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ECO 2301
Sec 002
Spring 2015
K. Becker
QUIZ #6
Wednesday, March 4th
Solutions
Choose the best answer to each of the following questions
1. The law of supply can be stated as:
A. all else equal, quantity supplied rises as price falls.
B. all else equal, quantity supplied rises as price rises.
C. all else equal, quantity supplied rises as income rises.
D. all else equal, quantity supplied rises as income falls.
2. The supply schedule assumes that:
A. factors other than price remain the same.
B. factors other than price must change.
C. factors other than supply remain the same.
D. factors other than supply must change.
3. Some nonprice determinants of supply are:
A. prices of related goods, technology, prices of inputs, expectations, and the number of sellers.
B. consumer preferences, the price of the good, and prices of related goods.
C. expectations and number of buyers in the market.
D. prices of related goods, technology, and consumer preferences.
4. The term equilibrium refers to the point where:
A. quantity supplied equals quantity demanded.
B. buyers and sellers "agree" on the quantity of a good they are willing to exchange at a given
price.
C. the supply curve and demand curve intersect.
D. All of these statements are true.
5. The term "shortage" refers to:
A. a situation in which the quantity supplied is less than the quantity demanded.
B. a situation in which the quantity demanded is less than the quantity supplied.
C. a market in which transactions have to be sold quickly or the goods tend to rot or otherwise
expire.
D. a signal that producers need to decrease the price of the good.
6. A shortage will occur if:
A. the quantity being supplied at a given price is less than the quantity demanded at that price.
B. the quantity being supplied at a given price exceeds the quantity demanded at that price.
C. there are not enough buyers in the market.
D. there are only inexperienced firms in the market.
7. Consider a market that is in equilibrium. If it experiences an increase in demand, what will
happen?
A. The demand curve will shift to the right, and the equilibrium price and quantity will rise.
B. The demand curve will shift to the right, and the equilibrium price will increase and the
equilibrium quantity will decrease.
C. The demand curve will shift to the right, and the equilibrium price and quantity will fall.
D. The demand curve will shift to the left, and the equilibrium price and quantity will fall.
8. Consider a market that is in equilibrium. If it experiences both an increase in demand and an
increase in supply, what can be said of the new equilibrium?
A. The equilibrium price and quantity will both rise.
B. The equilibrium quantity will definitely rise, while the equilibrium price cannot be predicted.
C. The equilibrium price will definitely rise, while the equilibrium quantity cannot be predicted.
D. The equilibrium price and quantity will both fall.