ECON 101 Lecture Notes - Lecture 6: Noodle, Inferior Good, Oligarchy
ECON 101 Full Course Notes
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1
The following table shows the market demand schedule and supply schedule for notebooks.
|
Price ($/unit) |
Quantity Demanded (units) |
Quantity Supplied (units) |
|
1 |
20 |
4 |
|
2 |
16 |
6 |
|
3 |
14 |
10 |
|
4 |
12 |
12 |
|
5 |
10 |
14 |
|
6 |
7 |
17 |
|
7 |
4 |
20 |
|
8 |
2 |
22 |
|
9 |
1 |
25 |
Refer to the table above. Assume that the market for notebooks is in equilibrium.
1. Which of the following is likely to happen if there is an increase in the school enrollment rate, everything else remaining unchanged?
A. Both the equilibrium price and quantity of notebooks decrease.
B. The equilibrium price and quantity remain unchanged.
C. Both the equilibrium price and quantity of notebooks increase.
D. The equilibrium price increases, but the equilibrium quantity of notebooks decreases.
2. A shortage occurs in a market when:
A.price is lower than the equilibrium price.
B. price is higher than the equilibrium price.
C. supply exceeds demand.
D. the marginal utility of consumption is negligible.
3. A change in the quantity demanded of a good is:
A. the outcome of a change in income.
B. the outcome of a change in tastes and preferences.
C. represented by a shift to a new demand curve.
D. represented by a movement along the demand curve.
4. The following table shows the demand schedules of three consumers of wine. Assume that these three buyers constitute the entire market.
|
PRICE ($/Bottle) |
Sandra's Demand (Bottles) |
David's Demand (Bottles) |
Mary's Demand (Bottles) |
|
â$8 |
2 |
10 |
|
|
â$6 |
14 |
15 |
18 |
|
â$4 |
23 |
24 |
|
|
â$2 |
24 |
27 |
28 |
Refer to the table above. If the market price of wine is $8/bottle, and the market demand for wine is 19 bottles, David's consumption of wine is:
A. 12 bottles.
B. 9 bottles.
C. 4 bottles.
D. 7 bottles.
5. Which of the following factors will NOT cause a shift in the demand for a good?
A. A change in the number of consumers
B. A change in the market price of the good
C. A change in tastes and preferences
D. A change in consumer incomes
6. Are all markets perfectly competitive?
A. No, there are other market types where firms have considerable power to control the price.
B. Yes, any economic system with a market structure is by definition perfectly competitive.
C. No, there are also command and control markets that are run by a central government.
D. No, in other types of markets, sellers offer identical goods and simply accept the market price.
7. Assume that a seller in a perfectly competitive market charges more than the equilibrium price. It is likely that this seller will:
A. increase his profit.
B. lose only a few buyers.
C. increase his sales.
D. lose almost all of his buyers.
8. The willingness to pay for a commodity:
A. increases as the consumption of the commodity increases.
B. is always less than the market price of the commodity.
C. decreases as the consumption of the commodity increases.
D. is always greater than the market price of the commodity.
9. Which of the following is likely to lead to a right shift in the supply curve of cotton?
A. An increase in labor productivity due to training programs
B. A rise in labor costs due to wage demands by labor unions
C. An increase in the price of cotton
D. A decrease in the price of cotton
10. The buyers of a good will want to purchase it as long as their willingness to pay for the good is:
A. equal to zero.
B. greater than or equal to the price.
C. greater than zero.
D. less than the price.
1 an imperfect market, individual firms
| A.are always able to set the price of their product. |
| B.are able to influence the price of their product. |
| C.have no influence over the price of their product. |
| D.take the market price as given. 1 Which of the following is NOT characteristic of a market economy?
2 In a competitive market, the price of the product is
3 Which of the following firms participates in a competitive market?
4 In an imperfect market, individual firms
5 Which of the following firms operates as a monopoly?
6 According to the law of demand, what is the relationship between price and quantity demanded?
7 Refer to the following graph. The demand curve slopes downward because
8 A change in which of the following will cause a change in the quantity demanded of coffee?
9 Suppose that burgers and fries are complements in consumption. If the price of fries increases
10 Suppose that Coca Cola and Pepsi are substitutes in consumption. If the price of Coca Cola decreases, then
11 According to the law of supply, what is the relationship between price and quantity supplied?
12 Refer to the graph below. The supply curve is _______________ driven by the law of supply.
13 A change in which of the following will cause a change in the quantity supplied of coffee?
14 Which of the following will cause a rightward shift in the supply curve for tobacco?
15 Flour is a factor of production of cupcakes. How will an increase in the price of flour affect the market for cupcakes?
16 Refer to the following image. When a market is in equilibrium, which of the following is true?
17 Refer to the following figure. At a price of $15, this market is experiencing a(n)
18 Refer to the following figure. At a price of $5, this market is experiencing
19 Suppose pasta salad is a normal good. If the price of pasta (a major ingredient in pasta salad) increases and income also increases, the
20. What must happen to the market price in order for a shortage to be eliminated?
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