Econ Exam.

Econ Exam. Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________. A. income gap B. wealth effect C. law of demand D. normal good - CORRECT ANSWER Law Of Demand When economists talk about supply, they are referring to a relationship between price received for each unit sold and the _________________. A. demand schedule B. market price C. quantity supplied D. demand curve - CORRECT ANSWER Quantity Supplied A severe heat wave kills a quarter of the avocado trees in southern California. The impact on the market for avocados will be a leftward shift of: A. the supply curve. B. the demand curve, as consumers try to economize because of the shortage. C. both the supply and demand curves. D. the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price. - CORRECT ANSWER The Supply Curve Which of the following would reduce the supply of smartphones? A. a technological improvement that lowers the cost of producing the smartphones B. higher wage rates for the workers that assemble the smartphones C. a reduction in the price of microprocessors used to produce the smartphones D. a reduction in the price of smartphones. - CORRECT ANSWER Higher wage rates for the workers that assemble the smartphones Interpret the following statement: "An increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market." A. The statement is correct. B. The statement would be correct if "quantity of wheat demanded" were substituted for "quantity of wheat supplied." C. The statement is incorrect because it confuses a change in quantity supplied with a change in supply. D. The statement would be correct if it read that a "decrease in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market." - CORRECT ANSWER The statement is incorrect because it confuses a change in quantity supplied with a change in supply. Which of the following will NOT result in a rightward shift of the market supply curve for labor? A. a decrease in non-wage income B. an increase in the working-age population C. an increase in labor productivity D. an increase in immigration - CORRECT ANSWER an increase in labor productivity When consumers and businesses have greater confidence that they will be able to repay in the future, _______________________. A. the quantity demanded of financial capital at any given interest rate will remain unchanged. B. the quantity demanded of financial capital at any given interest rate will shift to the left. C. the quantity demanded of financial capital at any given interest rate will shift to the right. D. the quantity demanded of financial capital at any given interest rate will achieve equilibrium. - CORRECT ANSWER the quantity demanded of financial capital at any given interest rate will shift to the right.