Basic Economics Questions
The supply of CDC would decrease, causing equilibrium price to increase and equilibrium quantity to decrease. 1 1) Assume there is a reduction in the shipments of petroleum products due to political tension in the Persian Gulf. Which of the following would not be expected to happen? 1) A) Quantity demanded would decrease. B) The demand curve would shift to the left. C) There would be a shortage of the original equilibrium price. D) Oil companies would “ration” their supplies of gasoline by raising price. 12) Assume declining profits in the market for Internet service force several firms in the area to drop out of the market. All else instant, this would cause the: 12) A) equilibrium price to increase and equilibrium quantity to decrease. B) equilibrium price to decrease and equilibrium quantity to increase. C) equilibrium price and quantity to decrease.
D) equilibrium price and quantity to increase. 13) In order to import German goods into the United States, U. S. Importers must buy those goods with German money, I. E. , Euros. Assume, all else constant, there is a decrease in the price of U. S. -made cars compared to the price of German cars. Based on this information,
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D) an increase in the equilibrium price of Euros. 14) Assuming there is a surplus in the market for copper, if the market for copper is allowed to adjust, the ultimate result will be: 14) A) an increase in price and an increase in the quantity demanded. B) a decrease in price and an increase in the quantity supplied. C) a decrease in price and an increase in the quantity demanded. D) an increase in price and an increase in the quantity supplied. 5) “Demand” is best defined as the relationship between: 15) A) the current price of a good and the quantity demanded at that price.
B) the quantity supplied and the price people are willing to pay for a good. C) the price of a good and the quantity consumers are willing and able to buy at each price. D) the amount of income someone has and the price he is willing to pay for a good. TRUE/FALSE. Write ‘T’ if the statement is true and ‘F’ if the statement is false. 16) Assume that in an effort to help consumers, the government decides to reduce the amount of taxes it imposes on sellers of gasoline, hat is, sellers are required to pay the government a smaller fee for each gallon of gas they sell.
In the market for gas, this would have the effect of causing an increase in the supply of gas and a decrease in equilibrium price. 16) 1 7) Assume a national brewing company loses market share to a lowercased competitor. Assume also that the company’s workers go on strike and are able to negotiate a hefty wage increase. As such, we can conclude, with certainty, that the combination of these two changes would cause the equilibrium price and quantity of the company’s product to decrease. 17) 8) Assume the demand function for good X can be written as Q Consumer income.
Prepare to receive your Test Bank in the next moment. Contact us at CPA. [email protected] Com This equation implies that X and Y are complements. 19) All else constant, an increase in the incomes of consumers in the market for diamonds would cause the supply of diamonds to increase. 19) 20) When market price is higher than the equilibrium price, a surplus is created. This will put downward pressure on price, causing quantity demanded to increase and quantity supplied to decrease until equilibrium is reestablished. 20) ESSAY. Rite your answer in the space provided or on a separate sheet of paper. 1) “In the past five years the average price of our Chevrolet has risen about 6 percent a year, and each year we have sold 10 percent more cars than the previous year. ” How can this car dealer sell more cars as the price of the cars increases? 22) Using a change in supply and/or demand, explain the following phenomena: a. All else constant, gasoline prices are higher in summer than winter months. B. At the same time that the quality of personal computers has been increasing, the price of personal computers has been falling. 3) Distinguish between “a change in demand” and “a change in quantity demanded.