Reference no: EM132790094

Question 1: Which of the following will cause movement along the demand curve?

a. The price of Brand A orange juice decreases, so the price of Brand B orange juice decreases.

b. The market price of a pound of beef increases from $5 to $7.

c. The number of consumers who eat beef decreases.

d. The price of salt goes down, so the price of black pepper goes up.

Question 2: Select the example below that corresponds to consumer surplus.

a. The price of gold increases to $300 per ounce, so many people start selling their gold.

b. George is willing to spend up to $1,000 on a laptop but is able to find one for $500.

c. Emily usually works as a babysitter for a price of $15 per hour but is willing to work for as low as $10 per hour.

d. The price of a house in a certain neighborhood is $300,000 for three bedrooms and two bathrooms. At this price, the market is clearing.

Question 3: Economically speaking, which of the kinds of change below would be caused when fishermen along the coast of the Gulf of Mexico find that they have not caught nearly as many shrimp as the year before, due to an oil spill?

a. Shift in the demand curve

b. No change in supply or demand

c. Shift in the supply curve

d. Movement along the supply curve

Question 4: When will the deadweight loss be created?

a. When the market is clearing

b. When surplus is shifted from consumer to producer

c. When consumer and producer surplus are maximized

d. When a binding price constraint is implemented

Question 5: Select the TRUE statement below regarding aggregate supply in the short and long run.

a. The relationship between price level and RGDP is negative in the short run.

b. In the long run, there are no limits on production.

c. The LRAS curve can move over time.

d. In the long run, there is a close relationship between price level and RGDP.

Question 6: If an excise tax is imposed on a product, which of the following will happen?

a. The higher price will cause consumers to purchase more of the product.

b. The supply curve will shift upward by the amount of the tax.

c. A shortage will occur.

d. The price will fall until it reaches equilibrium.