Test 1

A  Lamborghini

B  Student slot into Harvard Medical School

C  Rare metal coins

D  Chanel Shoes

A  Lamborghini

B  Rare metal coins

C  Student slot into Harvard Medical School

D  Chanel Shoes

A  None of the available answers

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

C  A change in taxes on consumers

D  A change in income

A  A change in the price of a substitute good

B  A change in the price of the good

C  A change in advertising expenditures

D  A change in society’s income

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

B  rises, raising their equilibrium price and quantity.

C  falls, lowering their equilibrium price and quantity.

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

A  an equilibrium quantity has been reached.

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

C  an equilibrium price has been reached.

D  we are considering changes in just one factor.

A  All of the available answers

B  The amount of investment income or interest income you could have earned by investing or loaning out that $10,000

C  The net benefit from saving interest payments on the $10,000 auto loan

D  The foregone interest expense you would have incurred on the $10,000

A  the demand curve will shift to the left.

B  the supply curve will shift to the right.

C  a shortage will develop.

D  a surplus will develop.

A  False

B  True

A  up, the quantity demanded goes down.

B  down, the quantity demanded stays the same.

C  down, the quantity demanded goes down.

D  up, the quantity demanded also goes up.

A  True

B  False

A  the quantity demanded is represented graphically by a curve and demand 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  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  excess production

B  excess supply

C  not enough information provided to answer the question

D  Excess demand

A  excess supply

B  excess equilibrium

C  excess demand

D  Disequilibrium to due to an endogenous shock in the marketplace

A  Equilibrium quantity declined because the decrease in demand and supply both led to a decrease in quantity.  The equilibrium price declined.  This is due to the fact that we are not given information about the relative size of the shifts.  A decrease in demand tends to decrease price, but the decrease in supply tends to decrease price.

B  The change in equilibrium quantity is ambiguous.  A decrease in demand tends to decrease quantity, while a decrease in supply tends to increase quantity. The equilibrium price declined.  This is due to the fact that we are not given information about the relative size of the shifts.  A decrease in demand tends to decrease price, but the decrease in supply tends to decrease price.

C  Equilibrium quantity increased because the decrease in demand and supply both led to an increase in quantity.  The change in equilibrium price is ambiguous.  This is due to the fact that we are not given information about the relative size of the shifts.  A decrease in demand tends to decrease price, but the decrease in supply tends to increase price.

D  Equilibrium quantity declined because the decrease in demand and supply both led to a decrease in quantity.  The change in equilibrium price is ambiguous.  This is due to the fact that we are not given information about the relative size of the shifts.  A decrease in demand tends to decrease price, but the decrease in supply tends to increase price.

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 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.

C  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.

D  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.

A  The total quantity 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 decline

D  Total expenditures will increase

A  a shortage of apartments

B  no effect

C  excess supply

D  a surplus of apartments

A  the equilibrium quantity will fall

B  the supply curve will shift again after demand meets supply

C  the equilibrium price will increase

D  the equilibrium price will decrease

A  equilibrium price increases and quantity decreases

B  equilibrium price decreases and quantity increases

C  equilibrium price and quantity decreases

D  equilibrium price and quantity increases

A  the equilibrium price increases

B  the demand curve will shift back to its original level

C  the supply curve will shift again after demand meets supply

D  the equilibrium price increases, albeit by a negligible amount

A  includes only monetary outlays.

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

C  is nonexistent for some choices.

D  is the same as sunk cost.

A  the marginal revenue it receives from that factory

B  the material costs that go into producing another shoe in that factory

C  the benefit it could have received from investing the $60,000,000 into a clothing factory

D  the costs that it would had incurred if it invested the $60,000,000 into a clothing factory

A  the market price is above equilibrium

B  price is most likely going to decline

C  the market price is at the equilibrium price

D  the market price is below equilibrium

A  marginal cost, sunk cost, and total benefit.

B  marginal cost and marginal benefit.

C  total cost and total benefit.

D  sunk cost and marginal cost.

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

B  leftward shift in demand keeping supply constant.

C  leftward shift in supply keeping demand constant.

D  rightward shift in supply and demand.

A  leftward shift in supply and no shift in demand.

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

C  leftward shift in demand and no shift in supply.

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

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

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

C  quantity of natural gas exports produced to increase.

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

A  False

B  True

A  True

B  False

A  True

B  False