Macro Economics Chapter 04 Quiz

Question 1

If the demand for a good decreased, what would be the effect on the equilibrium price and quantity?
A: Price would increase, and quantity would decrease.
B: Price would decrease, and quantity would decrease.
C: Price would increase, and quantity would increase.
D: Price would decrease, and quantity would increase

Answer 1

B

Question 2

After a hurricane in Florida knocked out the regional water supply for several days, the demand for bottled water increased sharply. In a market economy, how will this increase in demand affect the equilibrium price and quantity of bottled water? A: Price will increase, and quantity will decrease.
B: Price will decrease, and quantity will decrease.
C: Price will decrease, and quantity will increase.
D: Price will increase, and quantity will increase

Answer 2

D

Question 3

If you were a government official and wanted to raise the price of wheat, which of the following actions would you take?
A: Take wheat from government storage and sell it.
B: Encourage farmers to use more fertilizer.
C: Lower the price of rye.
D: Subsidize purchases of farm equipment.
E: Encourage farmers to grow less wheat

Answer 3

E

Question 4

A technological breakthrough lowers the cost of manufacturing DVDs. As a result, the market changes to a new equilibrium because of a(n):
A: upward movement along the demand curve for DVDs.
B: rightward shift in the demand curve for DVDs.
C: rightward shift in the supply curve for DVDs.
D: shortage of DVDs.

Answer 4

C

Question 5

Which of the following might cause a shift from S1 to S2? 
A: A decrease in input prices.
B: A decrease in consumer prices.
C: An increase in input prices.
D: An increase in consumer income

Answer 5

A

Question 6

Which of the following statements is true of a market?
A: An increase in demand, with no change in supply, will increase the equilibrium price and quantity
B: An increase in supply, with no change in demand, will decrease the equilibrium price and the equilibrium quantity.
C: A decrease in supply, with no change in demand, will decrease the equilibrium price and increase the equilibrium quantity.
D: All of these.

Answer 6

A

Question 7

An increase in both supply and demand causes which of the following?
A: Equilibrium price falls.
B: Equilibrium price rises.
C: Equilibrium price change is indeterminate.
D: Equilibrium quantity decreases.
E: Equilibrium quantity change is indeterminate

Answer 7

C

Question 8

Rent control applies to about two-thirds of the private rental housing in New York City. Economic theory suggests that a below-equilibrium price established by rent control:
A: creates a surplus of rental housing.
B: promotes a rapid increase in the future supply of housing.
C: results in poor service and quality deterioration of many rental units.
D: leads to a reduction in housing discrimination against minorities.

Answer 8

C

Question 9

Suppose a price floor is set by the government above the market equilibrium price. Which of the following will result?
A: There will be a surplus.
B: The quantity demanded will exceed the quantity supplied.
C: The demand curve will shift to the left.
D: None of these.

Answer 9

A