ECO 105 Study Guide - Quiz Guide: Ski Lift

1.

Oil refiners can vary the mix of gasoline versus diesel fuel derived from a barrel of oil. If the price of diesel fuel falls relative to the price of gasoline:

a. supply of gasoline will shift to the right.

b. supply of gasoline will shift to the left.

c. supply of both diesel fuel and gasoline will shift, but in opposite directions.

d. supply of diesel fuel will shift to the right.

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2.

If the market price is lower than the equilibrium price a:

a. shortage exists and the market price will rise until it equals the market price and the shortage is eliminated.

b. surplus exists and the market price will fall until it equals the equilibrium price and the surplus is eliminated.

c. surplus exists and the market price will rise until it equals the market price and the surplus is eliminated.

d. shortage exists and the market price will fall until it equals the equilibrium price and the shortage is eliminated.

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3.

The demand for a product tends to be elastic if:

a. it is inexpensive.

b. consumers are slow to respond to price changes.

c. a small proportion of consumer's income is spent on the good.

d. it has many substitutes.

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4. If two goods and services that can be used to fulfill a similar need or desire they are:

a. complements.

b. substitutes.

c. normal goods.

d. independent goods.

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5.

When the product demand curve is Q = 130 - 20P, and price is increased from P1 = $4 to P2 = $6, the arc price elasticity of demand is:

a. -0.1

b. -2.1

c. -3.3

d. -10

1. A change in quantity supplied:

A. refers to a shift in the supply curve.

B. results from a change in a determinant of supply.

C. refers to a movement along a given supply curve.

D. is caused by a change in the number of sellers in the industry.

2. Which one of the following would most likely cause the supply curve for microwaves to shift to the right:

A. a decrease in the price of microwaves.

B. an increase in the wage rate earned by workers who produce microwaves.

C. a decrease in consumer preferences for microwaves.

D. an increase in the number of firms that produce microwaves

3. If the actual price sellers are pricing their goods at is currently above the equilibrium price. There is a ____________. Therefore, we would expect sellers to ____________ the price until the market reaches equilibrium.