ECON 300 Exam 1 Questions With
Correct Answers
What |would |NOT |cause |the |demand |for |coke |to |shift? |- |CORRECT |ANSWER✔✔-The |cost |of |
producing |coke |increases
What |would |cause |the |supply |curve |to |shift |to |the |left? |- |CORRECT |ANSWER✔✔-An |increase |
in |the |cost |of |raw |materials
If |price |of |beef |decreases, |then |what |will |happen |to |the |demand |for |chicken? |- |CORRECT |
ANSWER✔✔-Decrease
(because |they |are |substitutes)
If |price |of |gas |decreases, |then |what |will |happen |to |the |demand |for |cars? |- |CORRECT |
ANSWER✔✔-Increase
(because |they |are |complements)
If |the |price |of |gas |increases, |then |what |will |happen |to |the |demand |for |cars? |- |CORRECT |
ANSWER✔✔-Decrease
(because |they |are |complements)
Hot |weather |causes |the |demand |curve |for |ice |cream |to |shift |to |the |right. |Why |will |prices |rise |
to |a |new |market-clearing |level? |- |CORRECT |ANSWER✔✔--Shift |demand |curve |to |the |right
-Initially |creating |a |shortage
-Price |rises |to |where |Qs |equals |Qd
, What |would |NOT |occur |if |the |market |price |was |above |the |market-clearing |price? |- |CORRECT |
ANSWER✔✔-Consumers |would |bid |up |the |price
(this |would |NOT |happen)
Things |that |happen |if |the |market |price |is |above |market-clearing |price: |- |CORRECT |
ANSWER✔✔-1. |Producers |lower |their |prices |to |sell |off |excess |inventory
2. |Producers |want |to |produce |and |sell |more |than |consumers |want |to |buy
3. |There |is |a |surplus
A |price |and |quantity |consumed |both |increased |from |one |year |to |the |next. |What |probably |
happened? |- |CORRECT |ANSWER✔✔-Demand |increased |and |supply |remained |constant
***What |factors |determine |the |size |of |a |shortage?
The |extend |of |the |excess |demand |implied |by |the |shortages |will |depend |on: |- |CORRECT |
ANSWER✔✔-The |elasticities |of |supply |and |demand, |where |the |shortages |will |be |larger |is |both
|supply |and |demand |are |more |elastic
If |the |prices |of |beef |and |chicken |are |set |below |market-clearing |levels, |what |will |happen |to |the
|price |of |pork? |- |CORRECT |ANSWER✔✔-Increase
(because |they |are |substitutes)
Since |beef |and |chicken |are |below |market-clearing |price, |demand |will |increase |resulting |in |a |
shortage. |Therefore, |the |price |of |pork |will |go |up |because |it |is |a |substitute |(and |people |will |be |
able |to |find |it |when |there |is |a |shortage |of |the |other |two |meats)
***If |demand |is |perfectly |inelastic, |what |happens |to |price |controls? |- |CORRECT |ANSWER✔✔-
Not |change |the |quantity |demanded
***If |the |government |placed |a |price |ceiling |on |milk |that |is |substantially |below |the |equilibrium
|price, |what |would |happen? |- |CORRECT |ANSWER✔✔-Shortage |of |milk
Correct Answers
What |would |NOT |cause |the |demand |for |coke |to |shift? |- |CORRECT |ANSWER✔✔-The |cost |of |
producing |coke |increases
What |would |cause |the |supply |curve |to |shift |to |the |left? |- |CORRECT |ANSWER✔✔-An |increase |
in |the |cost |of |raw |materials
If |price |of |beef |decreases, |then |what |will |happen |to |the |demand |for |chicken? |- |CORRECT |
ANSWER✔✔-Decrease
(because |they |are |substitutes)
If |price |of |gas |decreases, |then |what |will |happen |to |the |demand |for |cars? |- |CORRECT |
ANSWER✔✔-Increase
(because |they |are |complements)
If |the |price |of |gas |increases, |then |what |will |happen |to |the |demand |for |cars? |- |CORRECT |
ANSWER✔✔-Decrease
(because |they |are |complements)
Hot |weather |causes |the |demand |curve |for |ice |cream |to |shift |to |the |right. |Why |will |prices |rise |
to |a |new |market-clearing |level? |- |CORRECT |ANSWER✔✔--Shift |demand |curve |to |the |right
-Initially |creating |a |shortage
-Price |rises |to |where |Qs |equals |Qd
, What |would |NOT |occur |if |the |market |price |was |above |the |market-clearing |price? |- |CORRECT |
ANSWER✔✔-Consumers |would |bid |up |the |price
(this |would |NOT |happen)
Things |that |happen |if |the |market |price |is |above |market-clearing |price: |- |CORRECT |
ANSWER✔✔-1. |Producers |lower |their |prices |to |sell |off |excess |inventory
2. |Producers |want |to |produce |and |sell |more |than |consumers |want |to |buy
3. |There |is |a |surplus
A |price |and |quantity |consumed |both |increased |from |one |year |to |the |next. |What |probably |
happened? |- |CORRECT |ANSWER✔✔-Demand |increased |and |supply |remained |constant
***What |factors |determine |the |size |of |a |shortage?
The |extend |of |the |excess |demand |implied |by |the |shortages |will |depend |on: |- |CORRECT |
ANSWER✔✔-The |elasticities |of |supply |and |demand, |where |the |shortages |will |be |larger |is |both
|supply |and |demand |are |more |elastic
If |the |prices |of |beef |and |chicken |are |set |below |market-clearing |levels, |what |will |happen |to |the
|price |of |pork? |- |CORRECT |ANSWER✔✔-Increase
(because |they |are |substitutes)
Since |beef |and |chicken |are |below |market-clearing |price, |demand |will |increase |resulting |in |a |
shortage. |Therefore, |the |price |of |pork |will |go |up |because |it |is |a |substitute |(and |people |will |be |
able |to |find |it |when |there |is |a |shortage |of |the |other |two |meats)
***If |demand |is |perfectly |inelastic, |what |happens |to |price |controls? |- |CORRECT |ANSWER✔✔-
Not |change |the |quantity |demanded
***If |the |government |placed |a |price |ceiling |on |milk |that |is |substantially |below |the |equilibrium
|price, |what |would |happen? |- |CORRECT |ANSWER✔✔-Shortage |of |milk
