Test 1

A  rightward shift in supply and demand.

B  leftward shift in supply keeping demand constant.

C  rightward shift in demand and a leftward shift in supply.

D  leftward shift in demand keeping supply constant.

A  The equilibrium quantity decreased, but we can’t tell what happened to the equilibrium price because we aren’t given any information about the relative size of the shifts in supply and demand in the market.

B  The equilibrium price increased, but we can’t tell what happened to the equilibrium quantity because we aren’t given any information about the relative size of the shifts in supply and demand in the market.

C  The equilibrium price decreased, but we can’t tell what happened to the equilibrium quantity because we aren’t given any information about the relative size of the shifts in supply and demand in the market.

D  The equilibrium quantity increased, but we can’t tell what happened to the equilibrium price because we aren’t given any information about the relative size of the shifts in supply and demand in the market.

A  not enough information provided to answer the question

B  excess supply

C  Excess demand

D  excess production

A  Rare metal coins

B  Chanel Shoes

C  Lamborghini

D  Student slot into Harvard Medical School

A  Not enough information provided to answer the question

B  Yes, because the marginal revenue from producing the additional shoe is greater than the marginal costs

C  No, because the additional profits from the sale of the shoe are miniscule compared to the losses in that year

D  No, because Nike already lost $30,000,000 and it should cut its losses and look for additional opportunities

A  a shortage of apartments

B  no effect

C  excess supply

D  a surplus of apartments

A  the market price is above equilibrium

B  the market price is at the equilibrium price

C  the market price is below equilibrium

D  price is most likely going to decline

A  no effect

B  excess supply

C  a surplus

D  excess demand

A  the equilibrium quantity will fall

B  the equilibrium price will increase

C  the supply curve will shift again after demand meets supply

D  the equilibrium price will decrease

A  A change in the price of the good in the model

B  None of the available answers

C  A change in income

D  A change in taxes on consumers

A  Total expenditures will increase

B  The total quantity will decline

C  Demand will decrease in the medical care market initially due to insurance premium costs, but will increase over the long term

D  Total expenditures will decline

A  TRUE

B  FALSE

A  quantity of natural gas exports produced to increase.

B  demand for natural gas exports to shift to the right.

C  supply of natural gas exports to shift to the left.

D  supply of natural gas exports to shift to the right.

A  A change in the price of a substitute good

B  A change in society’s income

C  A change in the price of the good

D  A change in advertising expenditures

A  is the net benefit forgone by not undertaking the next best alternative.

B  includes only monetary outlays.

C  is the same as sunk cost.

D  is nonexistent for some choices.

A  down, the quantity demanded goes down.

B  down, the quantity demanded stays the same.

C  up, the quantity demanded also goes up.

D  up, the quantity demanded goes down.

A  falls, lowering their equilibrium price and raising equilibrium quantity.

B  falls, raising their equilibrium price and lowering equilibrium quantity.

C  rises, raising their equilibrium price and quantity.

D  falls, lowering their equilibrium price and quantity.

A  an equilibrium quantity has been reached.

B  an equilibrium price has been reached.

C  we are considering all the changes which might take place in actual markets.

D  we are considering changes in just one factor.

A  TRUE

B  FALSE

A  the quantity demanded is in an inverse relation with prices, whereas demand is in a direct relation.

B  the quantity demanded is represented graphically by a curve and demand as a point on that curve.

C  demand is represented graphically by a curve and quantity demanded as a point on that curve.

D  the quantity demanded is in a direct relation with prices, whereas demand is in an inverse relation.

A  total cost and total benefit.

B  marginal cost, sunk cost, and total benefit.

C  sunk cost and marginal cost.

D  marginal cost and marginal benefit.

A  a surplus will develop.

B  a shortage will develop.

C  the supply curve will shift to the right.

D  the demand curve will shift to the left.