1.
| An increase in the price of a product will reduce the amount of it purchased because:
A.
| supply curves are upsloping.
|
B.
| the higher price means that real incomes have risen.
|
C.
| consumers will substitute other products for the one whose price has risen.
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D.
| consumers substitute relatively high-priced for relatively low-priced products.
|
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2.
| Which of the following will not cause the demand for product K to change?
A.
| a change in the price of close-substitute product J
|
B.
| an increase in consumer incomes
|
C.
| a change in the price of K
|
D.
| a change in consumer tastes
|
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3.
| Which of the following would not shift the demand curve for beef?
A.
| a widely publicized study which indicates beef increases one's cholesterol
|
B.
| a reduction in the price of cattle feed
|
C.
| an effective advertising campaign by pork producers
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D.
| a change in the incomes of beef consumers
|
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4.
| If the price of K declines, the demand curve for the complementary product J will:
|
5.
| A firm's supply curve is upsloping because:
A.
| the expansion of production necessitates the use of qualitatively superior inputs.
|
B.
| mass production economies are associated with larger levels of output.
|
C.
| consumers envision a positive relationship between price and quality.
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D.
| beyond some point the production costs of additional units of output will rise.
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6.
|
Refer to the above diagram. The equilibrium price and quantity in this market will be:
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7.
|
Refer to the above diagram. A price of $20 in this market will result in:
B.
| a shortage of 50 units.
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C.
| a surplus of 50 units.
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D.
| a surplus of 100 units.
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E.
| a shortage of 100 units.
|
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8.
|
Which of the above diagrams illustrate(s) the effect of a decrease in incomes upon the market for secondhand clothing?
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9.
|
Which of the above diagrams illustrate(s) the effect of a governmental subsidy on the market for AIDS research?
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10.
| An effective ceiling price will:
A.
| induce new firms to enter the industry.
|
B.
| result in a product surplus.
|
C.
| result in a product shortage.
|
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