Self-Test: Multiple-Choice Questions At the market equilibrium price, the quantity

Self-Test: Multiple-Choice Questions

a. supplied just equals the quantity demanded.

b. supplied exceeds the quantity demanded by the maximum amount.

c. demanded exceeds the quantity supplied by the maximum amount.

d. supplied and the quantity demanded equal zero.

2. If the price of automobiles increases, it is likely that fewer automobile batteries will be purchased at any given price because automobiles and batteries are

a. inferior goods.

b. normal goods.

c. substitute goods.

d. complementary goods.

3. Suppose that an increase in their incomes induces consumers to purchase more oranges at any given price. Also suppose that an abundant orange harvest results in a lower price, causing consumers to purchase more oranges. These situations are characterized respectively by a(n)

a. increase in quantity demanded, and a decrease in demand.

b. decrease in quantity demanded, and an increase in demand.

c. increase in demand, and an increase in quantity demanded.

d. decrease in demand, and an increase in quantity demanded.

4. A decrease in the price of calculators accompanied by an increase in the quantity sold would result from a(n)

a. decrease in demand.

b. increase in demand.

c. decrease in supply.

d. increase in supply.

5. An increase in income will

a. increase the demand for inferior goods and decrease the demand for normal goods.

b. increase the demand for normal goods and decrease the demand for inferior goods.

c. increase the demand for inferior goods and leave the demand for normal goods unchanged.

d. increase the demand for normal goods and leave the demand for inferior goods unchanged.

6. If the market price is below the equilibrium price, the

a. price will increase, the quantity demanded will increase, and the quantity supplied will decrease.

b. price will increase, the quantity demanded will decrease, and the quantity supplied will increase.

c. price will decrease, the quantity demanded will increase, and the quantity supplied will decrease.

d. price will decrease, the quantity demanded will decrease, and the quantity supplied will increase.

7. The supply curve for gasoline will shift to the right in response to all of the following except

a. an increase in the availability of crude oil used in gasoline production.

b. seller expectations of the development of gasoline-conserving automobiles.

c. technological improvements in the production of gasoline.

d. lower prices of labor and capital used in gasoline production.

8. Over a period of time, suppose that both the price and quantity of grapefruit sold increases. This could be caused by a(n)

a. increase in the supply of grapefruit.

b. decrease in the supply of grapefruit.

c. increase in the demand for grapefruit.

d. decrease in the demand for grapefruit.

9. As the price of a good increases, consumers tend to switch their purchases toward substitutes and away from this good. This explains why the demand curve for this good

a. is vertical.

b. is horizontal.

c. slopes upward to the left.

d. slopes downward to the right.

10. A shortage of corn will occur when

a. the quantity of corn demanded exceeds the quantity supplied.

b. the quantity of corn supplied exceeds the quantity demanded.

c. corn production is higher this year than last year.

d. corn production is lower this year than last year.