Economics Quiz

At market equilibrium

• quantity demanded equals quantity supplied

• demand and supply curve intersects

• the quantity that sellers are willing to sell and consumers are willing to purchase are the same

• all of the above

An increase in demand and a decrease in supply of a commodity will cause the equilibrium price to

• increase

• decrease

• remain the same

• we cannot say

From the fact that the demand curve is sloping downward, we know that

• when people’s income increases, the quantity bought will increase.

• when the price of the commodity increases, the quantity bought will decrease.

• when the price of the commodity increases, the quantity bought increases.

• when the quantity demanded increases, the quantity supplied will also increase.

An increase in the income of Filipinos wanting computers would

• shift the demand curve downward

• shift the demand curve upward

• induce a movement along the demand curve

• create no effect on the demand curve

When the current price exceeds equilibrium price

• there is a shortage and price will rise

• there is shortage and price will fall

• there is surplus and price will rise

• there is surplus and price will fall

If the demand schedule is written as P = 100-4Q and the supply schedule as P = 40+2Q, the equilibrium price and quantity are: (2points)

• P = 60, Q = 10

• P = 10, Q = 6

• P = 40, Q = 6

• P = 20, Q = 20

Which of the following statements is incorrect? Assume an upward sloping supply curve.

• If supply shifts left and demand remains constant, equilibrium price will rise

• If demand shifts left and supply increase, equilibrium price will rise

• If supply shifts right and demand shifts left, equilibrium price will fall

• If demand shifts right and supply shifts left, price will rise

Which of the following statements is incorrect? Assume an upward sloping supply curve.

• If supply shifts left and demand remains constant, equilibrium price will rise

• If demand shifts left and supply increase, equilibrium price will rise

• If supply shifts right and demand shifts left, equilibrium price will fall

• If demand shifts right and supply shifts left, price will rise

The amount of good Y the consumer is willing to give up to maintain the same satisfaction level decreases as more of good X is acquired.

• Diminishing Rate of Substitution

• Diminishing Marginal Rate of Substitution

• Diminishing Marginal Substitution

• Diminishing Law of Demand Substitution

The set of consumption bundles that are affordable.

• Budget Line
• Opportunity set

• Budget Line

• Rate of Substitution