A leftward shift of the market demand curve, ceteris paribus, causes equilibrium:

D)Market demand must be upward sloping.Answer: AType: Complex UnderstandingPage: 6124.When demand decreases,ceteris paribus, the equilibrium price will also decrease because:Type: Complex UnderstandingPage: 61

25.When the supply of HDTVs increases,ceteris paribus, the equilibrium price will decrease because:Type: Complex UnderstandingPage: 61

26.When the supply of gasoline decreases,ceteris paribus, the equilibrium price will increase because:A)A shortage exists at the old equilibrium price.C)The quantity demanded has increased.B)A surplus exists at the old equilibrium price. D)The quantity supplied has decreased.Answer: AType: Complex UnderstandingPage: 61

27.When half of the consumers in a small town move away, the markets for different goods and serviceswill generally experience:Type: Complex UnderstandingPage: 61

28.A leftward shift of the market supply curve,ceteris paribus, causes equilibrium:Type: AnalyticalPage: 61

29.An increase in the supply of gasoline,ceteris paribus, will cause equilibrium:Type: Complex UnderstandingPage: 61

30.A leftward shift in a supply curve,ceteris paribus, is characterized by:A)A decrease in equilibrium quantity and a decrease in price.B)A decrease in equilibrium quantity and an increase in price.C)An increase in equilibrium quantity and a decrease in price.D)An increase in equilibrium quantity and an increase in price.Answer: BType: AnalyticalPage: 61

1. • author "Rosenauer"
   • tags "Microeconomics Econ2302 Exam 1"
   • folders "Microeconomics"
   • description ""
   • fileName "Econ 2302 - Exam I"
   • freezingBlueDBID -1.0
   
   
   • Economics may be best defined as:
   • a) The interaction between macro and micro considerations.
   • b) The study of how society chooses to allocate its scarce resources to the production of goods and services in order to satisfy unlimited wants.
   • c) The empirical testing of value judgments through the use of logic.
   • d) The use of policy to refute facts and hypotheses.
   • b) The study of how society chooses to allocate its scarce resources to the production of goods and services in order to satisfy unlimited wants.

2. Opportunity cost may be defined as the:
   
   
   
   

   D) The amount of one product that must be given up to produce one more unit of another product.

3. A production possibilities curve shows:
   
   
   
   

   B) The maximum amounts of two good that can be produced assuming the full and efficient use of available resources.

4. The law of increasing opportunity costs exists because:
   
   
   
   

   A) Resources are not perfectly adaptability or substitable in producing different goods.

5. Which of the following will not produce an outward shift of the production possibilites curve?
   
   
   
   

   D) The reduction of unemployment.

6. The price system can best be defined as:
   
   
   
   

   A) A mechanism that uses the forces of supply and demand to create desired output through rising and falling prices.

7. The two kinds of markets found in the circular flow model are:
   
   
   
   

   A) product and resource (factor) markets.

8. A normative statement is one which is:
   
   
   
   

   A) Subjective and based on a value judgment.

9. Adam Smith wrote:
   
   
   
   

   C) The Wealth of Nations, which described the virtues of market-based economies.

10. Which of the following are our nation's major economic goals?
    
    
    
    

    D) All of the above.

11. Microeconomics approaches the study of economics from the view point of:
    
    
    
    

    D) Individual specific markets.

12. According to the law of demand, the quantity of a good demanded in a given time period:
    
    
    
    

    D) Decreases as its price rises, ceteris paribus.

13. A change in demand means there has been a shift in the demand curve, and a change in the quantity demanded:
    
    
    
    

    A) Corresponds to a movement along the demand curve.

14. A decrease in the price of one good can cause an increase in the demand for another good if the goods are:
    
    
    
    

    A) Complements.

15. A market is said to be in equilibrium when:
    
    
    
    

    D) The quantity demanded equals the quantity supplied.

16. A rightward shift in a demand curve and a rightward shift in a supply curve both result in a:
    
    
    
    

    D) Higher equilibrium quantity.

17. A rightward shift in a demand curve and a leftward shift in a supply curve both result in a:
    
    
    
    

    B) Higher equilibrium price.

18. A leftward shift of the market demand curve, ceteris paribus, causes equilibrium:
    
    
    
    

    B) Price to decrease and quantity to decrease.

19. A rightward shift of the market supply curve, ceteris paribus, causes equilibrium:
    
    
    
    

    D) Price to decrease and quantity to increase.

20. A surplus of a product will arise when prise is:
    
    
    
    

    B) Above equilibrium with the result that quantity supplied exceeds quantity demanded.

21. Which of the following could cause an increase in consumer demand for product X?
    
    
    
    

    C) An increase in the prices of goods which are substitues for product X.

22. When the production or consumption of a good involves and externality:
    
    
    
    

    A) Someone not involved in buying or selling the good is affected.

23. A price floor is:
    
    
    
    

    D) A legally estabilished minimum price a seller can be paid.

24. Which of the following would not be classified as a capital resource?
    
    
    
    

    C) 100 shares of General Motors.

25. Price Ceilings:
    
    
    
    

    A) create shortages.

26. In a market economy the distribution of income would be determined primarily by:
    
    
    
    

    C) the quantities and quanlities of the resources which household supply.

27. One reason why the quantity of a good demanded increases when its price falls is that the:
    
    
    
    

    B) lower price increases the real income of buyers, enabling them to buy more.

28. Models:
    
    
    
    

    D) All of the above.

29. The problems of aggregate inflation and unemployment are:
    
    
    
    

    B) major topics of macroeconomics.

30. A leftward shift of the market supply curve, ceteris paribus, causes equilibrium:
    
    
    
    

    B) Price to increase and quantity to decrease.

31. Which of the following can change without shifting either demand or supply, ceteris paribus?
    
    
    
    

    A) The price of the good itself.

32. Which factor will decrease the demand for the product?
    
    
    
    

    D) A decrease in the number of buyers.

33. An increase in the supply of a product would most likely be caused by:
    
    
    
    

    B) A decrease in business taxes.

34. The demand for a product might shift as the result of a change in:
    
    
    
    

    D) All of the above.

35. Which of the following is a determinant of supply?
    
    
    
    

    C) Taxes and subsidies.

36. Graphically, the market demand curve is:
    
    
    
    

    C) The horizontal sum of individual demand curves.

37. The law of supply states that the quantity of a good supplied, ceteris paribus, increases:
    
    
    
    

    C) As its price increases.

38. The location of the supply curve of a product depends on:
    
    
    
    

    D) All of the above.

39. A normal good is defined as one:
    
    
    
    

    D) The consumption of which varies directly with incomes.

40. "Spillovers" or "externalities" weaken the efficiency of the market system because they:
    
    
    
    

    B) Cause certain goods to be over produced or under produced.

41. Refer to the below diagram. A price of $60 in this market will result in:
    
    
    
    

    B) A surplus of 100 units.

42. When economists describe a "market," they mean:
    
    
    
    

    A) A mechanism which coordinates acctions of consumers and producers to establish equilibrium prices and quantities.

43. Refer to the below diagram, which shows demand and supply conditions in the competitive market for product X. Given D0, if the supply curve moved from S0 to S1, then:
    
    
    
    

    B) Supply has decreased and equilibrium quantity has decreased.

44. Refer to the below diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market:
    
    
    
    

    B) An increase in demand has been more than offset by an increase in supply.

45. Education and training that improve the skill of the of th labor force are represented on the production possibilities curve by a (an):
    
    
    
    

    B) Outward shift of the curve.

46. An increase in consumer income, other things being equal, will:
    
    
    
    

    B) Shift the demand curve for an inferior good the left.

47. Which of the following is the result of a decrease in the price of tea, other things being equal?
    
    
    
    

    B) A downward movement along the demand curve for tea.

48. Pollution from cars in an example of:
    
    
    
    

    B) A negative externailty.

49. An increase in the wage paid to grape pickers will cause the:
    
    
    
    

    A) Supply curve for grapes to shift to the left, resulting in higher prices for grapes.

50. A good that provides external benefits to society has:
    
    
    
    

    B) Too few resources devoted to its production.

How would a leftward shift in the demand curve affect the equilibrium price in a market?

What is a leftward shift in the demand curve called?

What will be the effect of a leftward shift of the supply curve on the equilibrium price and equilibrium quantity?

When the price falls What happens ceteris paribus )?