Technology lowers cost of manufacturing cars. The market changes to a new equilibrium price

because of a rightward shift in the supply curve

If the demand for a good decreased, what's the effect on the equilibrium price and quantity?

price would decrease, and quantity would decrease

An increase in the demand for i phones will lead to a

higher price and larger quantity sold

How would a decrease in the price of feed used to feed pigs affect the market for pork?

the supply of pork would increase, decreasing pork prices

tastes change so that people eat lettuce- what happens to price for cabbage, a sub for lettuce?

Price will decrease, and quantity will decrease

If govt. increases tax per six pack of beer paid by liquor stores, price of beer rises-why?

leftward shift of the supply curve for beer

Which of the following will shift the supply curve to the right, thereby lowering the price?

lower costs for the parts to make the product

Collusion among producers creates higher prices because it

allows producers to artificially restrict their supply

If there is a decrease in demand for tomatoes, we would expect:

both the price and quantity sold to decrease

An increase in income will have what effect on the equilibrium price of meals when dining out?

price will increase, and quantity will increase

A car maker was dumping waste into the creek. Govt finds out and imposes a fine-expectations?

the same number of cars will be made at a higher price

An increase wages paid to welders in a factory will have what effect on the cost of product?

price will increase, and quantity will decrease

An increase in the cost of production results in

a leftward shift in the supply curve

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Macroeconomics Ch. 4 Review

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Questions 28

Answers

1
Price floors are instituted because the govt wants to
help producers
raise tax revenue
increase demand
help consumers
2
Technology lowers cost of manufacturing cars. The market changes to a new equilibrium price
because of a shortage of cars
because of an upward movement along the demand curve.
because of a rightward shift in the demand curve
because of a rightward shift in the supply curve
3
An increased equilibrium price and a decreased quantity results from a (an)
increase in supply.
decrease in supply
increase in demand
decrease in demand.
4
If the demand for a good decreased, what's the effect on the equilibrium price and quantity?
Price would decrease, and quantity would increase
Price would increase, and quantity would decrease
price would decrease, and quantity would decrease
Price would increase, and quantity would increase
5
An increase in the demand for i phones will lead to a
lower price and a smaller quantity sold
higher price and smaller quantity sold
lower price and larger quantity sold
higher price and larger quantity sold
6
Each year around St. Patrick's Day, we would expect
the price of shamrocks to increase
All of the above
the demand for shamrocks to increase
the quantity of shamrocks sold to increase
7
Which of the following is an example of a market failure?
lack of competition
public goods
all of the above
externalities
8
How would a decrease in the price of feed used to feed pigs affect the market for pork?
the supply of pork would increase, decreasing pork prices
the demand for pork would decrease, decreasing pork prices
the supply of pork would decrease, increasing pork prices
the demand for pork would increase, increasing pork prices
9
T/F: Public goods differ from private goods in that their benefits cannot be denied to anyone
False
True
10
If govt sets a price floor above the market price, what happens?
There will be a surplus
There will be a shortage
the quantity supplied will decrease
the quantity demanded will increase
11
True/False If a rent control is imposed, there is no incentive for the owner to fix things.
false
true
12
tastes change so that people eat lettuce- what happens to price for cabbage, a sub for lettuce?
Price will decrease, and quantity will increase
Price and quantity will stay the same
Price will decrease, and quantity will decrease
Price will increase, and quantity will increase
13
Which of the following would decrease the price of brats?
All of the above
An increase in the price of brat buns, a complement to brats
a decrease in price of hot dogs, a substitute for brats.
a technological advance that lowers cost of producing brats
14
If govt. increases tax per six pack of beer paid by liquor stores, price of beer rises-why?
leftward shift of the supply curve for beer
upward movement along the supply curve for beer
upward movement along the demand curve for beer
rightward shift of the supply curve for beer
15
Which of the following will shift the supply curve to the right, thereby lowering the price?
the failure of other businesses making the same product
more features and greater ease of use
higher prices for other goods related to the product
lower costs for the parts to make the product
16
Joey's neighbor is growing a tree that blocks his view of the sunset. Joey is going to court.
This is a considerate neighbor
This is a public good
This is a positive externality
This is a negative externality
17
Collusion among producers creates higher prices because it
causes overproduction and inefficiency
forces producers to be more competitive
creates negative externalities
allows producers to artificially restrict their supply
18
A legally mandated minimum wage is an example of
a fringe benefit of the job
a price ceiling
a price floor
19
If there is a decrease in demand for tomatoes, we would expect:
the price to decrease and the quantity sold to increase
the price to increase and the quantity sold to decrease
both the price and quantity sold to decrease
both the price and quantity sold to increase
20
An increase in income will have what effect on the equilibrium price of meals when dining out?
price will increase and quantity will decrease
price will increase, and quantity will increase
price will decrease, and quantity will increase
price will increase, and quantity will stay the same
21
A car maker was dumping waste into the creek. Govt finds out and imposes a fine-expectations?
more car will be produced at a lower price
fewer cars will be produced at a lower price
fewer cars will be produced at a higher price
the same number of cars will be made at a higher price
22
Which is a public good?
all of the above
clean air
fire department
police protection and law enforcement
23
An increase wages paid to welders in a factory will have what effect on the cost of product?
Price will decrease, and quantity will decrease
price will increase, and quantity will increase
price will increase, and quantity will decrease
price and quantity will stay the same
24
An increase in the cost of production results in
a leftward shift in the supply curve
a leftward shift in the demand curve
a surplus
an increase in the demand
25
People who enjoy the benefits of a public good without paying for them are called
antitrust violators
spillover parties
external consumers
freeriders
26
Externalities are unintended costs or benefits that are imposed on people that results from
poor planning
excessive costs
the econ. activity of others
excessive losses
27
T/F: A public good will be provided in more than efficient quantities by the free market.
False
True
28
Assume a price ceiling is established which is below the market price. What is the result?
equilibrium
shortage
equity
surplus

Macroeconomics Ch. 4 Review Flashcards | StudBud