Peactice Midterm

Question 1

Which of the following would be expected to cause an increase in the supply of fax machines?

Answer 1

A decrease in the cost of manufacturing tax machines

Question 2

If market supply increases, equilibrium price will:

Answer 2

Fall, causing a movement along the demand curve.

Question 3

If the govt puts a tax on gas of $0.25 per gallon and the demand curve for gas is downward slipping, the supply of gas will:

Answer 3

Shift upward and the price will increase by less than $0.25 per gallon

Question 4

The principle of increasing marginal opportunity cost holds in which of the following cases?

Answer 4

Some inputs are better for producing particular goods

Question 5

The supply of leather jackets would be expected to increase as a result of:

Answer 5

A decrease in the cost of producing leather jackets