Test 1

A  leftward shift in supply keeping demand constant.

B  rightward shift in supply and demand.

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  excess supply

B  Excess demand

C  not enough information provided to answer the question

D  excess production

A  Rare metal coins

B  Chanel Shoes

C  Lamborghini

D  Student slot into Harvard Medical School

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

B  Not enough information provided to answer the question

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

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

A  a surplus of apartments

B  excess supply

C  a shortage of apartments

D  no effect

A  the market price is at the equilibrium price

B  the market price is below equilibrium

C  price is most likely going to decline

D  the market price is above equilibrium

A  excess demand

B  a surplus

C  excess supply

D  no effect

A  the equilibrium quantity will fall

B  the equilibrium price will decrease

C  the equilibrium price will increase

D  the supply curve will shift again after demand meets supply

A  A change in income

B  A change in taxes on consumers

C  None of the available answers

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

A  Total expenditures will decline

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

C  Total expenditures will increase

D  The total quantity will decline

A  TRUE

B  FALSE

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

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

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

D  quantity of natural gas exports produced to increase.

A  A change in the price of a substitute good

B  A change in advertising expenditures

C  A change in the price of the good

D  A change in society’s income

A  includes only monetary outlays.

B  is nonexistent for some choices.

C  is the same as sunk cost.

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

A  down, the quantity demanded goes down.

B  up, the quantity demanded goes down.

C  down, the quantity demanded stays the same.

D  up, the quantity demanded also goes up.

A  falls, lowering their equilibrium price and quantity.

B  rises, raising their equilibrium price and quantity.

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

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

A  we are considering changes in just one factor.

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

C  an equilibrium price has been reached.

D  an equilibrium quantity has been reached.

A  TRUE

B  FALSE

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

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

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

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

A  total cost and total benefit.

B  marginal cost and marginal benefit.

C  marginal cost, sunk cost, and total benefit.

D  sunk cost and marginal cost.

A  a shortage will develop.

B  a surplus will develop.

C  the supply curve will shift to the right.

D  the demand curve will shift to the left.