The online textbook our class is using:
http://www.inflateyourmind.com/index.php?option=com_content&view=category&id=2&Itemid=7The questions:
Question 1 10 pts
Let's assume that the price of cafeteria food has risen lately. Which of the following explains the higher price? Please pick the answer which explains the hypothetical price increase. Note: the magnitude of the changes in demand and supply are indicated in the answers.
Buyers' incomes have decreased, thus decreasing the demand. Also, it has become slightly more expensive to make the food because of higher labor costs, thus lowering overall supply slightly.
There has been a slight increase in the demand. Also, due to a significant advance in food service efficiency, there has been a strong increase in supply.
Due to the improved service, the demand has increased significantly. Due to slightly lower production costs, supply has increased slightly.
Both supply and demand have increased by the same amount due to buyers' increased incomes, and suppliers' advanced technology and more efficient production.
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Question 2 10 pts
Which of the following causes an increase in equilibrium price and no change in equilibrium quantity?
A decrease in demand and a decrease in supply.
An increase in demand and a decrease in supply.
A decrease in demand and an increase in supply.
An increase in demand and an increase in supply.
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Question 3 10 pts
What will happen to the equilibrium price and quantity of computers (a normal good) if buyers’ incomes rise?
The market price increases and the quantity bought/sold decreases
The market price increases and the quantity bought/sold increases
The market price decreases and the quantity bought/sold increases
The market price decreases and the quantity bought/sold decreases
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Question 4 10 pts
Let's suppose that the equilibrium price of gasoline has increased recently. Which of the following combinations of changes in demand and supply best explains this price increase?
Demand has decreased slightly, and supply has increased significantly.
Demand has increased, and supply has decreased.
Demand has decreased significantly, and supply has decreased slightly.
All of the listed questions are correct.
Demand has increased slightly, and supply has increased significantly.
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Question 5 10 pts
An example of a positive externality is:
a car.
pollution.
a coffee maker.
Hospital health care.
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Question 6 10 pts
The price of a manufactured good (a good you can make in a factory):
increases in the short run if its demand rises, but then decreases in the long run as supply increases (assuming that the cost of production remains constant).
decreases if its demand rises, even in the long run (assuming that the cost of production remains constant).
decreases in the short run if its demand rises, but then increases in the long run as supply increases (assuming that the cost of production remains constant).
increases if its demand rises, even in the long run (assuming that the cost of production remains constant).
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Question 7 10 pts
The law of demand states that:
more products will be demanded at a higher price.
fewer products will be demanded at a higher price.
when incomes rise, this will increase demand and raise the price.
the market price of a product is independent of the quantity demanded.
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Question 8 10 pts
Let's suppose that we are studying the market for orange juice. According to the theory of supply and demand, what happens to the short run market price and quantity of orange juice, if the following two changes occur simultaneously? 1. A new national health report appears in all newspapers, stating that it is healthier to drink orange juice than other juices. A considerable number of people switch to drinking orange juice. 2. There have been production damaging floods in states that grow the oranges, which are used to make orange juice.
The equilibrium price increases, and the equilibrium quantity change is indeterminate.
Both price and quantity changes are indeterminate.
The equilibrium price decreases, and equilibrium quantity increases.
The change in equilibrium quantity is indeterminate, and equilibrium price decreases.
The change in equilibrium price is indeterminate, and equilibrium quantity decreases.
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Question 9 10 pts
What happens to the equilibrium price and quantity of houses, when the following two changes take place: A. eligibility rules for borrowing money have become stricter, making it more difficult for people to finance the purchase of a new house. B. technology to build a house stagnates, making it more expensive to manufacture a house.
The change in the equilibrium price is indeterminate, and the equilibrium quantity increases.
The equilibrium price decreases, and the change in the equilibrium quantity is indeterminate.
The equilibrium price increases, and the equilibrium quantity decreases.
The equilibrium price increases, and the change in the equilibrium quantity is indeterminate.
The equilibrium quantity decreases, and the equilibrium price change is indeterminate.
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Question 10 10 pts
What will happen to the market price and quantity of automobiles if technology advances and this lowers the manufacturers’ cost of production?
None of the listed answers is correct.
The market price increases and the quantity bought and sold at equilibrium decreases.
The market price decreases and the quantity decreases.
The market price decreases and the quantity bought and sold at equilibrium increases.