Microeconomics

Holding all other factors constant, consumers demand more of a good the

• higher its price.

• lower its price.

• steeper the downward slope of the demand curve.

• steeper the upward slope of the demand curve.

If the price of automobiles were to increase substantially, the demand curve for gasoline would most likely

• shift leftward.

• shift rightward.

• remain unchanged.

• become steeper.

The above figure shows a graph of the market for pizzas in a large town. No pizzas will be demanded unless price is less than

• $0

• $5

• $12

• $14

The above figure shows a graph of the market for pizzas in a large town. If the price increases from $7 to $8 per pizza, the quantity of pizzas demanded will

• increase by 20.

• decrease by 30.

• increase by 30.

• decrease by 10.

The supply curve is influenced by

• the income of consumers.

• the number of customers in the market.

• the prices of the inputs required to produce the product.

• the expectations of future profit.

Suppose the market for corn can be expressed as follows. Supply:  Q= -20 + p. Demand:  Q= 100 - p.

Solve for the equilibrium price and quantity.

• P = $60, Q = 40

• P = $40, Q = 60

• P = $25, Q = 45

• P = $60, Q = 60

Suppose a market were currently at equilibrium. A rightward shift of the supply curve would cause a(n)

• increase in price but a decrease in quantity.

• decrease in price but an increase in quantity.

• increase in both price and quantity.

• decrease in both price and quantity.

If the demand curve for a good is horizontal and the price is positive, then a rightward shift of the supply curve results in

• a price of zero.

• an increase in price.

• a decrease in price.

• an increase in the equilibrium quantity.

If price is initially above the equilibrium level,

• the supply curve will shift rightward.

• the supply curve will shift leftward.

• excess supply exists.

• all firms can sell as much as they want.

From the 1970s through the 1990s, the relative price of a college education has increased greatly. During the same time period, college enrollment has also increased. This evidence suggests that during this time period

• the demand curve for a college education has shifted leftward.

• the demand curve for a college education has shifted rightward.

• the supply curve for a college education has shifted leftward.

• the supply curve for a college education has shifted rightward.