Quiz 4 Questions and Answers PDF

Preview

Summary

This is a required quiz with questions and answers....

Description

E201 – QUIZ #4 (Fall 2018, Morrison) Choose the BEST answer for each question. Use the scratch-off form to answer questions. Use the following figure to answer questions 1 - 4: Figure: Shifts in Demand and Supply III

1. Look at the figure Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose the technology for producing snowboards improves. Which panel BEST describes how this will affect the market for snowboards? A) panel C B) panel D C) panel A D) panel B 2. Look at the figure Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose the technology for producing snowboards improves. Which panel BEST describes how this will affect the market for toboggans, a substitute in the consumption of snowboards? A) panel B B) panel C C) panel D D) panel A

Page 1

3. Look at the figure Shifts in Demand and Supply III. Suppose the price of coltan, an input in making smart phones increases. Which panel BEST describes how this will affect the market for smart phones? A) panel A B) panel B C) panel D D) panel C

4. Look at the figure Shifts in Demand and Supply III. Suppose severe weather destroys most of the soybean crops. Which panel BEST describes how this will affect the market for soybeans? A) panel B B) panel D C) panel A D) panel C 5. In much of the country, homeowners choose to heat their houses with either natural gas or electricity. Which of the following would cause an increase in the demand for natural gas? A) an increase in the price of electricity B) a decrease in the price of natural gas C) a decrease in consumer incomes D) an increase in the price of natural gas 6. Assume that fish and lemon are complements in consumption on the island nation of Poisson, which is a closed economy (i.e., they do not trade with other nations). If a quota limit is imposed on the amount of fish allowed to be caught, and the quota is set at a quantity below equilibrium, the price of fish will _____ while the price of the lemon will _____. A) B) C) D)

decrease; decrease increase; increase increase; decrease decrease; increase

7. It is cheaper to grow strawberries in the summer. In the market for strawberries, equilibrium price of strawberries decreases, and the equilibrium quantity increases in the summer. This change in equilibrium quantity is caused by a ____________ curve, which causes a __________ curve. A) B) C) D)

shift to the right of the demand; movement along the supply shift to the right of the supply; movement along the demand movement to the left along the supply; shift in the demand movement to the right along the demand; shift of the supply

8. Consider supply and demand in the market for orange juice. Which of the following changes would cause a movement to the right along the demand curve. A) B) C) D)

An increase in average income A decrease in the price of orange juice An outbreak food poisoning linked to apple juice, a substitute for orange juice An increase in the price of apple juice, a substitute for orange juice

Page 2

9. Consider supply and demand in the market for oranges. Which of the following changes would, in the long run, lead to a movement to the right along the demand curve. A) B) C) D)

10.

An improvement in technology that decreases the cost of producing oranges The imposition of tariffs on oranges imported from Mexico An increase in the price of oranges An decrease in the price of apples, a substitute for oranges

Consider the market for bicycles. If the demand curve shifts to the right, and the supply curve shifts to the right, then we know that the equilibrium quantity _______, and the equilibrium price _________ A) B) C) D)

may increase, decrease, or remain the same; will increase will increase; may increase, decrease, or remain the same will increase; will decrease will increase; will increase

Page 3...