Eco201 Quiz 2

 1.	Question :
According to the law of demand, the price of a good influences the amount people will choose to purchase.

 	Student Answer:		  False

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

 	Student Answer:		 When the price of hairspray increases, the quantity demanded of hairspray decreases.


 3.	Question :
Suppose the supply and demand tables below reflect the supply and demand for milk per week. At a price of $1, there is a:




 	Student Answer:		shortage of 1000 gallons per week.


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



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


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

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


 6.	Question :
According to the law of supply, supply curves are:

 	Student Answer:
 			 positively sloped.


 7.	Question :
The point at which quantity supplied is exactly equal to quantity demanded is called:

 	Student Answer:		 equilibrium, because quantity demanded equals quantity supplied so there is no tendency for price to change.


 8.	Question :
Refer to the graph below. The effect of an increase in price is best shown by which arrow?



 	Student Answer:	D


 9.	Question :
Studies have shown links between calcium consumption and a reduction in osteoporosis. How does this affect the market for calcium?

 	Student Answer:	The calcium demand curve shifts to the right because of a change in tastes in favor of calcium.


 10.	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.

 	Student Answer:		 True.


 11.	Question :
Use the following table to answer the question. At a price of $4.00, the quantity supplied by the market will be 14.



 	Student Answer:	False

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




 	Student Answer:		 True.


 13.	Question :
If there is an improvement in technology one would expect

 	Student Answer:
 			 a shift downward (or to the right) of the supply curve.


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



 	Student Answer:	4.


 15.	Question :
If the price of air conditioners falls, there will be

 	Student Answer:	an increase in the quantity demanded of air conditioners.


 16.	Question :
Which of the following is a shift factor of supply?

 	Student Answer:	Available technology


 17.	Question :
Coffee growers are an interesting bunch. They are fearful of Columbia's production numbers, since if Columbia has a good year, they flood the market with coffee. Why would coffee growers in other countries rejoice when Columbia has a bad year?

 	Student Answer:
 			 Coffee prices will rise when Columbia has a bad year due to a decrease in supply.


 18.	Question :
Consumers' ability to substitute among different goods explains:

 	Student Answer:	the law of demand.


 19.	Question :
Suppose the supply and demand tables below reflect the supply and demand for milk per week. What is the equilibrium price and quantity of milk?




 	Student Answer:	$2 per gallon and 1500 gallons per week.


 20.	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 above the equilibrium.