QUIZ on chap 3 demand and supply PDF

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QUIZ

1. The law of demand is illustrated by a demand curve that is: A. B. C. D.

Vertical Horizontal Upward sloping Downward sloping

Answer: C 1. Which would cause a decrease in the quantity of computers supplied? A. E. F. G.

An increase in the demand for computers A decrease in the demand for computers An increase in the incomes of consumers A decrease in the price of parts for making computers

Answer: B 2. If the quantity supplied of a product is less than the quantity demanded, then: H. I. J. K.

There is a shortage of the product There is a surplus of the product The product is a normal good The product is an inferior good

Answer: E 3. If the market price is above the equilibrium price: L. M. N. O.

A shortage will occur and producers will produce more and lower prices A surplus will occur and producers will produce less and lower prices A surplus will result and consumers will bid prices up Producers will make extremely high profits

Answer: I 4. A competitive market will: P. Q. R. S.

achieve an equilibrium price. produce shortages. produce surpluses. create disorder.

Answer: M 5. A product market is in equilibrium: T. U. V. W.

when there is no surplus of the product. when there is no shortage of the product. when consumers want to buy more of the product than producers offer for sale. where the demand and supply curves intersect.

Answer: T 6. A headline reads "Storms destroy half of the lettuce crop." This situation would lead to a(n): X. Increase in the price of lettuce and quantity purchased Y. Decrease in the price of lettuce and quantity purchased Z. Increase in the price of lettuce and decrease in quantity purchased AA. Decrease in the price of lettuce and increase in quantity purchased

Answer: W 7. Government-set price floors and price ceilings: BB.Do not affect the rationing function of price in a free market CC.Interfere with the rationing function of price in a free market DD. Result in surpluses of products in markets where they are used EE. Result in shortages of products in markets where they are used

Answer: Z 8. A headline reads "Storms destroy half of the lettuce crop." This situation would lead to a(n): FF. Increase in the price of lettuce and quantity purchased GG. Decrease in the price of lettuce and quantity purchased HH. Increase in the price of lettuce and decrease in quantity purchased II. Decrease in the price of lettuce and increase in quantity purchased

Answer: EE 9. Government-set price floors and price ceilings: JJ. Do not affect the rationing function of price in a free market KK. Interfere with the rationing function of price in a free market LL. Result in surpluses of products in markets where they are used MM. Result in shortages of products in markets where they are used

Answer: HH...