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Micro quiz

Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

 1. 
A demand curve is
a.
the downward-sloping line relating the price of the good to the quantity demanded.
b.
the upward-sloping line relating price to quantity supplied.
c.
the curve that relates income to quantity demanded.
d.
showing the same relationship between two goods as a production possibilities frontier.
 
 
Figure 4-1
micro_files/i0030000.jpg
 

 2. 
Refer to Figure 4-1. The movement from point A to point B on the graph would be caused by
a.
an increase in price.
b.
a decrease in price.
c.
a decrease in the price of a substitute good.
d.
an increase in income.
 

 3. 
Refer to Figure 4-1. The movement from point A to point B on the graph shows
a.
a decrease in demand.
b.
an increase in demand.
c.
a decrease in quantity demanded.
d.
an increase in quantity demanded.
 

 4. 
Which of the following would NOT shift the demand curve for a good or service?
a.
a change in income
b.
a change in the price of the good or service
c.
a change in expectations about the price of the good or service
d.
a change in the price of a related good
 

 5. 
If the number of buyers in the market decreases, the
a.
demand in the market will increase.
b.
demand in the market will decrease.
c.
supply in the market will increase.
d.
supply in the market will decrease.
 

 6. 
Suppose that the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for
a.
hair gel to increase.
b.
razors to increase.
c.
combs to increase.
d.
hair dye for men to increase.
 

 7. 
Once the demand curve for a product or service is drawn, it
a.
can shift either right or left.
b.
remains stable over time at a given price.
c.
is possible to move up or down the curve, but the curve will not shift.
d.
None of the above is possible.
 

 8. 
A very hot summer in Atlanta will cause the demand for lemonade to
a.
shift to the left.
b.
shift to the right.
c.
remain stable but we would move down the curve.
d.
remain stable but we would move up the curve.
 

 9. 
What is the law of demand?
a.
When the price of a good falls, buyers respond by purchasing more.
b.
When income levels increase, buyers respond by purchasing more.
c.
When buyers tastes for the good increase, they purchase more of the good.
d.
When the price of a good or service rises, buyers respond by purchasing more.
 
 
Figure 4-2
micro_files/i0120000.jpg
 

 10. 
Refer to Figure 4-2. The movement from D to D1 is called
a.
an increase in demand.
b.
a decrease in demand.
c.
a decrease in quantity demanded.
d.
an increase in quantity demanded.
 

 11. 
Refer to Figure 4-2. The movement from D to D1 could be caused by
a.
an increase in price.
b.
a decrease in the price of a complement.
c.
an increase in technology.
d.
a decrease in the price of a substitute.
 

 12. 
Refer to Figure 4-2. If the demand curve shifts from D1 to D, then
a.
firms would be willing to supply less than before.
b.
people are less willing to buy the product at any price than before.
c.
people are now more willing to buy the product at any price than before.
d.
the price of the product has decreased, causing consumers to buy more of the product.
 

 13. 
When quantity demanded has increased at every price, it might be because
a.
the number of buyers in the market has decreased.
b.
income has increased and this good is an inferior good.
c.
the consumer prefers another good more than this good.
d.
the price of a substitute good has increased.
 
 
Figure 4-3
micro_files/i0170000.jpg
 

 14. 
Refer to Figure 4-3. The graph shows the demand for cigarettes. Which most likely happened?
a.
The price of marijuana, a complement to cigarettes, rose.
b.
Mandatory health warnings were placed on cigarette packages.
c.
Several foreign countries banned U.S. cigarettes in their countries.
d.
A tax was placed on cigarettes.
 

 15. 
The relationship between price and quantity supplied is
a.
negative, or inverse.
b.
positive, or direct.
c.
nonexistent.
d.
the same as the relationship between price and quantity demanded.
 

 16. 
Other things equal, when the price of a good rises, the
a.
quantity demanded of the good increases.
b.
supply increases.
c.
quantity supplied of the good rises.
d.
demand curve shifts to the left.
 

 17. 
A market supply curve is determined by
a.
vertically summing individual supply curves.
b.
horizontally summing individual supply curves.
c.
finding the average quantity supplied of the market's individual supply curves.
d.
Unlike market demand, there is no such thing as a market supply curve.
 

 18. 
Other things equal, when the price of a good rises, the quantity supplied of the good also rises. This is the law of
a.
increasing costs.
b.
diminishing returns.
c.
supply.
d.
demand.
 

 19. 
A supply curve slopes upward because
a.
as more is produced, total cost of production falls.
b.
an increase in input prices increases supply.
c.
a decrease in input prices decreases supply.
d.
an increase in price gives producers incentive to supply a larger quantity.
 
 
Figure 4-5
micro_files/i0240000.jpg
 

 20. 
Refer to Figure 4-5. The movement from point A to point B on the graph would be caused by
a.
a decrease in the price of the good.
b.
an increase in the price of the good.
c.
an increase in technology.
d.
a decrease in input prices.
 

 21. 
Suppose there is an increase in input prices. We would expect supply
a.
to decrease.
b.
to increase.
c.
could increase or decrease.
d.
to remain unchanged.
 

 22. 
The unique point at which the supply and demand curves intersect is called
a.
market unity.
b.
an agreement.
c.
cohesion.
d.
equilibrium.
 

 23. 
If, at the current price, there is a shortage of a good,
a.
sellers are producing more than buyers wish to buy.
b.
the market must be in equilibrium.
c.
the price is below the equilibrium price.
d.
quantity demanded equals quantity supplied.
 
 
Figure 4-7
micro_files/i0290000.jpg
 

 24. 
Refer to Figure 4-7. Equilibrium price and quantity are
a.
$35,200.
b.
$35,600.
c.
$25,400.
d.
$15,200.
 

 25. 
Refer to Figure 4-7. At a price of $35,
a.
there would be a shortage of 400 units.
b.
there would be a surplus of 200 units.
c.
there would be a surplus of 400 units.
d.
the market would be in equilibrium.
 

 26. 
Refer to Figure 4-7. At a price of $15,
a.
there would be a shortage of 400 units.
b.
there would be a surplus of 400 units.
c.
there would be a shortage of 200 units.
d.
the market would be in equilibrium.
 

 27. 
Refer to Figure 4-7. At the equilibrium price,
a.
200 units would be supplied and demanded.
b.
400 units would be supplied and demanded.
c.
600 units would be supplied and demanded.
d.
600 units would be supplied, but only 200 would be demanded.
 

 28. 
Refer to Figure 4-7. At a price of $35,
a.
a shortage would exist and the price would tend to fall.
b.
a surplus would exist and the price would tend to rise.
c.
a surplus would exist and the price would tend to fall.
d.
the market would be in equilibrium.
 
 
Figure 4-10
micro_files/i0350000.jpg
 

 29. 
Refer to Figure 4-10. Which of the four graphs represents the market for peanut butter after a major hurricane hits the peanut-growing south?
a.
A
b.
B
c.
C
d.
D
 

 30. 
Refer to Figure 4-10. Which of the four graphs represents the market for winter boots in June?
a.
A
b.
B
c.
C
d.
D
 

 31. 
Refer to Figure 4-10. Which of the four graphs represents the market for pizza delivery in a college town in September?
a.
A
b.
B
c.
C
d.
D
 

 32. 
Refer to Figure 4-10. Which of the four graphs represents the market for cars after new technology was installed on assembly lines?
a.
A
b.
B
c.
C
d.
D
 

 33. 
Refer to Figure 4-10. Graph A shows which of the following?
a.
an increase in demand
b.
an increase in quantity demanded
c.
an increase in quantity supplied
d.
All of the above are correct.
e.
Both a and c are correct.
 

 34. 
Refer to Figure 4-10. Graph C shows which of the following?
a.
an increase in demand
b.
an increase in quantity demanded
c.
an increase in supply
d.
All of the above are correct.
e.
Both b and c are correct.
 

 35. 
Refer to Figure 4-10. Which of the four graphs shown illustrates an increase in quantity supplied?
a.
A.
b.
B.
c.
C.
d.
D.
 

 36. 
Refer to Figure 4-10. Which of the four graphs shown illustrates a decrease in quantity demanded?
a.
A.
b.
B.
c.
C.
d.
D.
 

 37. 
If the demand for a product increases, we would expect equilibrium price
a.
to increase and equilibrium quantity to decrease.
b.
to decrease and equilibrium quantity to increase.
c.
and equilibrium quantity to both increase.
d.
and equilibrium quantity to both decrease.
 

 38. 
If the demand for a product decreases, we would expect equilibrium price
a.
to increase and equilibrium quantity to decrease.
b.
to decrease and equilibrium quantity to increase.
c.
and equilibrium quantity to both increase.
d.
and equilibrium quantity to both decrease.
 

 39. 
If the supply of a product increases, we would expect equilibrium price
a.
to increase and equilibrium quantity to decrease.
b.
to decrease and equilibrium quantity to increase.
c.
and equilibrium quantity to both increase.
d.
and equilibrium quantity to both decrease.
 

 40. 
If the supply of a product decreases, we would expect equilibrium price
a.
to increase and equilibrium quantity to decrease.
b.
to decrease and equilibrium quantity to increase.
c.
and equilibrium quantity to both increase.
d.
and equilibrium quantity to both decrease.
 



 
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