INSTRUCTIONS: Select the BEST answer for each question by marking the circle next to your selection, then click on the [Grade the Test] button at the bottom.
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.
D.
consumers substitute relatively high-priced for relatively low-priced products.
2.
Which of the following will not cause the demand for product K to change?
a change in the price of close-substitute product J
an increase in consumer incomes
a change in the price of K
a change in consumer tastes
3.
Which of the following would not shift the demand curve for beef?
a widely publicized study which indicates beef increases one's cholesterol
a reduction in the price of cattle feed
an effective advertising campaign by pork producers
a change in the incomes of beef consumers
4.
If the price of K declines, the demand curve for the complementary product J will:
shift to the left.
decrease.
shift to the right.
remain unchanged.
5.
A firm's supply curve is upsloping because:
the expansion of production necessitates the use of qualitatively inferior inputs.
mass production economies are associated with larger levels of output.
consumers envision a positive relationship between price and quality.
beyond some point the production costs of additional units of output will rise.
6.
R-1 F03083
Refer to the above diagram. The equilibrium price and quantity in this market will be:
$1.00 and 200.
$1.60 and 130.
$.50 and 130.
$1.60 and 290.
7.
R-2 F03090
Refer to the above diagram. A price of $20 in this market will result in:
equilibrium.
a shortage of 50 units.
a surplus of 50 units.
a surplus of 100 units.
E.
a shortage of 100 units.
8.
R-3 F03140
Which of the above diagrams illustrate(s) the effect of a decrease in incomes upon the market for secondhand clothing?
A and C
A only
B only
C only
9.
Which of the above diagrams illustrate(s) the effect of a governmental subsidy on the market for AIDS research?
D only
10.
An effective ceiling price will:
induce new firms to enter the industry.
result in a product surplus.
result in a product shortage.
clear the market.
