Test Bank for Quiz-2
Economic growth is the result of A) technological change.
B) capital accumulation.
C) change in labour availability
D) All of the above.
The quantity demanded is
A) always equal to the equilibrium quantity.
B) independent of the price of the good.
C) the amount of a good that consumers plan to purchase at a particular price.
D) independent of consumers' buying plans.
The "law of demand" states that changes in
A) demand are related directly to changes in supply.
B) the quantity demanded of a good are not related to changes in the quantity supplied.
C) the quantity demanded of a good are inversely related to changes in its price.
D) demand are inversely related to changes in supply.
The "law of demand" states that, other thing remaining the same, the higher
A) the price of a good, the lower is the demand for this good.
B) consumers' incomes, the greater is the demand.
C) the price of a good, the higher is the quantity demanded.
D) the price of a good, the smaller is the quantity demanded.
The law of demand implies that demand curves
A) slope down.
B) slope up.
C) shift rightward whenever the price rises.
D) shift leftward whenever the price rises.
The demand curve shows the relationship between:
A. money income and quantity demanded
A) price and production costs
B) price and quantity demanded
C) consumer tastes and the quantity demanded.
If the price of an apple increases from 50 halala to 60 halala, the quantity demanded
will decrease because of
A) the substitution effect only.
B) the income effect only.
C) a change in income.
D) the substitution and income effects.
The negative slope of the demand curve indicates that there is ________ relationship
between the price and the quantity demanded.
A) a direct
B) an inverse
C) a positive
D) no relationship
A substitute is a good
A) that can be used in place of another good.
B) that is not used in place of another good.
C) of lower quality than another good.
D) of higher quality than another good.
A recent study found that an increase in the price of petrol would reduce the demand
for car. We can conclude that:
A) Petrol and car are substitute goods.
B) Petrol is an inferior good.
C) Petrol and car are complementary goods.
D) Car is an inferior good.
If the price of product Pepsi increases, the demand curve for product Coca Cola will:
A) shift to the right.
B) shift to the left.
C) remain unchanged.
D) None of the above.
People buy more of Al-Baik when the price of KFC rises. These goods are
A) complements.
B) substitutes.
C) normal goods.
D) inferior goods.
A complement is a good
A) of lower quality than another good.
B) used together with another good.
C) used instead of another good.
D) of higher quality than another good.
Suppose people buy more car when the price of petrol falls. These goods are
A) complements.
B) substitutes.
C) normal.
D) inferior.
Comparative advantage is
A) the ability to produce anything at a lower opportunity cost than anyone else.
B) the ability to produce anything at a higher opportunity cost than anyone else.
C) the ability to produce anything at a zero opportunity cost.
D) another name for absolute advantage.
An increase the expected future price of a good, right now
A) increases its demand.
B) decreases its demand.
C) increases its supply.
D) has no effect on either its demand or its supply.
Assume the demand curve for Nokia shifts to the right. This might be caused by:
A)
B)
C)
D)
goods.
a decline in income.
a decline in the price of Samsung if Nokia and Samsung are substitute goods.
a change in consumer tastes that is favorable to Nokia.
an increase in the price of Samsung if Nokia and Samsung are complementary
An increase in demand means that:
A)
B)
C)
D)
price has increased and consumers therefore want to purchase less of the
product.
the demand curve has shifted to the right.
price has declined and consumers therefore want to purchase more of the
product.
the demand curve has shifted to the left.
The supply of a product depends on:
A)
C)
B)
D)
the technology used to produce it.
the number of sellers in the market.
the prices of resources used in its production.
all of the above.
Which of the following increases the demand for a Al-Baik good?
A) a decrease in income
B) an decrease in the price of a substitute
C) an increase in the price of a complement
D) The price of Al-Baik is expected to increase in the future.
If the price of chocolate rises, then
A) the demand curve shifts rightward.
B) the demand curve shifts leftward.
C) there is a movement downward along the demand curve.
D) there is a movement upward along the demand curve.
Which of the following statements is correct?
A) A change in the quantity demanded means a shift in the demand curve.
B) A change in demand means a movement along the demand curve.
C) A change in demand and change in quantity demanded means the same thing.
D) A change in demand means a shift in the demand curve while change in the quantity
demanded means a movement along the demand curve.
In the above figure, an increase in the quantity demanded is represented by a
movement from point d to
A) point b only.
B) point c only.
C) point a.
D) both points b and c.
In the figure above, which movement reflects an increase in demand?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
In the figure above, which movement reflects a decrease in demand?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
In the figure above, which movement reflects a decrease in quantity demanded but
NOT a decrease in demand?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
In the figure above, which movement reflects an increase in the price of a substitute for
fruit snacks?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
In the figure above, which movement reflects an increase in the price of a complement
for fruit snacks?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
Which of the following is NOT one of the factors that influences the supply of a
product?
A) technology
B) income
C) number of suppliers
D) expected future prices
Other things equal, if the price of a key resource used to produce Al-Baik falls, the:
A) The supply curve of Al-Baik will shift to the right.
B) The demand curve of Al-Baik will shift to the right.
C) The supply curve of Al-Baik will shift to the left.
D) The demand curve of Al-Baik will shift to the right.
S1
S2
Price
x
y
0
Quantity
A decrease in supply is showed by a:
A) move from point x to point y.
B) shift from S2 to S1.
C) shift from S1 to S2.
D) move from point y to point x.
The upward slope of the supply curve reflects the:
A) principle of specialization in production.
B) law of supply.
C) fact that price and quantity supplied are inversely related.
D) law of diminishing marginal utility.
An improvement in production technology will:
A) increase equilibrium price.
B) shift the supply curve to the right.
C) shift the supply curve to the left.
D) shift the demand curve to the left.
The "law of supply" refers to the fact that, all other things remaining the same, when
the price of a good rises
A) the supply curve shifts leftward.
B) the supply curve shifts rightward.
C) there is a movement up along the supply curve to a larger quantity supplied.
D) there is a movement down along the supply curve to a smaller quantity supplied.
In the above figure, what is the supply price for the fourth gallon of ice cream?
A) $2.00
B) $3.00
C) $4.00
D) $5.00
If a producer can use resources to produce either good A or good B, then A and B are
A) complements in production.
B) substitutes in production.
C) substitutes in consumption.
D) complements in consumption.
A bakery can produce either cakes or cookies. If the price of cookies rises, then
A) the supply curve of cake shifts leftward.
B) the supply curve of cake shifts rightward.
C) there is a movement downward along the supply curve of cakes.
D) there is a movement upward along the supply curve of cakes.
Consider the figure above showing supply curves for soft drinks. Suppose the economy
is at point a. A movement to point c could be the result of
A) a decrease in technology.
B) a decrease in the price of a soft drink.
C) an increase in the relative price of a soft drink.
D) an increase in the money price of a soft drink.
Consider the figure above showing supply curves for soft drinks. Suppose the economy
is at point a. An increase in the price of a soft drink is shown as a movement from point
a to
A) none of the points that are illustrated.
B) point b.
C) point c.
D) point d.
In a supply and demand figure, the equilibrium price and quantity are found at the
A) point where quantity supplied equals quantity demanded.
B) horizontal intercept of the demand curve.
C) vertical intercept of the supply curve.
D) horizontal intercept of the supply and the demand curves.
When the quantity demanded equals quantity supplied
A) there is no shortage and no surplus
B) there is a surplus.
C) there is a shortage.
D) none of the above
A price below the equilibrium price results in
A) a surplus.
B) a shortage.
C) excess supply.
D) a further price fall.
Price
Quantity
Quantity
(dollars per supplied demanded
pound)
(pounds)
(pounds)
3
1
7
4
2
5
5
4
4
6
5
2
7
6
1
The above table shows the demand schedule and supply schedule for chocolate chip
cookies. What is the equilibrium quantity and equilibrium price for chocolate chip
cookies?
A) 7 pounds, $3.00 per pound
B) 2 pounds, $3.00 per pound
C) 2 pounds, $6.00 per pound
D) 4 pounds, $5.00 per pound
The equilibrium price in the above figure is
A) $2.
B) $4.
C) $6.
D) $8.
The equilibrium quantity in the above figure is
A) 200 units.
B) 300 units.
C) 400 units.
D) 600 units.
At a price of $10 in the above figure, there is
A) a surplus of 200 units.
B) a shortage of 200 units.
C) a surplus of 400 units.
D) a shortage of 400 units.
At a price of $4 in the above figure,
A) the equilibrium quantity is 400 units.
B) there is a surplus of 200 units.
C) the quantity supplied is 400 units.
D) there is a shortage of 200 units.