  ### Quiz 3 In Tutorial Library

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### TITLE: Quiz 3

#### CLASS / COURSE: ECON 25100: Microeconomics

QUESTION DESCRIPTION:

Quiz 3

1. Which is consistent with the law of demand?

A. An increase in the price of ice cream causes an increase in the quantity of ice cream demanded
B. A decrease in the price of bagels causes an increase in the quantity of bagels demanded
C. A decrease in the price of muffins causes a decrease in the quantity of muffins demanded
D. An increase in the price of candy bars causes no change in the quantity of candy bars demanded

2. The table below shows the market demand for a bushel of wheat in a market where there are just three buyers (data are hypothetical).

If there were 500 buyers with demand schedules similar to the market demand schedule of the three buyers in the table above, then the quantity of bushels of wheat demanded at \$5 by the 500 buyers would be:

A. 8,500
B. 12,000
C. 18,500
D. 26,000

3. Which is a determinant of the demand for housing?

A. The price of lumber
B. Wages for electricians
C. The price of housing
D. Changes in the expected future price of housing

4. Refer to the above diagram, which shows three demand curves for coffee. Which would cause the change in the demand for coffee illustrated by the shift from D1 to D2?

A. A decrease in the price of tea
B. An increase in consumer incomes
C. An increase in the price of sugar
D. A technological improvement in the production of coffee

5. Which of the following goods are not close substitutes?

A. Peanut butter and jelly
B. Margarine and butter
C. Beef and chicken
D. Tea and coffee

6. Refer to the above graph. A decrease in demand would best be reflected by a change from:

A. Point 4 to 6
B. Point 1 to 3
C. Line A to B
D. Line A to C

7. Which is a determinant of supply?

A. Tastes and preferences
B. Technology
C. Consumer income
D. Number of consumers

8. Refer to the above table. A technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price. As a result of this technological change, equilibrium output in this market:

A. Decreased by 60 units
B. Increased by 60 units
C. Increased by 30 units
D. Decreased by 30 units

9. A surplus of any given commodity can be expected whenever the:

A. Prevailing price of the good is below the equilibrium price
B. Prevailing price of the good is above the equilibrium price
C. Prevailing price of the good is equal to the equilibrium price
D. Amount demanded exceeds the amount supplied

10. In a competitive market, if the existing price is below the equilibrium price, market forces will drive the price:

A. Up and quantity supplied up
B. Up and quantity supplied down
C. Up and supply up
D. Down and demand down

11. A television station reports that more people are purchasing personal computers. A likely explanation for this event would be a(n):

A. Increase in the demand for and the supply of computers
B. Decrease in the demand for and the supply of computers
C. Increase in the supply of computers and a decrease in the demand for computers
D. Decrease in the supply of computers and an increase in the demand for computers

12. An increase in demand for oil and an increase in supply of oil will:

A. Decrease price and increase quantity
B. Increase price and decrease quantity
C. Increase quantity, but whether it increases price depends on how much each curve shifts
D. Increase price, but whether it increases quantity depends on how much each curve shifts

13. Refer to the four graphs above. Select the graph that best shows the change to demand and supply in a particular market given the following situation: In the market for camera film, consumers show greater interest in digital cameras that do not use film and producers of film have a reduction in labor costs.

A. Graph A
B. Graph B
C. Graph C
D. Graph D

14. What combination of changes would most likely decrease the equilibrium price?

A. When supply decreases and demand increases
B. When demand increases and supply increases
C. When demand decreases and supply decreases
D. When supply increases and demand decreases

15. An increase in the price of product A together with a decrease in the quantity of A demanded could be the result of a(n):

A. Increase in consumer incomes
B. Increase in the wages of workers making A
C. Decrease in the price of a substitute product
D. Increase in the price of a complementary product

16. Refer to the above table. If supply increased by 2 units at each price, what would the new equilibrium price and quantity be?

A. \$4 and 5 units
B. \$4 and 6 units
C. \$5 and 7 units
D. \$6 and 7 units

17. Refer to the above table. If demand increased by 4 units at each price, what would the new equilibrium price and quantity be?

A. \$3 and 4 units
B. \$4 and 5 units
C. \$5 and 7 units
D. \$6 and 6 units

18. Refer to the above table. If demand increased by 4 units at each price and supply increased by 2 units at each price, what would the new equilibrium price and quantity be?

A. \$3 and 5 units
B. \$4 and 3 units
C. \$5 and 7 units
D. \$6 and 6 units

19. Refer to the above graph. Given this market, if the government pre-sets the price at \$60, then this action results in a:

A. Shortage of 5,000 units
B. Surplus of 5,000 units
C. Surplus of 50,000 units
D. Shortage of 45,000 units

20. The supply curve and its direct relationship between price and quantity supplied is based on the assumption that:

A. All other are equal
B. Demand equals supply
C. Technology changes
D. Taxes change

SOLUTION DESCRIPTION: Completed Solution is attached. Click on Buy button and then download file to get full solution.

SUBJECTS / CATEGORIES:
1. Business Economics
2. Economics
3. Microeconomics

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