income​ decreases, the demand for public transit decreases. B. When consumer income​ increases, the demand for tea increases. C. When consumer income​ increases, the demand for eggs decreases. D. When consumer income​ decreases, the demand for aspirin is unchanged.
answer
C. When consumer income​ increases, the demand for eggs decreases.
question
Which of the following will cause the demand curve to​ shift? A. more firms in the market B. a change in consumer income C. a change in the cost of raw materials D. newer technology and improved productivity
answer
B. a change in consumer income
question
An increase in the price of a complement good Y will lead to A. an outward shift in the supply of good X. B. an outward shift in the demand for good X. C. an inward shift in the supply of good X. D. an inward shift in the demand for good X.
answer
D. an inward shift in the demand for good X.
question
Which of the following would cause a decrease in the demand for fish​? A. A decrease in the number of firms in the market. B. An increase in consumer incomes ​(fish is a normal​ good). C. An increase in the price of fish. D. A decrease in the price of chicken​, a substitute for fish.
answer
A decrease in the price of chicken​, a substitute for fish.
question
The price of touch screens used in smartphones declines. This will cause​ a(n) A. increase in supply. B. increase in quantity supplied. C. decrease in supply. D. decrease in quantity supplied.
answer
increase in supply.
question
Which of the following will cause an outward​ (rightward) shift in​ supply? A. The cost of an input increases. B. A technological improvement. C. A decline in labor productivity. D. A reduction in consumer incomes.
answer
A technological improvement.
question
Assume the cost of aluminum used by​ soft-drink companies increases. Which of the following correctly describes the resulting effects in the market for canned soft​ drinks? I. The demand for soft drinks decreases. II. The quantity of soft drinks demanded decreases. III. The supply of soft drinks decreases. IV. The quantity of soft drinks supplied decreases.
answer
II. and III.
question
In a price system relative prices do not signal information about changes in market conditions. relative prices change constantly to reflect changes in supply and demand. relative prices are set by central planners based on projected supply and demand. relative prices change infrequently due to transactions costs.
answer
relative prices change constantly to reflect changes in supply and demand.
question
The condition that exists when quantity supplied exceeds quantity demanded at the current price is known as __________. an equilibrium condition a shortage or excess demand an auction a surplus or excess supply
answer
a surplus or excess supply
question
Which of the following will cause an outward (rightward) shift in supply? A technological improvement. The cost of an input increases. A reduction in consumer incomes. A decline in labor productivity.
answer
A technological improvement.
question
Washington state had a bumper apple crop this year, significantly increasing the supply of apples in the U.S. Given this information, choose the statement that correctly describes the effect on the U.S. apple market. The quantity of apples demanded will increase at every price. The demand for apples will increase as the price of apples falls. The quantity of apples demanded will increase as the price of apples falls. The quantity of apples supplied will increase at every price, increasing the price of apples.
answer
The quantity of apples demanded will increase as the price of apples falls.
question
Economists assume that when there is a change in demand and/or supply, that prices reach a new equilibrium: quickly. slowly. after an adjustment period that varies. after a protracted negotiation process.
answer
after an adjustment period that varies.