QUESTION 1

What is the likely effect on the market for wine of a simultaneous increase in both consumer incomes and producer taxes on wine?

A. an increase in both price and quantity

B. an increase in price and a decrease in output

C. a decrease in price and an indeterminate effect on quantity

D. an increase in price and an indeterminate effect on quantity

QUESTION 2

Suppose that a more efficient way to produce a good is discovered, thus lowering production costs for the good. This will cause a(n)

A.increase in supply.

B. decrease in supply.

C. increase in quantity supplied.

D. decrease in quantity supplied.

QUESTION 3

A product market is in equilibrium?

A. whenever there is no surplus of the product.

B. whenever there is no shortage of the product.

C.when consumers want to buy more of the product than producers offer for sale.

D. where the demand and supply curves intersect.

QUESTION 4

Which of the following statements is true about price ceilings?

A. price ceilings create surpluses for goods but shortages for services.

B.Price ceilings cause goods to be rationed by some other means than legally determined market prices.

C.Ration coupons are the only way to ration goods when price ceilings are in place.

D.All of the other statements are correct.

QUESTION 5

Which of the following goods would most probably be an inferior good?

A.french wines

B.generic beer

C.theater tickets

D.steak

QUESTION 6

A demand curve?

A. shows the relationship between price and quantity supplied.

B.indicates the quantity demanded at each price in a series of prices.

C.graphs as an upsloping line.

D.shows the relationship between income and spending.

QUESTION 7

Which of the following statements about ticket scalping is correct?

A.Scalping tends to be prevalent when there is a surplus of tickets.

B.Scalping tends to be prevalent when there is a shortage of tickets.

C.Scalping benefits only one partythe sellersbut not the buyers.

D.Scalping benefits only one partythe buyersbut not the sellers.

QUESTION 8

A headline reads "Perfect Weather Brings Record-High Coffee Harvest." This situation would lead to a(n)?

A.increase in the price and in the quantity purchased of coffee.

B.decrease in the price and in the quantity purchased of coffee.

C.increase in the price and a decrease in the quantity purchased of coffee.

D.decrease in the price and an increase in quantity purchased of coffee.

QUESTION 9

An increase in the quantity demanded means that?

A.given supply, the price of the product can be expected to decline.

B.price has declined and consumers therefore want to purchase more of the product.

C.the demand curve has shifted to the right.

D.the demand curve has shifted to the left.