Microeconomics Exam 1 Okada

In economics, scarcity refers to the situation of:

Which of the following is an example of a positive economic statement? A) Pollution is one of the most serious economic problems. B) Higher interest rates will encourage more savings. C) The pricing policies of monopolies should be strictly supervised. D) Unemployment is more harmful than inflation.

Which of the following is an example of a positive economic statement? A) An increase in income causes an increase in savings. B) The government should ideally work as a welfare state. C) Economics is the most useful social science. D) Eliminating poverty is more important than reducing inflation.

Which of the following is an example of a normative economic statement? A) A cut in the tax rate will lead to an increase in consumption. B) An increase in subsidies to farmers will boost agricultural production. C) A relaxation in import duties will encourage imports. D) An increase in social security benefits will increase the welfare of all economic agents.

Which of the following is an example of a normative economic statement? A) An increase in income is accompanied by an increase in consumption. B) An increase in income is accompanied by an increase in savings. C) An increase in the money supply will lead to an increase in the inflation rate. D) An increase in government expenditure will lead to an increase in well-being.

Which of the following is an example of a topic studied by microeconomists? A) Nationwide inflation rate B) Economic growth as a means to alleviate poverty C) Aggregate demand and aggregate supply in an economy D) Energy consumption by a firm

Which of the following is an example of a topic studied by macroeconomists? A) Decision making by a producer B) Aggregate demand in an economy C) Appropriateness of nationwide ethanol subsidies D) Price determination by a firm

Which of the following is an example of a topic studied by macroeconomists? A) Savings of a single household B) Price determination by a multinational corporation C) Productivity of an agricultural farm D) Total output of an economy

Which of the following statements is true? A) Macroeconomics studies how individuals make choices. B) The study of the inflation rate is covered under microeconomics. C) Microeconomics is the study of an economy as a whole. D) The study of the unemployment rate is covered under macroeconomics.

Understanding the impact of carbon taxes on the energy usage of individual households and firms is studied under: A) macroeconomics. B) microeconomics. C) financial economics. D) fiscal economics.

The relationship between a firm's advertising expenditure and its profit is studied under: A) macroeconomics. B) public economics. C) international economics. D) microeconomics.

A consumer has $20 that he wants to spend on two goods: pens priced at $2 each, and pencils priced at $1 each. Which of the following correctly represents his budget constraint? A) $20 = ($3/Quantity of pens + Quantity of pencils) B) $20 = ($2/Quantity of pens) + ($1/Quantity of pencils) C) $20 = $3 × (Quantity of pens - Quantity of pencils) D) $20 = ($2 × Quantity of pens) + ($1 × Quantity of pencils)

A consumer has $50 to spend. He has to decide between buying two goods: magazines priced at $5 each and DVDs priced at $10 each. Which of the following combinations of the two goods will exactly satisfy his budget constraint? A) 2 magazines and 4 DVDs B) 2 magazines and 2 DVDs C) 6 magazines and 1 DVD D) 3 magazines and 4 DVDs

A student has two options: she can either surf the web, or work part-time. Working part-time pays her $20 per hour. What is the student's opportunity cost of surfing the web for 5 hours? A) $20 B) $100 C) $4 D) $50

John has to choose between two jobs: one that offers him $50 per hour and one that offers him $35 per hour. The opportunity cost of choosing the job that offers him $50 per hour is: A) $85 per hour. B) $35 per hour. C) $15 per hour. D) $1.5 per hour.

If a job pays a wage of $50 per hour, but has a non-wage cost valued at $20 per hour, the net benifit of taking the job equals A) $70 per hour. B) $20 per hour. C) $2.5 per hour. D) $30 per hour.

Which of the following statements is true? A) A rational economic agent is not likely to optimize. B) Cost-benefit analysis does not yield the same result as optimization analysis. C) Cost-benefit analysis can also be used for normative economic analysis. D) The net benefit of an option that costs $50 and provides a benefit of $100 is equal to $150.

Which of the following will hold true if the market for cameras is in equilibrium at a price of $40? A) Buyers of cameras will want to buy fewer cameras than they are purchasing at equilibrium. B) Sellers of cameras will have an incentive to charge a price higher than $40. C) If the cost of producing cameras falls below $40 per camera, all sellers will stop supplying cameras. D) The quantity of cameras produced will equal the quantity of cameras bought in the market.

Empiricism refers to the process of: A) measuring variables. B) testing ideas using data. C) making choices using values and beliefs. D) collecting and organizing data.

If a number greater than the mean (average) of a series of observations is added to the series, the new mean is: A) same as the original mean. B) smaller than the original mean. C) greater than the original mean. D) either greater or smaller than the original mean depending on the number of observations in the series.

If a number equal to the mean (average) of a series of observations is added to the series, the new mean is: A) same as the original mean. B) smaller than the original mean. C) greater than the original mean. D) either greater or smaller than the original mean depending on the number of observations in the series.

Which of the following statements is true? A) Using fewer observations will strengthen the force of an empirical argument. B) The number of observations used does not affect the strength of an empirical argument. C) Using a large data set will strengthen the force of an empirical argument D) Empirical arguments can be supported without the use of data.

Which of the following statements is true? A) In the scientific method, anecdotes are more important than data. B) It is easier for a researcher to jump to a wrong conclusion when she uses a large data set. C) Arguments by example are appropriate when contradicting a blanket statement. D) Arguments based on anecdotes are always true.

Which of the following claims is most likely to suffer from reverse causality? A) More hours of study is likely to lead to better results. B) Crime rate is seen to be lower in countries having a higher level of poverty. C) Relatively wealthy people tend to be relatively healthy. D) Higher income increases consumption.

Which of the following is most likely to be an example of causation? A) A firm producing CFLs installs new machinery. The per-day production of CFLs increases. B) The crime rate is high in a country. The literacy rate is high as well. C) A soccer player scores 4 goals when he wears red socks. He concludes that the red socks helped him score the goals. D) A student wins money by scratching a ticket with a particular coin. He decides to scratch all tickets with the same coin in the future.

Which of the following pairs of variables are likely to be positively correlated? A) Education and unemployment B) Availability of health care and death rate C) Income and consumption D) Price and consumption

Which of the following relationships is likely to exhibit negative correlation? A) The relationship between the amount of precipitation in a year and the number of umbrellas sold B) The relationship between inflation in the U.S. and traffic congestion in China C) The relationship between amount saved with a bank and the interest earned D) The relationship between level of professional training and unemployment

Which of the following relationships is most likely to exhibit zero correlation? A) The relationship between education and income B) The relationship between income and savings C) The relationship between wind velocity and rotational speed of wind turbines D) The relationship between the amount received as unemployment benefits in China and the unemployment rate in Canada

Data show that in 2012, the college enrollment in Lithasia increased. In the same year, the sale of hotdogs in Lithasia also increased. The relationship between college enrollment and the sale of hotdogs exhibits: A) a causal relationship. B) a zero correlation. C) a positive correlation. D) a negative correlation.

Which of the following claims is most likely to suffer from reverse causality? A) Relatively wealthy people tend to be relatively healthy. B) Higher income increases consumption. C) More hours of study is likely to lead to better results. D) Crime rate is seen to be lower in countries having a higher level of poverty.

A researcher wants to test the effects of daily meditation on stress levels of individuals. She divides the participants randomly into a treatment group and into a control group and conducts an experiment. She pays for meditation classes for one-half of the subjects, and the other half does not join the class. Which of the following statements is true of the two groups in this experiment? A) The control group is the group of subjects that receives finance from the researcher to join the meditation class; the treatment group is the group that does not. B) The participants in the treatment group are assigned by chance, whereas the ones in the control group are assigned by choice. C) The participants in the control group are assigned by chance, whereas the participants in the treatment group are assigned by choice. D) The treatment group is the group of subjects that receives finance from the researcher for meditation classes; the control group is the group that does not.

Which of the following is an example of a natural experiment? A) A research on the effectiveness of a new medicine among some voluntary participants B) A research on the effect of air pollution on lung disorders by observing the health conditions of people who stay close to industrial areas and those who stay away from industries C) A study on the benefits of regular exercise by paying for the membership fees at fitness clubs for one-half of the participants D) A laboratory research on the effectiveness of solar power as an alternative source of fuel

Which of the following is a normative question? A) How much does government spending stimulate aggregate output? B) How often do banks fail? C) How do we calculate the total value of activity in an economy? D) What is the value of a human life?

Which of the following is a positive question? A) Can a monopoly ever be good for society? B) Are companies like Nike exploiting workers in the developing world? C) What are the returns to education? D) Is there value in putting yourself in someone else's shoes?

Which of the following is a normative question? A) How do we calculate the total value of activity in an economy? B) How often do banks fail? C) What is the value of a human life? D) How much does government spending stimulate aggregate output?

Which of the following is a normative question? A) Do people care about fairness? B) How do prices vary geographically? C) Can a monopoly ever be good for society? D) Is there discrimination in the labor market?

An independent variable: A) cannot be represented on a bar chart. B) in an experiment is determined by the other variables. C) cannot be measured. D) is manipulated by the experimenter in an experiment.

On a line chart, the income of a consumer is measured along the horizontal axis, and his consumption is measured along the vertical axis. The slope of the line is equal to: A) change in consumption minus change in income. B) change in consumption plus change in income. C) change in consumption divided by change in income. D) change in consumption multiplied by change in income.

As the number of advertisements of a firm increases from 100 to 500, its sales increases from $1,000 to $10,000. If this information is plotted on a line chart, the slope of the line equals: A) $20. B) $30.33. C) $22.5. D) $0.044.

1) Which of the following is NOT a step involved in optimization in levels? A) Calculating the total net benefit of each alternative B) Converting all costs and benefits into a common value of measurement C) Calculating the marginal consequences of moving between alternatives D) Choosing the alternative with the highest net benefit

If an alternative provides a benefit of $8 to an individual at a cost of $6, the net benefits of the alternative equal: A) $0.75. B) $48. C) $2. D) $14.

When optimizing in levels, if the ________ exceeds the ________, Project A is chosen over Project B. A) marginal benefits of Project B; marginal benefits of Project A B) marginal cost of Project A; marginal costs of Project B C) total benefits of Project A; total benefits of Project B D) net benefits of Project A; net benefits of Project B

If the ________ minus the ________ is positive, Project A is chosen over Project B. A) net benefit of Project A; net benefit of Project B B) total benefit of Project B; total benefit of Project A C) cost of Project A; cost of Project B D) net benefit of Project B; net benefit of Project A

If the net benefit of Project A is $20 and that of Project B is $15, switching from Project A to Project B: A) increases the net benefit by $5. B) increases the net benefit by $15. C) reduces the net benefit by $5. D) reduces the net benefit by $15.

If the net benefit of Project A is $10 and that of Project B is $12, which of the following statements is true? A) Switching from Project A to Project B reduces the net benefit by $2. B) Switching from Project A to Project B increases the net benefit by $1.2. C) An individual can optimize by choosing Project B. D) An individual can optimize by choosing Project A.

If Project A has a cost of $5, and a provides a benefit of $10, and Project B has a cost of $2, and provides benefit of $4, then switching from Project A to Project B: A) increases the net benefit by $3. B) increases the net benefit by $6. C) decreases the net benefit by $6. D) decreases the net benefit by $3.

If Project A has a cost of $2, and provides a benefit of $3, and Project B has a cost of $ 5 and provides a benefit of $8, which of the following statements is true? A) An individual can optimize by choosing Project B. B) A shift from Project A to Project B increases the net benefit by $1. C) Project A has a higher net benefit than Project B. D) The net benefit of Project A is $5.

If Project X has a cost of $6 and provides a benefit of $10, and Project Y has a cost of $25 and provides a benefit of $27, which of the following statements is true? A) An individual can optimize by choosing Project X. B) Switching from Project Y to Project X decreases net benefit by $2. C) Switching from Project X to Project Y increases net benefit by $2. D) An individual can optimize by choosing Project Y.

If the opportunity cost of time is ________, and an individual spends ________ commuting every month, his opportunity cost of commute is $100 every month. A) $12 per hour; 5 hours B) $8 per hour; 20 hours C) 10 per hour; 10 hours D) $5 per hour; 10 hours

If the opportunity cost of time is $20 per hour, and an individual spends 20 hours in commuting every month, his opportunity cost of commute is: A) $400 per month. B) $1 per month. C) $200 per month. D) $20 per month.

If the opportunity cost of time is ________, and an individual spends ________ commuting every month, his opportunity cost of commute is $100 every month. A) $12 per hour; 5 hours B) 10 per hour; 10 hours C) $8 per hour; 20 hours D) $5 per hour; 10 hours

If an individual's opportunity cost of commute is $300 per month and his monthly commuting time is 60 hours, his opportunity cost of time is: A) $30 per hour. B) $60 per hour. C) $5 per hour. D) $10 per hour.

Among a set of alternatives with the same benefits, an individual is said to optimize if she chooses an alternative that: A) has the highest indirect cost. B) has the highest total cost. C) has the lowest opportunity cost. D) has the lowest total cost.

An individual pays $100 every month as rent for an apartment, and his monthly opportunity cost of commuting from the apartment to his place of work is $40. Which of the following statements is then true? A) The indirect cost of renting the apartment is $140. B) The direct cost of renting the apartment is $40, whereas the indirect cost of renting the apartment is $100. C) The direct cost of renting the apartment is $140. D) The direct cost of renting the apartment is $100, whereas the indirect cost of renting the apartment is $40.

Which of the following statements is true? A) Comparative statics involves calculating the incremental cost of moving from one alternative to the next best alternative. B) Marginal analysis is the comparison of economic outcomes before and after some economic variable is changed. C) Marginal analysis is a key tool used while optimizing in levels. D) Comparative statics is a tool that can be used in both optimization in levels and optimization in differences.

Which of the following is an example of comparative statics? A) The estimation of the quantity demanded of a good when its price is $5. B) The estimation of the ideal number of workers a firm should hire, when wage rate is $20 per hour. C) The estimation of the supply of a good when the wage rate of labor changes from $30 to $10 per hour. D) The estimation of the demand for a particular good when consumer income is $10.

An individual rents an apartment for $200 per month. His monthly opportunity cost of commuting to work from this apartment is $50. After a year, he moves to an apartment closer to his place of work, but pays $250 as rent. Compared to the initial situation, after a year: A) his direct cost of renting the apartment remains the same, while the indirect cost of renting the apartment decreases. B) his direct cost of renting the apartment remains the same, while the indirect cost of renting the apartment increases. C) his direct cost of renting the apartment increases, while the indirect cost of renting the apartment remains unchanged. D) his direct cost of renting the apartment increases, while the indirect cost of renting the apartment decreases.

Assume that an individual has to decide between a two-day vacation and a three-day vacation to the same place. If he uses optimization in differences, he will: A) choose the three-day vacation only if the costs incurred on the third day exceed the benefits he receives. B) compare the total net benefits of both alternatives. C) spend more time to come to a decision than if he would have used optimization in levels. D) only think about the net benefits of the extra day.

Which of the following is an example of marginal analysis? A) To determine the optimal number of workers, a firm calculates the net benefits of hiring an extra worker. B) To determine the optimal amount of fertilizer to be used, a farmer calculates the total benefits of using a given amount of fertilizer. C) To determine the optimal output that a firm should sell, the manager calculates the total revenue earned by selling different levels of output. D) To choose the optimal apartment to rent, an individual estimates the net benefits of renting an apartment close to his place of work.

Which of the following statements is true of marginal analysis? A) Marginal analysis compares the consequences of doing one more step of something. B) Marginal analysis is a tool used in optimization in levels. C) Marginal analysis of alternatives will mostly give an outcome different from optimization in levels. D) Marginal analysis involves the calculation of total net benefits of all the available alternatives.

If the total cost incurred in hiring ten workers by a firm is $45, and the total cost incurred when the eleventh worker is hired is $60, the marginal cost of hiring the eleventh worker is: A) $15. B) $105. C)$1.33 D)$20

If the marginal rent cost of moving from Apartment 1 to Apartment 2 is -$60 and marginal commuting cost of moving from Apartment 1 to Apartment 2 is $40: A) moving from Apartment 1 to 2 will cost the renter $60 more in rent but save $40 in commuting. B) moving from Apartment 1 to 2 will cost the renter $60 more in rent and $40 more in commuting. C) moving from Apartment 1 to 2 will save the renter $60 in rent but cost $40 more in commuting. D) moving from Apartment 1 to 2 will save the renter $60 more in rent and $40 more in commuting.

Suppose the market for cement is one where there are a large number of buyers and sellers, and everyone conducts transactions at a common market price. Which of the following statements is true about the structure of the cement market? A) All participants in the cement market set their own prices. B) All transactions in the cement market are likely to be involuntary. C) The cement market is free and competitive. D) The cement market is government regulated.

Which of the following statements correctly describes a competitive market? A) The market price for the same good varies from seller to seller. B) Sometimes, a single seller has the ability to dictate the market price. C) The market price is determined by the interaction of demand and supply. D) Buyers and sellers negotiate prices before making exchanges.

Jenny likes chocolates. One day, a friend offers her a chocolate bar and she is extremely happy on receiving it. As the day progresses, many other people also buy her chocolate. As she gets more and more chocolates, her excitement on receiving each bar is seen to gradually lessen. Which economic principle is reflected in this example? A) The Law of Increasing Willingness to Pay B) Aggregation of demand behavior C) The Law of Diminishing Marginal Benefit D) The Law of Equi-Marginal Utility

Which of the following best describes the difference between a demand curve and a demand schedule? A) A demand curve shows different quantities of a good demanded at different prices, whereas a demand schedule shows different quantities of a good demanded at different incomes. B) A demand curve is a graphical representation of the relationship between the quantity of a good and its price, whereas a demand schedule is a tabular representation. C) A demand curve shows different quantities of a good demanded at different incomes, whereas a demand schedule shows different quantities of a good demanded at different prices. D) A demand curve can be derived from a demand schedule, but a demand schedule cannot be derived from a demand curve.

Which of the following examples best describes the Law of Demand? A) When the price of bread doubles, John's consumption of bread halves. B) When the price of watches increases, a local manufacturer starts offering more watches for sale. C) When a new anti-tobacco commercial is released, the consumption of tobacco products decreases sharply. D) When John's income doubles, his telephone bill also doubles.

Which of the following statements is correct about the concept of willingness to pay? A) The willingness to pay is the lowest price that a buyer is willing to pay for an extra unit of a commodity. B) The willingness to pay for a commodity increases exponentially as the consumption of the commodity increases. C) If a consumer is consuming 10 units of a commodity and he is ready to pay $2 for the eleventh unit, his willingness to pay for the eleventh unit is $2. D) The willingness to pay for a commodity increases linearly as the consumption of the commodity increases.

The buyers of a good will want to purchase it as long as their willingness to pay for the good is: A) equal to zero. B) less than the price. C) greater than zero. D) greater than or equal to the price.

Jenny likes chocolates. One day, a friend offers her a chocolate bar and she is extremely happy on receiving it. As the day progresses, many other people also buy her chocolate. As she gets more and more chocolates, her excitement on receiving each bar is seen to gradually lessen. Which economic principle is reflected in this example? A) The Law of Diminishing Marginal Benefit B) Aggregation of demand behavior C) The Law of Equi-Marginal Utility D) The Law of Increasing Willingness to Pay

Which of the following examples best describes the Law of Diminishing Marginal Benefit? A) If a seller of notebooks in a perfectly competitive market charges above the market price, his profit decreases. B) If the weather gets cold, the demand for ice cream will fall. C) Each additional unit of ice cream that John consumes gives him more and more satisfaction. D) With each additional pen Jill buys, her willingness to pay for another pen decreases.

Which of the following factors is expected to cause the demand curve for coffee to shift to the right? A) A fall in the manufacturing cost of coffee B) A higher personal tax on the income of all consumers C) A higher tax on the sale of tea, a substitute for coffee D) An increase in the supply of coffee due to better weather

Assume that the economy is in a recession and consumers are expecting a fall in their income levels. This will cause a(n): A) decrease in the total quantity demanded of all goods. B) increase in the total quantity demanded of all goods. C) left shift in the market demand for all goods. D) right shift in the market demand for all goods

Which of the following is likely to cause the demand curve for cars to shift to the left? A) An increase in the cost of production leading to an increase in the price of cars B) A rise in the price of gasoline C) A rise in the price of cars D) An increase in the economy's national income

Which of the following is likely to shift the market demand curve for school textbooks to the right? A) An increase in the enrollment rates in high schools B) A fall in the total income of all consumers C) An increase in school tuition fees D) A fall in the price of school textbooks

Which of the following is likely to lead to an increase in the quantity supplied of steel? A) A rise in the market price of steel B) An increase in the productivity of capital due to technological innovation C) A fall in the wage rate of labor employed in the steel industry D) An expected increase in the demand for steel in the future

Which of the following examples best describes the Law of Supply? A) When the cost of production of cotton fell, the market price of cotton also fell. B) When the market price of pens increased, sellers started supplying fewer pens. C) When the cost of production of cotton increased, all suppliers' willingness to accept decreased. D) When the market price of pens increased, sellers started supplying more pens.

Which of the following is likely to lead to a right shift in the supply curve of cotton? A) An increase in the price of cotton B) A decrease in the price of cotton C) A rise in labor costs due to wage demands by labor unions D) An increase in labor productivity due to training programs

Which of the following is likely to lead to an increase in the quantity supplied of steel? A) An expected increase in the demand for steel in the future B) A fall in the wage rate of labor employed in the steel industry C) An increase in the productivity of capital due to technological innovation D) A rise in the market price of steel

Which of the following is likely to cause the supply curve for steel window frames to shift to the right? A) An increase in the wages of labor working in steel firms due to demands by trade unions B) A fall in the number of steel window frame producers due to factory lockouts C) A rise in the market price of steel window frames due to an increase in demand D) A decrease in the cost of production of steel due to a new subsidy

An expected increase in the market price of oil in the coming year is likely to: A) cause no changes in the demand and supply curves of oil in the current year. B) shift the supply curve of oil to the right in the current year. C) shift the demand curve for oil to the left in the current year. D) shift the supply curve of oil to the left in the current year.

Other things remaining same, a left shift in the demand curve will lead to: A) a decrease in the equilibrium price and an increase in the equilibrium quantity. B) an increase in the equilibrium price and a decrease in the equilibrium quantity. C) an increase in the equilibrium price and the equilibrium quantity. D) a decrease in the equilibrium price and the equilibrium quantity.

Which of the following statements correctly describes perfectly competitive market equilibrium? A) Multiple equilibriums are possible for a given set of demand and supply curves. B) Government intervention is necessary for the market to reach equilibrium. C) There is always excess supply or excess demand when the market is in equilibrium. D) Deviations from equilibrium are temporary and equilibrium is automatically restored.

A surplus occurs in a market when: A) the marginal cost of production is negligible. B) price is higher than the equilibrium price. C) price is lower than the equilibrium price. D) demand exceeds supply.

At a price of $1 per table, the quantity supplied of tables is 100 units whereas the quantity demanded is 70 units. Given this information, which of the following statements is true? A) $1 per table is the market clearing price. B) At $1 per table, there is a surplus in the market. C) $1 per table is the equilibrium price. D) At $1 per table, there is a shortage in the market.

In a perfectly competitive market, situations of surplus or shortage of a good: A) are self-corrected due to the competitive nature of the market. B) exist till the government or any ruling authority intervenes. C) are permanent phenomena. D) can exist simultaneously.

Other things remaining the same, a left shift in the supply curve will lead to: A) a decrease in the equilibrium price and an increase in the equilibrium quantity. B) a decrease in the equilibrium price and the equilibrium quantity. C) an increase in the equilibrium price and a decrease in the equilibrium quantity. D) an increase in the equilibrium price and the equilibrium quantity.

Other things remaining same, a left shift in the demand curve will lead to: A) an increase in the equilibrium price and the equilibrium quantity. B) an increase in the equilibrium price and a decrease in the equilibrium quantity. C) a decrease in the equilibrium price and an increase in the equilibrium quantity. D) a decrease in the equilibrium price and the equilibrium quantity.

Other things remaining same, a right shift in the demand curve will lead to: A) a decrease in the equilibrium price and the equilibrium quantity. B) an increase in the equilibrium price and a decrease in the equilibrium quantity. C) an increase in the equilibrium price and the equilibrium quantity. D) a decrease in the equilibrium price and an increase in the equilibrium quantity.

Z is a normal good. The equilibrium price and quantity of Z in the year 2011 was $25 and 60 units, respectively. In 2014, the equilibrium price of Z had increased to $35 and the equilibrium quantity had increased to 70 units. Other things remaining the same, which of the following could explain this change? A) Shift of the demand curve for Z to the right B) Shift of the demand curve for Z to the left C) Shift of the supply curve of Z to the right D) Shift of the supply curve of Z to the left

Z is a normal good. The equilibrium price and quantity of Z in the year 2011 was $25 and 60 units, respectively. In 2014, the equilibrium price of Z had increased to $35 but the equilibrium quantity had decreased to 50 units. Other things remaining the same, which of the following could explain this change? A) Shift of the demand curve for Z to the right B) Shift of the supply curve of Z to the right C) Shift of the supply curve of Z to the left D) Shift of the demand curve for Z to the left

Z is a normal good. The equilibrium price and equilibrium quantity of Z in the year 2011 was $25 and 60 units, respectively. In 2014, the equilibrium price of Z had decreased to $15 and the equilibrium quantity had also decreased to 50 units. Other things remaining the same, which of the following could explain this change? A) Shift of the demand curve for Z to the left B) Shift of the demand curve for Z to the right C) Shift of the supply curve of Z to the right D) Shift of the supply curve of Z to the left

Z is a normal good. The equilibrium price and equilibrium quantity of Z in the year 2011 was $25 and 60 units, respectively. It was seen that, in 2014, the equilibrium price of Z had decreased to $15, but the equilibrium quantity had increased to 70 units. Other things remaining the same, which of the following could explain this change? A) Shift of the supply curve of Z to the left B) Shift of the demand curve for Z to the right C) Shift of the demand curve for Z to the left D) Shift of the supply curve of Z to the right

If the demand and supply curves for a commodity shift to the right by the same amount, then in comparison to the initial equilibrium, the new equilibrium will be characterized by: A) a higher quantity and price. B) a lower quantity and a higher price. C) a higher quantity and the same price. D) the same quantity and a lower price.

If the demand and supply curves for a commodity shift to the right and the shift in demand is greater than the shift in supply, then in comparison to the initial equilibrium, the new equilibrium will be characterized by: A) a higher price and quantity. B) a lower price and quantity. C) a higher price and a lower quantity. D) the same price and quantity.

If the demand and supply curves for a commodity shift to the right and the shift in demand is greater than the shift in supply, then in comparison to the initial equilibrium, the new equilibrium will be characterized by:

Assume that the supply curve for a commodity shifts to the right and the demand curve shifts to the left, and the shift in demand is greater than the shift in supply. Then, in comparison to the initial equilibrium, the new equilibrium will be characterized by:

Assume that the supply curve for a commodity shifts to the right and the demand curve shifts to the left, both by the same degree. Then, in comparison to the initial equilibrium, the new equilibrium will be characterized by: A) a higher price and the same quantity. B) a lower price and quantity. C) a higher price and quantity. D) a lower price and the same quantity.

A price ceiling imposed by the government: A) is a tax that increases the market price of a good. B) involves pricing a commodity above the market price. C) can create situations of excess demand. D) helps in establishing equilibrium in case of shortage or surplus

Which of the following was an effect of the price ceiling placed on gasoline in the U.S. in the 1970s? A) Gas stations ran out of gas as the quantity of gas demanded exceeded the quantity supplied. B) Those who valued gas the most were able to buy gas under the price ceiling. C) Car owners started buying luxury cars that were less fuel-efficient as the price of gas was very low. D) The inventory of unsold gas increased and gas stations incurred losses.

A buyer is said to be a price taker if she: A) ignores the prices of related goods and considers only the price of the goods she is purchasing. B) can purchase any amount of a good at a fixed price provided she has the money to pay for it. C) can bargain over the prices of the goods she consumes. D) always pays less than the market-determined price for the goods she is consuming.

The general rule for benefit maximization suggests that in personal equilibrium: A) the ratio of marginal benefits to income should be identical across all goods. B) the ratio of marginal benefits to price should be identical across all goods. C) the ratio of total benefits to price should be identical across all goods. D) the ratio of total benefits to income should be identical across all goods.

If quantity of tea is measured on the horizontal axis and quantity of coffee is measured on the vertical axis, an increase in the price of coffee will cause the budget constraint to: A) pivot leftward along the vertical axis. B) pivot rightward along the horizontal axis. C) pivot rightward along the vertical axis. D) pivot leftward along the horizontal axis.