Reference no: EM13742655
1. If a portion of a demand curve obeys the law of demand, than that portion of the curve:
(a) slopes up and to the right.
(b) slopes down and to the right.
(c) is horizontal.
(d) is vertical.
2. If a portion of a supply curve obeys the law of supply, than that portion of the curve:
(a) slopes up and to the right.
(b) slopes down and to the right.
(c) is horizontal.
(d) is vertical.
3. According to the law of demand, the relationship between the quantity demanded of a good and its price is a relationship (ceteris paribus), so when graphed demand slopes .
A. positive; up
B. positive; down
C. negative; up
D. negative; down
4. According to the law of supply, the relationship between the quantity supplied of a good and its price is a relationship (ceteris paribus), so when graphed supply slopes .
A. positive; up
B. positive; down
C. negative; up
D. negative; down
Table 1:
Supply by company #1 Supply by company #2 Supply by company #3
P QS P QS P QS
($/lb.)(lbs./month)($/lb.)(lbs./month) ($/lb.)(lbs./month)
30 9 30 8 30 5
20 8 20 4 20 4
10 7 10 1 10 2
5. Suppose there are only 3 companies that supply a product to the market. Each company's supply is shown in Table 1 above. Fill in the table that's just below this question to show market supply of the good.
Market Supply
P QS
($/lb.)(lbs./month)
30
20
10
6. Suppose company #2 in Table 1 goes out of business. Fill in the table that's just below this question to show market supply of the good.
Market Supply
P QS
($/lb.)(lbs./month)
30
20
10
7. Consider your answers to questions 5 and 6. When company #2 went out of business supply
A. increased (the supply curve shifted to the right).
B. increased (the supply curve shifted to the left).
C. decreased (the supply curve shifted to the right).
D. decreased (the supply curve shifted to the left).
Table 2:
Demand by person #1 Demand by person #2 Demand by person #3
P QS P QS P QS
($/lb.)(lbs./month)($/lb.)(lbs./month) ($/lb.)(lbs./month)
36 2 36 8 36 5
24 4 24 4 24 4
12 6 12 1 12 2
8. Suppose there are only 3 people that demand a good. Each person's demand is shown in Table 2, above. Fill in the tablejust below this questionto show market demandforthe good.
Market Demand
P QD
($/ton)(tons/month)
36
24
12
9. Suppose person #1 in Table 2stops demanding the good. Fill in the just below this question to show market demandforthe good.
Market Demand
P QD
($/ton)(tons/month)
36
24
12
10. Consider your answers to questions 8 and 9. When person #1stopped demanding the good market demand for the good
A. increased (the demand curve shifted to the right).
B. increased (the demand curve shifted to the left).
C. decreased (the demand curve shifted to the right).
D. decreased (the demand curve shifted to the left).
11. On the graph of demand for a good, an increase in demand will show up as
A. a shift to the right by the demand curve.
B. a shift to the left by the demand curve.
C. movement up and to the right along a stationary demand curve.
D. movement down and to the right along a stationary demand curve.
E. movement up and to the left along a stationary demand curve.
F. movement down and to the left along a stationary demand curve.
12. On the graph of demand for a good, a decrease in demand will show up as
A. a shift to the right by the demand curve.
B. a shift to the left by the demand curve.
C. movement up and to the right along a stationary demand curve.
D. movement down and to the right along a stationary demand curve.
E. movement up and to the left along a stationary demand curve.
F. movement down and to the left along a stationary demand curve.
13. If demand for a good obeys the "law of demand," then an increase in the price of the good causes
A. a shift to the right by the demand curve.
B. a shift to the left by the demand curve.
C. movement up and to the right along a stationary demand curve.
D. movement down and to the right along a stationary demand curve.
E. movement up and to the left along a stationary demand curve.
F. movement down and to the left along a stationary demand curve.
14. If demand for a good obeys the "law of demand," then anincrease in the price of the goodcauses
A. an increase in the quantity of the good demanded, but no change in the demand for the good.
B. a decrease in the quantity of the good demanded, but no change in the demand for the good.
C. an increase in demand for the good.
D. a decrease in demand for the good.
15. If demand for a good obeys the "law of demand," then a decrease in the price of the good causes
A. a shift to the right by the demand curve.
B. a shift to the left by the demand curve.
C. movement up and to the right along a stationary demand curve.
D. movement down and to the right along a stationary demand curve.
E. movement up and to the left along a stationary demand curve.
F. movement down and to the left along a stationary demand curve.
16. If demand for a good obeys the "law of demand," then a decrease in the price of the goodcauses
A. an increase in the quantity of the good demanded, but no change in the demand for the good.
B. a decrease in the quantity of the good demanded, but no change in the demand for the good.
C. an increase in demand for the good.
D. a decrease in demand for the good.
17. If supply of a good obeys the "law of supply," then an increase in the price of the good will cause
A. an increase in the quantity of the good supplied, but no change in the supply of the good.
B. a decrease in the quantity of the good supplied, but no change in the supply of the good.
C. an increase in the supply of the good.
D. a decrease in the supply of the good.
18. If supply of a good obeys the "law of supply," then a decrease in the price of the good will cause
A. an increase in the quantity of the good supplied, but no change in the supply of the good.
B. a decrease in the quantity of the good supplied, but no change in the supply of the good.
C. an increase in the supply of the good.
D. a decrease in the supply of the good.
19. On the graph of the supply of a good, an increase in supply will show up as
A. a shift to the right by the supply curve.
B. a shift to the left by the supply curve.
C. an increase in the slope of the supply curve.
D. a decrease in the slope of the supply curve.
E. movement up and to the right along a stationary supply curve.
20. On the graph of the supply of a good, a decrease in supply will show up as
A. a shift to the right by the supply curve.
B. a shift to the left by the supply curve.
C. an increase in the slope of the supply curve.
D. a decrease in the slope of the supply curve.
E. movement down and to the left along a stationary supply curve.
21. If supplyof a good obeys the "law of supply," then an increase in the price of the good will cause
A. an increase in the quantity of the goodsupplied, but no change in the supply of the good.
B. a decrease in the quantity of the goodsupplied, but no change in the supply of the good.
C. an increase in the supply of the good.
D. a decrease in the supply of the good.
22. If supply of a good obeys the "law of supply," then a decrease in the price of the good will cause
A. an increase in the quantity of the good supplied, but no change in the supply of the good.
B. a decrease in the quantity of the good supplied, but no change in the supply of the good.
C. an increase in the supply of the good.
D. a decrease in the supply of the good.
23. On the graph showing demand, quantity is on the axis and price is on the axis.
A. horizontal; vertical
B. vertical; horizontal
24. On the graph showing supply, quantity is on the axis and price is on the axis.
A. horizontal; vertical
B. vertical; horizontal
P QD QS
($/lb.)(lbs./day) (lbs./day)
9 1 6
7 5 5
5 8 4
3 12 3
1 17 0
Suppose the table above shows supply and demand in a market for a good. Use it to answer questions 25 - 27.
25. The market equilibrium price is $ per lb., and the market equilibrium quantity is lbs. per day. (You need to get both parts of this right.)
26. If for some reason the market price is actually $9 per pound, then in the market there will be a
[surplus shortage] of lbs. per day. (Answer by circling one of the two words in brackets, and then by writing the correct number in the blank. You need to get both parts of this right.)
27. If for some reason the market price is actually $3 per pound, then in the market there will be a
[surplus shortage] of lbs. per day.
28. If supply and demand obey their laws then when the demand for cement rises and the supply of cement doesn't change
A. the market equilibrium price (PE) of cement will rise, and the market equilibrium quantity (QE) of cement will rise.
B. PE will rise and QE will fall.
C. PE will rise and QE will stay the same..
D. PE will rise and QE might rise or fall or stay the same.
E. PE will fall and QE will rise.
F. PE will fall and QE will fall.
G. PE will fall and QE will stay the same.
H. PE will fall and QE might rise, or fall, or stay the same.
I. PE will stay the same and QE will rise.
J. PE will stay the same and QE will fall.
K. PE will stay the same and QE will stay the same.
L. PE will stay the same and QE might rise or fall or stay the same.
M. PE might rise or fall or stay the same and QEwill rise.
N. PE might rise or fall or stay the same and QEwill fall.
0. PE might rise or fall or stay the same and QEwill stay the same.
P. PE might rise or fall or stay the same and QEmight rise or fall or stay the same.
29. If supply and demand obey their laws and the demand for cement falls and the supply of cement doesn't change then
A. the market equilibrium price (PE) of cement will rise, and the market equilibrium quantity (QE)of cement will rise.
B. PE will rise and QE will fall.
C. PE will rise and QE will stay the same..
D. PE will rise and QE might rise or fall or stay the same.
E. PE will fall and QE will rise.
F. PE will fall and QE will fall.
G. PE will fall and QE will stay the same.
H. PE will fall and QE might rise, or fall, or stay the same.
I. PE will stay the same and QE will rise.
J. PE will stay the same and QE will fall.
K. PE will stay the same and QE will stay the same.
L. PE will stay the same and QE might rise or fall or stay the same.
M. PE might rise or fall or stay the same and QE will rise.
N. PE might rise or fall or stay the same and QE will fall.
0. PE might rise or fall or stay the same and QE will stay the same.
P. PE might rise or fall or stay the same and QEmight rise or fall or stay the same.
30. If demand and supply obey their laws and the demand for cement doesn't change and the supply of cement rises then
A. the market equilibrium price (PE) of cement will rise, and the market equilibrium quantity (QE)of cement will rise.
B. PE will rise and QE will fall.
C. PE will rise and QE will stay the same..
D. PE will rise and QE might rise or fall or stay the same.
E. PE will fall and QE will rise.
F. PE will fall and QE will fall.
G. PE will fall and QE will stay the same.
H. PE will fall and QE might rise, or fall, or stay the same.
I. PE will stay the same and QE will rise.
J. PE will stay the same and QE will fall.
K. PE will stay the same and QE will stay the same.
L. PE will stay the same and QE might rise or fall or stay the same.
M. PE might rise or fall or stay the same and QE will rise.
N. PE might rise or fall or stay the same and QE will fall.
0. PE might rise or fall or stay the same and QE will stay the same.
P. PE might rise or fall or stay the same and QEmight rise or fall or stay the same.
31. If demand and supply obey their laws and the demand for cement doesn't change and the supply of cement falls then
A. the market equilibrium price (PE) of cement will rise, and the market equilibrium quantity (QE)of cement will rise.
B. PE will rise and QE will fall.
C. PE will rise and QE will stay the same..
D. PE will rise and QE might rise or fall or stay the same.
E. PE will fall and QE will rise.
F. PE will fall and QE will fall.
G. PE will fall and QE will stay the same.
H. PE will fall and QE might rise, or fall, or stay the same.
I. PE will stay the same and QE will rise.
J. PE will stay the same and QE will fall.
K. PE will stay the same and QE will stay the same.
L. PE will stay the same and QE might rise or fall or stay the same.
M. PE might rise or fall or stay the same and QE will rise.
N. PE might rise or fall or stay the same and QE will fall.
0. PE might rise or fall or stay the same and QE will stay the same.
P. PE might rise or fall or stay the same and QEmight rise or fall or stay the same.
32. Suppose in a market it is observed that the price of the good has increased and the quantity being sold has increased. Which one of the following could cause that?
A. An increase in supply.
B. A decrease in supply.
C. An increase in demand.
D. A decrease in demand.
33. Suppose in a market it is observed that the price of the good has increased andthe quantity being sold has decreased. Which one of the following could cause that?
A. An increase in supply.
B. A decrease in supply.
C. An increase in demand.
D. A decrease in demand.
34. Suppose in a market it is observed that the price of the good has decreasedandthe quantity being sold has increased. Which one of the following could cause that?
A. An increase in supply.
B. A decrease in supply.
C. An increase in demand.
D. A decrease in demand.
35. Suppose in a market it is observed that the price of the good has decreased and the quantity being sold has decreased. Which one of the following could cause that?
A. An increase in supply.
B. A decrease in supply.
C. An increase in demand.
D. A decrease in demand.
36. If supply and demand obey their laws and the demand for cement rises and the supply of cement rises then
A. the market equilibrium price (PE) of cement will rise, and the market equilibrium quantity (QE)of cement will rise.
B. PE will rise and QE will fall.
C. PE will rise and QE will stay the same..
D. PE will rise and QE might rise or fall or stay the same.
E. PE will fall and QE will rise.
F. PE will fall and QE will fall.
G. PE will fall and QE will stay the same.
H. PE will fall and QE might rise, or fall, or stay the same.
I. PE will stay the same and QE will rise.
J. PE will stay the same and QE will fall.
K. PE will stay the same and QE will stay the same.
L. PE will stay the same and QE might rise or fall or stay the same.
M. PE might rise or fall or stay the same and QE will rise.
N. PE might rise or fall or stay the same and QE will fall.
0. PE might rise or fall or stay the same and QE will stay the same.
P. PE might rise or fall or stay the same and QEmight rise or fall or stay the same.
37. If supply and demand obey their laws and the demand for cement falls and the supply of cement falls then
A. the market equilibrium price (PE) of cement will rise, and the market equilibrium quantity (QE)of cement will rise.
B. PE will rise and QE will fall.
C. PE will rise and QE will stay the same..
D. PE will rise and QE might rise or fall or stay the same.
E. PE will fall and QE will rise.
F. PE will fall and QE will fall.
G. PE will fall and QE will stay the same.
H. PE will fall and QE might rise, or fall, or stay the same.
I. PE will stay the same and QE will rise.
J. PE will stay the same and QE will fall.
K. PE will stay the same and QE will stay the same.
L. PE will stay the same and QE might rise or fall or stay the same.
M. PE might rise or fall or stay the same and QE will rise.
N. PE might rise or fall or stay the same and QE will fall.
0. PE might rise or fall or stay the same and QE will stay the same.
P. PE might rise or fall or stay the same and QEmight rise or fall or stay the same.
38. If supply and demand obey their laws and the demand for cement rises and the supply of cement falls then
A. the market equilibrium price (PE) of cement will rise, and the market equilibrium quantity (QE)of cement will rise.
B. PE will rise and QE will fall.
C. PE will rise and QE will stay the same..
D. PE will rise and QE might rise or fall or stay the same.
E. PE will fall and QE will rise.
F. PE will fall and QE will fall.
G. PE will fall and QE will stay the same.
H. PE will fall and QE might rise, or fall, or stay the same.
I. PE will stay the same and QE will rise.
J. PE will stay the same and QE will fall.
K. PE will stay the same and QE will stay the same.
L. PE will stay the same and QE might rise or fall or stay the same.
M. PE might rise or fall or stay the same and QE will rise.
N. PE might rise or fall or stay the same and QE will fall.
0. PE might rise or fall or stay the same and QE will stay the same.
P. PE might rise or fall or stay the same and QEmight rise or fall or stay the same.
39. If supply and demand obey their laws and the demand for cement falls and the supply of cement rises then
A. the market equilibrium price (PE) of cement will rise, and the market equilibrium quantity (QE)of cement will rise.
B. PE will rise and QE will fall.
C. PE will rise and QE will stay the same..
D. PE will rise and QE might rise or fall or stay the same.
E. PE will fall and QE will rise.
F. PE will fall and QE will fall.
G. PE will fall and QE will stay the same.
H. PE will fall and QE might rise, or fall, or stay the same.
I. PE will stay the same and QE will rise.
J. PE will stay the same and QE will fall.
K. PE will stay the same and QE will stay the same.
L. PE will stay the same and QE might rise or fall or stay the same.
M. PE might rise or fall or stay the same and QE will rise.
N. PE might rise or fall or stay the same and QE will fall.
0. PE might rise or fall or stay the same and QE will stay the same.
P. PE might rise or fall or stay the same and QEmight rise or fall or stay the same.
40. Suppose the demand for a good is perfectly inelastic with respect to price. If so, then if the supply of the good obeys the law of supply, and the supply of the good rises, this increase in supply will cause the market equilibrium price of the good to [rise fall stay the same], and we can expect that people will buy [more less the same amount] of the good. As a result total revenue of the sellers (and total spending by the buyers!) will [rise fall stay the same]. (Circle the correct answer to ALL 3 parts of the question).
40G. Be ready to sketch a graph of the situation described by question 40. Label the horizontal axis Q and label the vertical axis P. Label demand D. Label the first supply curve S1, and label the second supply curve S2. Label the first equilibrium E1, and label the second equilibrium E2. (That's all the labeling required.) If you don't do all of this correctly you'll be graded as having gotten the answer to 40G wrong.
41. Suppose the demand for a good is perfectly inelastic with respect to price. If so, then if the supply of the good obeys the law of supply, and the supply of the good falls, this decrease in supply will cause the market equilibrium price of the good to [rise fall stay the same], and we can expect that people will buy [more less the same amount] of the good. As a result total revenue of the sellers (and total spending by the buyers!) will [rise fall stay the same]. (Circle the correct answer to ALL 3 parts of the question).
41G. Be ready to sketch a graph of the situation described by question 41. Label the horizontal axis Q and label the vertical axis P. Label demand D. Label the first supply curve S1, and label the second supply curve S2. Label the first equilibrium E1, and label the second equilibrium E2. (That's all the labeling required.) If you don't do all of this correctly you'll be graded as having gotten the answer to 41G wrong.
42. Suppose a market is in equilibrium, and then supply rises. Assume supply and demand obey their laws. The increase in supply will cause the market to move to a new equilibrium. If in the case of this change demand is relatively inelastic, the increase in supply will cause the market equilibrium price of the good to [rise fall stay the same], we can expect that people will buy [more less the same amount] of the good and as a result total revenue of the sellers (and total spending by the buyers!) will [rise fall stay the same]. (Circle the correct answer to ALL 3 parts of the question).
43. Suppose a market is in equilibrium, and then supply falls. Assume supply and demand obey their laws. The decrease in supply will cause the market to move to a new equilibrium. If in the case of this change demand is relatively inelastic, the decrease in supply will cause the market equilibrium price of the good to [rise fall stay the same], and we can expect that people will buy [more less the same amount] of the good. As a result total revenue of the sellers (and total spending by the buyers!) will [rise fall stay the same]. (Circle the correct answer to ALL 3 parts of the question).
44. Suppose a market is in equilibrium, and then supply rises. Assume supply and demand obey their laws. The increase in supply will cause the market to move to a new equilibrium. If in the case of this change demand is relatively elastic, the increase in supply will cause the market equilibrium price of the good to [rise fall stay the same], and we can expect that people will buy [more less the same amount] of the good. As a result total revenue of the sellers (and total spending by the buyers!) will [rise fall stay the same]. (Circle the correct answer to ALL 3 parts of the question).
45. Suppose a market is in equilibrium, and then supply falls. Assume supply and demand obey their laws. The decrease in supply will cause the market to move to a new equilibrium. If in the case of this change demand is relatively elastic, the decrease in supply will cause the market equilibrium price of the good to [rise fall stay the same], and we can expect that people will buy [more less the same amount] of the good. As a result total revenue of the sellers (and total spending by the buyers!) will [rise fall stay the same]. (Circle the correct answer to ALL 3 parts of the question).
46. Suppose a market is in equilibrium, and then supply rises. Assume supply obeys its law. The increase in supply will cause the market to move to a new equilibrium. If in the case of this change demand is perfectly elastic, the increase in supply will cause the market equilibrium price of the good to [rise fall stay the same], and we can expect that people will buy [more less the same amount] of the good. As a result total revenue of the sellers (and total spending by the buyers!) will [rise fall stay the same]. (Circle the correct answer to ALL 3 parts of the question).
46G. Be ready to sketch a graph of the situation described by question 46. Label the horizontal axis Q and label the vertical axis P. Label demand D. Label the first supply curve S1, and label the second supply curve S2. Label the first equilibrium E1, and label the second equilibrium E2. (That's all the labeling required.) If you don't do all of this correctly you'll be graded as having gotten the answer to 46G wrong.
47. Suppose a market is in equilibrium, and then supply falls. Assume supply obeys its law. The decrease in supply will cause the market to move to a new equilibrium. If in the case of this change demand is perfectly elastic, the decrease in supply will cause the market equilibrium price of the good to [rise fall stay the same], and we can expect that people will buy [more less the same amount] of the good. As a result total revenue of the sellers (and total spending by the buyers!) will [rise fall stay the same]. (Circle the correct answer to ALL 3 parts of the question).
47G. Be ready to sketch a graph of the situation described by question 47. Label the horizontal axis Q and label the vertical axis P. Label demand D. Label the first supply curve S1, and label the second supply curve S2. Label the first equilibrium E1, and label the second equilibrium E2. (That's all the labeling required.) If you don't do all of this correctly you'll be graded as having gotten the answer to 47G wrong.
48. Suppose demand for a good obeys the law of demand. The market for the good is in equilibrium, and then demandrises, causing the market to move to a new equilibrium. If in the case of this change supplyisperfectly inelastic, the increase in demand will cause the market equilibrium price of the good to [rise fall stay the same], and we can expect that people will buy [more less the same amount] of the good. As a result total revenue of the sellers (and total spending by the buyers!) will [rise fall stay the same]. (Circle the correct answer to ALL 3 parts of the question).
48G. Be ready to sketch a graph of the situation described by question 48. Label the horizontal axis Q and label the vertical axis P. Label supply S. Label the first demand curve D1, and label the second demand curve D2. Label the first equilibrium E1, and label the second equilibrium E2. (That's all the labeling required.) If you don't do all of this correctly you'll be graded as having gotten the answer to 48G wrong.
49. Suppose demand for a good obeys the law of demand. The market for the good is in equilibrium, and then demandfalls, causing the market to move to a new equilibrium. If in the case of this change supply is perfectly inelastic, the decrease in demand will cause the market equilibrium price of the good to [rise fall stay the same], and we can expect that people will buy [more less the same amount] of the good. As a result total revenue of the sellers (and total spending by the buyers!) will [rise fall stay the same]. (Circle the correct answer to ALL 3 parts of the question).
49G. Be ready to sketch a graph of the situation described by question 49. Label the horizontal axis Q and label the vertical axis P. Label supply S. Label the first demand curve D1, and label the second demand curve D2. Label the first equilibrium E1, and label the second equilibrium E2. (That's all the labeling required.) If you don't do all of this correctly you'll be graded as having gotten the answer to 49G wrong.
50. Suppose demand for a good obeys the law of demand. The market for the good is in equilibrium, and then demand rises, causing the market to move to a new equilibrium. If in the case of this change supply is perfectly elastic, the increase in demand will cause the market equilibrium price of the good to [rise fall stay the same], and we can expect that people will buy [more less the same amount] of the good. As a result total revenue of the sellers (and total spending by the buyers!) will [rise fall stay the same]. (Circle the correct answer to ALL 3 parts of the question).
50G. Be ready to sketch a graph of the situation described by question 50. Label the horizontal axis Q and label the vertical axis P. Label supply S. Label the first demand curve D1, and label the second demand curve D2. Label the first equilibrium E1, and label the second equilibrium E2. (That's all the labeling required.) If you don't do all of this correctly you'll be graded as having gotten the answer to 50G wrong.
51. Suppose demand for a good obeys the law of demand. The market for the good is in equilibrium, and then demandfalls, causing the market to move to a new equilibrium. If in the case of this change supply is perfectly elastic, the decrease in demand will cause the market equilibrium priceof the good to [rise fall stay the same], and we can expect that people will buy [more less the same amount] of the good. As a result total revenue of the sellers (and total spending by the buyers!) will [rise fall stay the same]. (Circle the correct answer to ALL 3 parts of the question).
51G. Be ready to sketch a graph of the situation described by question 51. Label the horizontal axis Q and label the vertical axis P. Label supply S. Label the first demand curve D1, and label the second demand curve D2. Label the first equilibrium E1, and label the second equilibrium E2. (That's all the labeling required.) If you don't do all of this correctly you'll be graded as having gotten the answer to 51G wrong.
The table below gives you two points on a market demand curve, and two points on a market supply curve. Both curves are linear (that is, both are straight lines). Use this information to answer questions 52and 53.
52. Fill in the missing values of QD and QS in the table below:
P QD QS
($/lb.)(lbs./day) (lbs./day)
12
10 5
8
6
4 4
2 5 1
53. The market equilibrium price is $ per lb., and the market equilibrium quantity is
lbs. per day.
54. Suppose the market demand shown in the table above doubles (that is, it increases by 100%). Assume supply hasn't changed, and fill in the missing values in the table below for this case. P QD QS
($/lb.)(lbs./day) (lbs./day)
12
10 5
8
6
4
2 1
Use your answer to 54 to answer 55:
55. The market equilibrium price is $ per lb. and the market equilibrium quantity is lbs. per day.