Question 2

The market clearing price is ________.

Question 2 options:

the lowest price that you are willing to pay

the price which creates an excess demand

the price which creates an excess supply

the price which eliminates all excess quantities supplied or excess quantities demanded

None of the above

Question 3

Quantity demanded ________.

Question 3 options:

is the amount of a good a consumer is willing and able to purchase at a given price

is identical to the quantity supplied

is a downward sloping curve

is the amount equal to what producers are willing and able to produce at given prices

All of the above is true

Question 4

Suppose that you are evaluating the market for Kellogg's cereal. The prices of Post and General Mills cereals increase. What will happen to Kellogg's cereals?

Question 4 options:

The demand for Kellogg's cereals increases causing the price to rise.

The quantity supplied of Post cereals will decrease since General Mills prices rose.

The demand will increase and prices falls.

The quantity demanded of Post and General Mills cereals will increase.

All of the above are likely to occur

Question 5

Which of the followingmustlead to an increase in the price for tomatoes?

Question 5 options:

The weather is optimal for growing tomatoes the entire growing season.

There is a successful advertising campaign for tomatoes and the wages fall for tomato farmers.

Researchers discover that tomatoes reduce cancer and the wages increase for tomato farmers.

A technology breakthrough allows farmers to produce more tomatoes with the same inputs.

Question 6

Malik's income rises by 10%.Due to his higher income, his demand for comic books increases by 25%.For Malik, comic books are ______ goods.

Question 6 options:

Inferior

Normal

Neutral

None of the above

Question 7

Initially, the market in Delaware for wristwatches is in equilibrium.In applying the concepts of supply and demand, which of the following will happen at the new equilibrium point in the wristwatch market in Delaware if the demand for wristwatches rises by more than the supply of wristwatches falls in Delaware?

Question 7 options:

A) The quantity of wristwatches will fall in Delaware.

B) The quantity of wristwatches will rise in Delaware.

C) The price of wristwatches will fall in Delaware.

Both (A) and (C) are correct.

Both (B) and (C) are correct.

Question 8

Assume that there is a price floor at the level of P1.What area represents the deadweight loss?

Question 8 options:

Areas 2 + 3

Areas 1 + 2 + 4

Areas 2 + 3 + 4 + 5

Areas 4 + 5

Areas 3 + 5

Question 9

Initially, the market for skateboards is in equilibrium.In applying the concepts of supply and demand, which of the following will happen at the new equilibrium point in the skateboard market if the demand curve shifts to the right by the same amount that the supply curve shifts to the right?

Question 9 options:

The price of skateboards will increase.

The price of skateboards will decrease.

The price of skateboards will stay the same.

There will be a surplus of skateboards in the market.

There will be a shortage of skateboards in the market.

Question 10

At a binding minimum wage, the quantity demanded for labor is less than at equilibrium.Even though the minimum wage is binding, Tony decides not to eliminate any jobs and does not hire any fewer workers.How might the analysis of supply and demand with a binding minimum wage still be correct?

Question 10 options:

Tony will reduce the number of hours per employee.

Tony will pay the employees the equilibrium wage.

Because the quantity supplied of labor is increased, Tony will hire many more employees.

Tony must decrease the price of the goods he is selling.

This is a trick question, the analysis of supply and demand would have to be incorrect in this situation.

Question 11

Lizzie would be willing to pay up to $50 for one new Nintendo Wii game, up to $40 for a second Wii game, up to $30 for a third Wii game, and up to $20 for a fourth Wii game.If the price of a Wii game is $40 each, what is Lizzie's consumer surplus?

Question 11 options:

$140

$40

$30

$20

$10

Question 12

Which statement most accurately defines economics?

Question 12 options:

Economics is the study of how people make money.

Economics is the study of how people make choices to satisfy their wants.

Economics is the study of values that a society should choose.

Economics is the study of how to eliminate scarcity.

Economics is the study of what people need.

Question 13

Shamia announces the following:

"Since the price of oil has risen, it has become profitable to drill in new places in the United States, whereas it was not profitable when prices were lower.New sellers enter the market, using the process of 'fracking' to obtain the oil and gas in the ground.This causes the supply of oil to increase. "

Question 13 options:

This statement is true because the supply of oil would increase.

This statement is false because quantity supplied would increase but not supply.

This statement is false because supply and quantity supplied would not be affected in this scenario.

This statement is false because the supply would decrease.

Question 14

Which of the following statements istrueand therefore represents a difference in the meaning between the terms demand and quantity demanded?

Question 14 options:

Quantity demanded is for a set time period; however, demand doesnothave a set time period.

Quantity demanded has the assumption of ceteris paribus; however, demand doesnothave the assumption of ceteris paribus.

Quantity demanded can move due to changes in price controls or changes in supply; however, demand isnotaffected by changes in price controls or changes in supply.

Quantity demanded shows what people are willing, ready, and able to buy; however, demand only shows what people are ready to buy (even if they arenotwilling and able).

Quantity demanded can move due to a change in the price of substitutes or the price of complements; however, demand isnotaffected by a change in the price of substitutes or the price of complements.

Question 15

There is a binding minimum wage set in Delaware.What would an economist expect?

Question 15 options:

That there will be a surplus of workers willing to work.

That the unemployment rate will increase.

That the unskilled labor force will be most effected.

That more people will be willing to work than previously.

All of the above would be expected.

Question 16

In the United States, it is not legal to sell kidneys.In analyzing the kidney market, the following statement istrue:

Question 16 options:

There is a shortage of kidneys at the price of $0.

Overall, the free market (charging people money for a kidney and allowing people to sell their kidney) would cause less deaths (from kidney failure) since more people would be getting kidney transplants.

The National Waiting List is a non-price rationing device that could be utilized as a result of the inefficiencies of government regulation.

The government regulation of $0 for kidneys acts as a price ceiling.

All of the above are true.

Question 17

Arely sells purses.Recently, consumers expect that the price of purses will increase in the future.Based on this, Arely expects currently that:

Question 17 options:

the demand will shift to the left and price and quantity demanded will decrease.

the demand will shift to the left and price will decrease and quantity demanded will increase.

the demand will shift to the right and price will increase and quantity demanded will decrease.

the demand will shift to the right and price and quantity demanded will increase.

the demand will rotate from a central pivot point to the right and price and quantity demanded will not change.

Question 18

Brandon produces baseball bats.The American Loggers Council is able to restrict production practices and increase the cost of obtaining the wood needed to make the baseball bats.Brandon can expect that:

Question 18 options:

the supply curve will shift to the left and price will increase and quantity will decrease.

the supply curve will shift to the left and price will decrease and quantity will increase.

the supply curve will shift to the right and price and quantity will decrease.

the supply curve will shift to the right and price and quantity will increase.

the supply curve will be a horizontal line and price will increase but quantity will be the same.

Question 19

Which of the following statements istrue?

Question 19 options:

The law of demand shows that there is a positive relationship between the price of any good/service and the quantity demanded, ceteris paribus.

The law of demand shows that there is an inverse relationship between the price of any good/service and the quantity demanded, ceteris paribus.

Demand curves are typically vertical due to the law of demand.

The law of demand is not important in economics.

The law of demand is always true in economics.

Question 20

Why is elasticity of demand greater for goods that are a large share of a consumer's budget?Choose the two answers that explain why this occurs.

Please choose thetwocorrect answers.There aretwoanswers for this question.Each correct response is worth .5 points, for a total of 1 point.

Question 20 options:

An increase in the price of a good that accounts for a relatively large share of the budget means that the consumer would have to significantly reduce spending onothergoods.

Because the consumer will continue to buy the same amount of the good, even if the price changes by a lot.

If the price of the good rises, then it is likely the consumer will cut back on consumption of thesamegood itself.

Purchasing this good will have little effect on theothergoods that can be purchased.