### Quiz 2 In Tutorial Library

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### TITLE: Quiz 2

#### CLASS / COURSE: ECO201

QUESTION DESCRIPTION:

Quiz 2:

1. Question : The law of demand states that the quantity demanded of a good is inversely related to the price of that good, therefore as the price of a good goes:

Student Answer: up, the quantity demanded also goes up.

down, the quantity demanded goes up.

down, the quantity demanded goes down.

up, the quantity demanded stays the same.

2. Question : The law of demand states that:

Student Answer: sellers supply less of a good when its price increases.

consumers buy less of a good when its price increases only if their income increases at the same time.
consumers buy less of a good when its price increases even if other demand determinants change at the same time.

consumers buy less of a good when its price increases, provided all shift factors of demand are fixed.

3. Question : According to the law of supply:

price and quantity supplied are positively related.

quantity supplied tends to increase when there is an improvement in technology.
quantity supplied tends to decrease as consumers' incomes increase.

price and quantity supplied are inversely related.

4. Question : An increase in the price of pants will:

Student Answer: increase the supply of pants.

increase the quantity supplied of pants.

decrease the supply of pants.

decrease the quantity supplied of pants.

5. Question : Refer to the graph below. If the price is changed from \$12.00 to \$4.00, how much more is demanded?

4.

6.

8.

6. Question : According to the law of demand an increase in the price of Pepsi will (ceteris paribus):

Student Answer: increase the quantity demanded of Pepsi.

decrease the quantity demanded of Pepsi.

increase the demand for Pepsi.

decrease the demand for Pepsi.

7. Question : When quantity supplied is greater than quantity demanded:

prices tend to fall.

prices tend to rise.

the supply curve shifts leftward.

the demand curve shifts rightward.

8. Question : If current quantity demanded is 500 and current quantity supplied is 1,000, this is an indication that:

Student Answer: the current price is below the equilibrium price.

producers are not responsive to price changes.

the current price is above the equilibrium.

consumers of this particular item do not buy less of it when its price increases.

9. Question : An increase in the number of consumers in a market causes market demand to:

Student Answer: decrease, resulting in a surplus which will be eliminated as price rises.
decrease, resulting in a surplus which will be eliminated as price falls.

increase, resulting in a shortage which will be eliminated as price rises.
increase, resulting in a shortage which will be eliminated as price falls.

10. Question : The law of demand states

quantity demanded increases as price falls, other things constant.

more of a good will be demanded the higher its price, other things constant.
people always want more.

you can't always get what you want at the price you want.

11. Question : Refer to the graph below. The quantity that would be associated with the price of \$2 in a supply table would be:

2

12. Question : When applied to labor markets, the law of supply suggests that:

Student Answer: an increase in the wages earned by nurses will cause the quantity of nurses supplied to decrease.

a decrease in the wages earned by nurses will cause the quantity of nurses supplied to decrease.
an increase in the wages earned by nurses will cause the quantity of nurses demanded to increase.

a decrease in the wages earned by nurses will cause the quantity of nurses demanded to increase.

13. Question : Refer to the graph below. At a price of 90 cents per dozen:

Student Answer: there is a shortage of 2000 dozen eggs per week.

there is a surplus of 2000 dozen eggs per week.

quantity demanded is just equal to quantity supplied.

there is a shortage of 1000 dozen eggs per week.

14. Question : According to the law of supply, an increase in the __________ of a product results in an increase in quantity supplied, other things constant.

opportunity cost

price

supply

15. Question : Refer to the graph below. At a price of \$1.20 per dozen:

there is a surplus of 2000 dozen eggs per week.

there is a surplus of 3000 dozen eggs per week.

there is a shortage of 2000 dozen eggs per week.

the market is in equilibrium.

16. Question : Which of the following statements is correct, ceteris paribus?

When the price of hairspray increases, the quantity demanded of hairspray decreases.

When the price of hairspray decreases, the quantity demanded of hairspray decreases.
When the price of hairspray increases, the demand of hairspray decreases.
When the price of hairspray decreases, the demand of hairspray decreases.

17. Question : Movements down the rows (A to E) in the demand table are represented by movements up along a demand curve.

True.

False

18. Question : A change in the price of carrots will cause a movement along the demand for carrots curve and a shift in the demand for substitute vegetables.

True.

False

19. Question : Ceteris paribus means?

Student Answer: Allowing the free market to decide, not government

Holding everything else constant

Changing prices to see how demand (or supply) shifts

None of the above

20. Question : Which of the following would generally cause an increase in the supply of new automobiles?

A decrease in the price of automobiles

An increase in consumers' income

The new models are perceived as uglier compared to the old models

Producer expectations that the price of new automobiles will be lower next year

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