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ECONOMICS 102 QUIZ 3B PENNSYLVANIA STATE UNIVERSITY
Typology: Exercises
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An effective price ceiling
results in an efficient market outcome.
results in an equilibrium market outcome.
creates a surplus.
creates a shortage.
An effective price ceiling results in excess demand, which creates a shortage.
A graphical representation of a demand schedule is a
demand graph.
demand curve.
demand chart.
demand diagram.
A demand curve is a graphical representation of a demand schedule
For a normal good, when income increases,
supply decreases.
demand increases.
supply increases.
demand decreases.
Correct Answer
bakeries will produce more cookies.
bakeries will produce fewer cookies.
bakeries will produce more cakes.
The law of supply states that as the price of a product increases, producers will produce more of
the product, and vice versa, ceteris paribus.
The price of cotton used to produce denim increases. So we expect
the supply of jeans to increase.
the supply of cotton to decrease.
the supply of jeans to decrease.
the supply of cotton to increase.
When the cost of producing a product increases, supply decreases.
the movement from P 1
to P 0
in Graph B.
the movement from S 0 to S 1 in Graph A.
the movement from P 0
to P 1
in Graph B.
A technological development causes an increase in supply, which is represented in Graph A by a
movement from S 0
to S 1
Equilibrium price and quantity occur in a market when
the supply curve intersects the price axis.
the demand curve intersects the price axis.
the producers sell all of the product that they have supplied.
quantity supplied equals quantity demanded.
Equilibrium price and quantity occur in a market when quantity supplied equals quantity
demanded. The intersections of the supply and demand curves with the price axis is irrelevant.
Even if producers have sold all of their inventory, there could be a shortage in the market.
When consumers' income increases, what happens to equilibrium price and quantity for a normal
good?
Figure 2 refers to a decrease in demand.
