Econ 103 PDF

Skip To Content Question 1 1 / 1 pts The money price of a litre of milk is $3.33 and the money price of a litre of gasoline is $1.11. The relative price of a litre of gasoline in terms of milk is $2.22. Correct! 1/3 litre of milk. $3.33. 3 litr...

Skip To Content Question 1 1 / 1 pts The money price of a litre of milk is $3.33 and the money price of a litre of gasoline is $1.11. The relative price of a litre of gasoline in terms of milk is $2.22. Correct! 1/3 litre of milk. $3.33. 3 litres of milk. $1.11. Question 2 1 / 1 pts Why is a relative price an opportunity cost? A relative price is an opportunity cost because it is constant is determined by supply and demand increases as we buy more of a good Correct! tells us how much of one good we must give up to get another good is given in dollars and cents Question 3 1 / 1 pts The law of demand states that, other things remaining the same the higher the price of a good, the greater is the quantity demanded. as income increases, willingness to pay for the last unit purchased increases.  the higher the price of a good, the smaller is demand. Correct! the higher the price of a good, the smaller is the quantity demanded. price and quantity demanded are positively related. Question 4 1 / 1 pts An increase in the price of ground beef increases the demand for ground beef. decreases the demand for ground beef. Correct! increases the demand for chicken, a substitute for ground beef. increases the quantity demanded of ground beef.  increases the demand for hamburger buns, a complement of ground beef. Question 5 1 / 1 pts Use the figure below to answer the following questions. Figure 3.2.1 Point A in Figure 3.2.1 indicates that the apple market will not be in equilibrium if the price of an apple is $1. consumers will only pay $1 for any apple. Correct! if the price is $1, consumers will plan to buy 4,000 apples. if the price is more than $1, consumers will buy 9,000 apples. $1 is the least that consumers are willing to pay for the 4,000th apple. Question 6 1 / 1 pts Use the figure below to answer the following questions. Figure 3.2.1 What does a movement along the demand curve in Figure 3.2.1 from point A to point B show? a decrease in the demand for apples an increase in the demand for apples  Correct! an increase in the quantity of apples demanded a decrease in the quantity of apples demanded a movement from a point of efficiency to a point of inefficiency Question 7 1 / 1 pts Use the figure below to answer the following questions. Figure 3.2.1 Given Figure 3.2.1, under what condition are consumers willing to buy more than 9,000 apples per week? if the price of an apple is above $1 if the price of an apple is between $1 and $0.50 if the price of an apple is $0.75  Correct! if the price of an apple is below $0.50 if the price of an apple is between $1 and $1.50 Question 8 1 / 1 pts Use the figure below to answer the following questions. Figure 3.2.1 Which one of the following would result in a movement from point A to point B in Figure 3.2.1? an increase in population a rise in the price of bananas a rise in the price of oranges Correct! a fall in the price of apples public concern about chemicals sprayed on apples Question 9 1 / 1 pts Use the figure below to answer the following questions. Figure 3.2.2 Which one of the following would result in the demand curve shifting from D 1 to D 2 in Figure 3.2.2?  a fall in the price of pizza a rise in the price of Coke, a complement of pizza Correct! a rise in the price of spaghetti, a substitute for pizza a rise in the price of pizza an increase in the supply of pizza Question 10 1 / 1 pts Use the figure below to answer the following questions. Figure 3.2.2 Refer to Figure 3.2.2. Which one of the following represents a decrease in quantity demanded? Correct! a movement from B to A a shift from D1 to D2  a movement from A to B a movement from the origin to any point on D1 a shift from D2 to D1 Question 11 1 / 1 pts Use the figure below to answer the following questions. Figure 3.2.2 Refer to Figure 3.2.2. If consumers' income increases the quantity of pizzas supplied decreases. the quantity of pizzas demanded increases. the supply of pizzas increases. a movement from point A to point B on D1 occurs. Correct! the demand curve for pizzas shifts from D1 to D2 if a pizza is a normal good. Question 12 1 / 1 pts The price of good X falls and the demand for good Y decreases. We can conclude that X and Y are complements. X and Y are substitutes in production. Correct! X and Y are substitutes. X is an inferior good. X is a normal good. Question 13 1 / 1 pts Which of the following "other things" are not held constant along a demand curve? Correct! the price of the good itself  preferences prices of related goods income expected future income and credit Question 14 1 / 1 pts What is the quantity demanded of a good or service? The quantity demanded of a good or service is equal to the quantity supplied. the same as the demand for a good or service. Correct! the amount that consumers plan to buy during a given time period at a particular price.  the quantity that people want to buy at a given price but might not be able to afford. the quantity bought in a given time period at a particular price. Question 15 1 / 1 pts When the price of a latte is $3, Eric buys 5 lattes a week. When the price of a latte is $5, Eric buys 3 lattes a week and starts to drink tea. What is his substitution effect and his income effect? Eric's substitution effect is shown by a movement up along his demand curve for lattes and his income effect is the leftward shift of his demand curve for lattes. Correct! Eric's substitution effect is that he buys more tea and fewer lattes. And faced with a tighter budget he buys even fewer lattes, which is his income effect. Eric has neither a substitution effect nor an income effect. He just doesn't like to pay $5 for a latte so he drinks fewer lattes.  Eric's substitution effect and income effect are both shown by the leftward shift of his demand curve for lattes. Eric's substitution effect is that he buys more tea and fewer lattes. He doesn't have face an income effect because his income hasn't changed. Question 16 1 / 1 pts The law of supply tells us that other things remaining the same, as the supply of chocolate increases, the price of chocolate falls. price of chocolate rises, the quantity of chocolate supplied decreases. cost of producing chocolate falls, the supply of chocolate will increase. Correct! price of chocolate falls, the quantity of chocolate supplied decreases.  cost of producing chocolate increases, the price of chocolate rises. Question 17 1 / 1 pts Which one of the following would not shift the supply curve of good X to the right? a fall in the price of the factors of production used in producing X an increase in the price of Y, a complement in production of X a technological change that increases production of X a fall in the price of Y, a substitute in production of X Correct! a rise in the price of X Question 18 1 / 1 pts A shift of the supply curve of pumpkins occurs if there is a change in the price of squash, which is a substitute for pumpkins. Correct! a flood that destroys pumpkin farms. a change in income. a change in the price of pumpkins. people start to prefer pumpkin pie over apple pie. Question 19 1 / 1 pts What is an example of the law of supply in action? Correct!  The price of hand sanitizer rises so firms produce more hand sanitizer. People are willing to pay a higher price for hand sanitizer during a pandemic. During the pandemic, distilleries start to produce hand sanitizer. A shortage of hand sanitizer occurred during the pandemic. The price of hand sanitizer falls, so people buy more hand sanitizer. Question 20 1 / 1 pts Use the figure below to answer the following questions. Figure 3.4.1 At price P 3 in Figure 3.4.1 Correct! there is a surplus in the amount of Q5 - Q1. there is a shortage in the amount of Q5 - Q1.  this market is in equilibrium. there is a tendency for the price to rise. equilibrium quantity is Q5. Question 21 1 / 1 pts Use the figure below to answer the following questions. Figure 3.4.1 At price P 2 in Figure 3.4.1, which one of the following is not true? There is no surplus. Correct! The quantity demanded is Q1. This market is in equilibrium. The quantity demanded is equal to the quantity supplied. The quantity supplied is Q3. Question 22 1 / 1 pts Use the figure below to answer the following questions. Figure 3.4.1 At price P 1 in Figure 3.4.1  Correct! there is a shortage in the amount of Q4 - Q2. the equilibrium quantity is Q2. there is a tendency for the price to fall. the equilibrium quantity is Q4. there is a surplus in the amount of Q4 - Q2. Question 23 1 / 1 pts Use the figure below to answer the following questions. Figure 3.4.1 At price P 1 in Figure 3.4.1 a surplus exists. Correct! producers can sell all they plan to sell.  consumers can buy all they want. both sides of the market are able to carry out their desired transactions. producers are unwilling to sell any goods. Question 24 1 / 1 pts Which one of the following correctly describes how price adjustment eliminates a surplus? As the price rises, the quantity demanded decreases and the quantity supplied increases. Correct! As the price falls, the quantity demanded increases and the quantity supplied decreases. As the price falls, the demand for substitutes decreases, which eliminates the surplus. As the price rises, the quantity demanded increases and the quantity supplied decreases.  As the price falls, the quantity demanded decreases and the quantity supplied increases. Question 25 1 / 1 pts Which one of the following correctly describes how price adjustment eliminates a shortage? As the price rises, the quantity demanded increases and the quantity supplied decreases. As the price falls, the quantity demanded decreases and the quantity supplied increases. As the price falls, the quantity demanded increases and the quantity supplied increases. As the price falls, the quantity demanded increases and the quantity supplied decreases. Correct! As the price rises, the quantity demanded decreases and the quantity supplied increases. Question 26 1 / 1 pts If the market for Twinkies is in equilibrium, then producers would like to sell more at the current price. consumers would like to buy more at the current price. Twinkies must be a normal good. there is a surplus. Correct! the equilibrium quantity equals the quantity demanded. Question 27 1 / 1 pts Use the figure below to answer the following questions. Figure 3.5.1 If the demand curve is D 2 in Figure 3.5.1 there is a shortage in the amount of Q2 - Q0. the equilibrium price is P2 and the equilibrium quantity is Q0. Correct!  the equilibrium price is P2 and the equilibrium quantity is Q2. a rise in price will shift the demand curve to D3. the price will rise. Question 28 1 / 1 pts Use the figure below to answer the following questions. Figure 3.5.1 Initially, the demand curve for good A is D 2 in Figure 3.5.1. Suppose good B is a substitute for good A. If the price of B falls Correct! there will be a surplus of good A at P2. the price of A will rise. the demand curve for good A will shift from D2 to D3. the equilibrium quantity of good A will increase. there will be a shortage of good A at P2. Question 29 1 / 1 pts Use the figure below to answer the following questions. Figure 3.5.1 Initially, the demand curve for good A is D 2 in Figure 3.5.1. If income increases and A is a normal good, we would expect to see a movement from point A to point E or point D. B. Correct! C. E. D. Question 30 1 / 1 pts Suppose we observe a rise in the price of good A and a decrease in the quantity of good A bought and sold. Which one of the following is a likely explanation? The demand for A decreased. The law of supply is violated.  The demand for A increased. The supply of A increased. Correct! The supply of A decreased. Question 31 1 / 1 pts Suppose we observe a fall in the price of good A and an increase in the quantity of good A bought and sold. Which one of the following is a likely explanation? The demand for A increased. The law of supply is violated. The demand for A decreased. The supply of A decreased. Correct! The supply of A increased. Question 32 1 / 1 pts When the supply of good A decreases Correct! the equilibrium price rises, and the equilibrium quantity decreases. the equilibrium price falls, and the equilibrium quantity increases. the equilibrium price and the equilibrium quantity increase. the equilibrium price and the equilibrium quantity decrease. a surplus occurs at the original price Question 33 1 / 1 pts If A and B are substitutes and the price of A rises, we will observe  a decrease in the equilibrium price and the equilibrium quantity of B. a decrease in equilibrium price but an increase in the equilibrium quantity of B. an increase in the equilibrium price but a decrease in the equilibrium quantity of B. Correct! an increase in the equilibrium price and the equilibrium quantity of B. a decrease in the demand for A. Question 34 1 / 1 pts If demand decreases and supply increases, then the equilibrium quantity increases, but the effect on the equilibrium price is unknown. effect on both equilibrium price and quantity is unknown.  equilibrium quantity decreases, but the effect on the equilibrium price is unknown. Correct! equilibrium price falls, but the effect on the equilibrium quantity is unknown. equilibrium price rises, but the effect on the equilibrium quantity is unknown. Question 35 1 / 1 pts If we observe a fall in the equilibrium price of good A, we know that the demand for A has increased or the supply of A has decreased or both. not changed. increased or the supply of A has increased or both. Correct!  decreased or the supply of A has increased or both. decreased or the supply of A has decreased or both. Question 36 1 / 1 pts Which of the following will definitely result in an increase in the equilibrium price? an increase in both demand and supply a decrease in both demand and supply Correct! an increase in demand combined with a decrease in supply a surplus of the good a decrease in demand combined with an increase in supply Question 37 0 / 1 pts Use the information below to answer the following questions. Fact 3.5.1 The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed. Refer to Fact 3.5.1. An increase in the price of Pepsi, a substitute for coffee You Answered  raises the price and increases the quantity of coffee demanded. lowers the price and decreases the quantity of coffee demanded. Correct Answer raises the price and increases the quantity of coffee supplied. lowers the price and decreases the quantity of coffee supplied. increases the supply of coffee. Question 38 1 / 1 pts Use the information below to answer the following questions. Fact 3.5.1 The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed. Refer to Fact 3.5.1. A technological improvement lowers the cost of producing coffee. At the same time, preferences for coffee decrease. The equilibrium quantity of coffee increases or decreases depending on whether the price of coffee falls or rises. increases. remains the same. Correct! increases, decreases, or remains the same depending on the relative shifts of the demand and supply curves. decreases. Question 39 1 / 1 pts Use the information below to answer the following questions. Fact 3.5.1 The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed. Refer to Fact 3.5.1. If there is an increase in the wages of farm workers who harvest coffee beans, the equilibrium quantity of coffee  increases or decreases depending on the relative shifts of the supply and demand curves. increases or decreases depending on the slope of the supply and demand curves. remains the same. Correct! decreases. increases. Question 40 1 / 1 pts Use the information below to answer the following questions. Fact 3.5.1 The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed. Refer to Fact 3.5.1. The price of cream falls. Simultaneously, there is an increase in the wages of farm workers who harvest coffee beans. The equilibrium quantity of coffee increases. decreases. Correct! increases, decreases, or remains the same depending on the relative shifts of the supply and demand curves. remains the same. increases or decreases depending on whether the price of coffee rises or falls. Question 41 1 / 1 pts The y- axis intercept of the supply curve is 40 and the slope is 6. The equation of the supply curve is P = 3 + 40QS. QS = 40 + 6P. QS = 40 - 6P. Correct! P = 40 + 6QS. P = 40 - 6QS. Question 42 1 / 1 pts The y- axis intercept of the demand curve is 60 and the slope is - 8. The equation of the demand curve is P = 60 + 8QD. P = 8 - 60QD. QD = 60 + 8P. QD = 60 - 8P. Correct! P = 60 - 8QD. Question 43 1 / 1 pts The demand curve is P = 800 - 25QD. The supply curve is P = 500 + 25QS. At market equilibrium, the equilibrium quantity is ________ and the equilibrium price is ________.  650; 6.0 Correct! 6.0; 650 1,300; zero 0.17; 25 25; 0.17 Question 44 1 / 1 pts The price at which sellers are not willing to supply a good is $70 a unit. As the quantity supplied of the good increases by one unit, the minimum price at which someone is willing to sell that unit increased by $5. What is the equation of this supply curve? P = 70 - 5QS Correct!  P = 70 + 5QS QS = 70 - 5P P = 5 + 70QS QS = 5 + 70P Question 45 1 / 1 pts If a demand curve has a y-axis intercept of 100 and passes through the point (5,20), what is the equation of the demand curve? Correct! P = 100 - 16QD QD = 100 - 16P QD = 5 - 20P QD = 100 + 16P P = 100 + 16QD Quiz Score: 44 out of 45