If there is a surplus of a good, the quantity demanded
<br/><br/>If there is a surplus of a good, the quantity demanded
is ________ the quantity supplied and the price will ________.
A.
greater than; fall
B.
less than; fall
C.
greater than; rise
D.
less than; rise
E.
equal to; fall
The marginal cost of an activity is a measure of ________ the activity.
A.
the benefit derived from every one unit increase in
B.
the benefit derived from every one unit decrease in
C.
what is forgone with every one unit increase in
D.
the total cost of
E.
sunk cost of
Both the demand for and supply of cars changes in France. You observe that the quantity of cars does not change but the price rises. Thus, which of the following occurred?
A.
Demand and supply increased by an equal amount.
B.
Demand increased and supply decreased by an equal amount.
C.
Demand increased by a larger magnitude than supply decreased.
D.
Demand decreased and supply increased by an equal amount.
E.
Demand and supply decreased by an equal amount.
Market equilibrium occurs when
A.
the quantity demanded equals the quantity supplied.
B.
opposing forces pull demand and supply apart.
C.
demand and supply move in opposite direction.
D.
demand and supply change so that are equal at all possible prices.
E.
all markets become equal.
If both the supply and demand curves shift simultaneously, we can always predict what will happen to
A.
both the price and the quantity.
B.
only the price.
C.
either the price or the quantity, but not both.
D.
only the quantity.
E.
neither the price nor the quantity.
To achieve gains from trade, a country
A.
should produce at the midpoint of its PPF.
B.
specializes in the producing a good in which it has a lower opportunity cost.
C.
must produce at a point beyond its PPF.
D.
needs to have an absolute advantage in the production of at least one good.
E.
needs to have an absolute advantage in the production of all goods
In the above figure, Jack’s opportunity cost of producing 1 gallon of soda is ________ of bottled water.
A.
2 gallons
B.
6 gallons
C.
1/4 of a gallon
D.
1/2 of a gallon
E.
1 gallon
If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward, then
A.
More information is needed to determine the effect on the equilibrium price.
B.
the equilibrium price definitely rises.
C.
the equilibrium price definitely falls.
D.
the equilibrium quantity definitely increases.
E.
the equilibrium price definitely remains the same.
The demand for cat food decreases while the supply increases. The equilibrium price of cat food ________, and the equilibrium quantity ________.
A.
rises; decreases
B.
falls; increases
C.
does not change; increases
D.
rises; perhaps changes but we can’t say if it increases, decreases, or stays the same
E.
falls; perhaps changes but we can’t say if it increases, decreases, or stays the same
The technology associated with manufacturing computers has advanced enormously. This change has led to the price of a computer________ and the quantity ________.
A.
falling; increasing
B.
falling; not changing
C.
rising; increasing
D.
rising; decreasing
E.
falling; decreasing
If the price of a movie rises 3 percent and, as a result, the quantity demanded of video rentals increases 6 percent, then the cross elasticity of demand is
A.
2.
B.
9.
C.
-1/2.
D.
-2.
E.
1/2.
The figure above shows the production possibilities frontiers for the United Kingdom and France. If the United Kingdom and France specialize and engage in trade, the United Kingdom will produce ________ and France will produce ________.
A.
both wheat and fish; both wheat and fish
B.
wheat; wheat
C.
fish; wheat
D.
wheat; fish
E.
fish; fish
The price elasticity of supply equals the percentage change in the
A.
quantity demanded divided by the percentage change in the price of a substitute or complement.
B.
supply divided by the percentage change in the demand.
C.
quantity demanded divided by the percentage change in price.
D.
quantity supplied divided by the percentage change in the quantity demanded.
E.
quantity supplied divided by the percentage change in price.
If both supply and demand decrease by the same amount, the equilibrium price
A.
falls.
B.
rises.
C.
cannot be predicted.
D.
does not change.
E.
None of the answers is correct because the price depends on what happens to the equilibrium quantity.
An example of a U.S. export is
A.
matchbooks made in Mexico sold to a buyer in New Jersey.
B.
a TV made in China sold to a buyer in Azerbaijan.
C.
a washing machine made in Indiana sold to a buyer in France.
D.
pasta made in Italy sold to buyers in Spain.
E.
diamonds mined in Africa sold to buyers in South America.
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