Quiz 3 of ECON251 Purdue University In Tutorial Library

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TITLE: Quiz 3 of ECON251 Purdue University

UNIVERSITY / INSTITUTE: Purdue University

CLASS / COURSE: Economics

QUESTION DESCRIPTION:

 

Quiz 3:
 
1. (Points: 0.5)   
  Refer to Figure 3.1 for the questions below. 
 
Figure 3.1
 
In figure 3.1, if demand and supply increase, then equilibrium:
 
a. a. price rises.
b. b. price falls.
c. c. quantity falls.
d. d. quantity rises. 
 
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2. (Points: 0.5)   
  The law of demand states that holding everything else constant:
 
a. a. buyers increase the quantities they buy when their incomes increase.
b. b. there is a positive or up sloping relationship between price and quantity.
c. c. buyers decrease the amount of a good bought when there is more in the market.
d. d. there is an inverse or down sloping relationship between price and quantity. 
 
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3. (Points: 0.5)   
  At the market equilibrium,
 
a. a. quantity demanded is greater than quantity supplied.
b. b. quantity supplied is greater than quantity demanded.
c. c. quantity demanded is equal to quantity supplied.
d. d. quantity supplied determines what quantity supplied will be. 
 
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4. (Points: 0.5)   
  Refer to Figure 3.1 for the questions below. 
 
Figure 3.1
 
In figure 3.1, if demand decreases, then equilibrium:
 
a. a. price and quantity rise.
b. b. price and quantity fall.
c. c. price rises and quantity falls.
d. d. price falls and quantity rises. 
 
  Save Answer  
 
5. (Points: 0.5)   
  The substitution effect results in:
 
a. a. sellers substituting less expensive inputs in production.
b. b. buyers buying more of a good because their purchasing power has increased.
c. c. sellers producing products when input prices fall.
d. d. buyers buying more of a relatively cheaper good. 
 
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6. (Points: 0.5)   
  Which of the following is not held constant along a demand schedule or curve?
 
a. a. The buyer's tastes and preferences
b. b. The buyer's incomes
c. c. The price of the product
d. d. The buyer's expectations about future prices 
 
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7.  (Points: 0.5)   
  If the expected future price of an automobile rises, then:
 
a. a. the supply of automobiles will fall.
b. b. the supply of automobiles will rise.
c. c. the quantity supplied of automobiles will fall.
d. d. the quantity supplied of automobiles will rise. 
 
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8. (Points: 0.5)   
  Which of the following describes what occurs at a market equilibrium?
 
a. a. Everyone who wants to buy at the current price can do so.
b. b. Every seller who is willing to sell at the current price can do so.
c. c. The market is cleared, there is no surplus and no shortage.
d. d. All these correctly describe what happens at a market equilibrium. 
 
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9. (Points: 0.5)   
  If the price of a product increases from $12 to $15:
 
a. a. the demand for the product will decrease.
b. b. the demand for the product will increase.
c. c. the quantity demanded for the product will decrease.
d. d. the quantity demanded for the product will increase. 
 
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10. (Points: 0.5)   
  Refer to Figure 3.1 for the questions below. 
 
Figure 3.1
 
In figure 3.1, if demand and supply decrease, then equilibrium:
 
a. a. price rises.
b. b. price falls.
c. c. quantity falls.
d. d. quantity rises. 
 
  Save Answer  
 
11. (Points: 0.5)   
  Refer to Figure 3.1 for the questions below. 
 
Figure 3.1
 
In figure 3.1, if demand increases and supply decreases, then equilibrium:
 
a. a. price rises.
b. b. price falls.
c. c. quantity falls.
d. d. quantity rises. 
 
  Save Answer  
 
12. (Points: 0.5)   
  The income effect occurs when:
 
a. a. buyers buy more of a good because their purchasing power has increased.
b. b. buyers buy more of a relatively cheaper good.
c. c. sellers produce more output because their profit has increased.
d. d. sellers hire more workers because buyers incomes have increased. 
 
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13. (Points: 0.5)   
  Inferior goods are:
 
a. a. substandard.
b. b. goods whose purchase is inversely related to consumer income
c. c. goods whose purchase is directly related to consumer income.
d. d. goods that do not work. 
 
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14. (Points: 0.5)   
  The existence of a shortage in a market will cause:
 
a. a. market price to rise and quantity supplied to decrease.
b. b. market price to rise and quantity supplied to increase.
c. c. market price to fall and quantity supplied to decrease.
d. d. market price to fall and quantity supplied to increase. 
 
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15. (Points: 0.5)   
  Price in a competitive market is determined by:
 
a. a. sellers unilaterally.
b. b. buyers unilaterally.
c. c. an interaction of demand and supply.
d. d. government. 
 
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16. (Points: 0.5)   
  An advance in technology increases supply:
 
a. a. because new technology is so expensive.
b. b. because labor's or capital's productivity increases and costs of production fall.
c. c. because buyers are willing to buy more of a product produced with the latest technology.
d. d. all of these. 
 
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17. (Points: 0.5)   
  The existence of a surplus in a market will cause:
 
a. a. market price to rise and quantity demanded to decrease.
b. b. market price to fall and quantity demanded to decrease.
c. c. market price to rise and quantity demanded to increase.
d. d. market price to fall and quantity demanded to increase. 
 
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18. (Points: 0.5)   
  The law of supply implies that:
 
a. a. there is a positive or direct relationship between price and quantity supplied.
b. b. the supply curve slopes upward.
c. c. as the price of the product increases, the quantity supplied increases.
d. d. all of these correctly state the law of supply. 
 
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19. (Points: 0.5)   
  Refer to Figure 3.1 for the questions below. 
 
Figure 3.1
 
In figure 3.1, if demand decreases and supply increases, then equilibrium:
 
a. a. price rises.
b. b. price falls.
c. c. quantity falls.
d. d. quantity rises. 
 
  Save Answer  
 
20. (Points: 0.5)   
  The supply of soybeans will NOT increase, if there is:
 
a. a. a technological advance in growing soybeans.
b. b. an increase in the number of soybean farmers.
c. c. a decrease in the price of soybean fertilizer.
d. d. an increase in the price of soybeans. 
 
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SUBJECTS / CATEGORIES:
1. Business Economics
2. Economics
3. Microeconomics
4. Macroeconomics

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