Micro Midterm Review 2

Other thinks constant, which of the following would not cause a change in demand (shift in the demand curve) for mopeds:

• a decrease in consumer incomes

• a decrease in the price of mopeds

• an increase in the price of bicycles

• an increase in people' tastes and preferences for mopeds

 

The common relationship that a higher price leads to a lower quantity demanded and a lower price will lead to a higher quantity demanded, while all other variables are held constant is called    

• Law of supply

• Law of increasing costs

• Law of demand

• Law of diminished marginal utility

 

The common relationship that a higher price will lead to a greater quantity supplied and a lower price will lead to a lower quantity supplied, while all other variables are held constant is called

• law of demand

• law of increasing costs

• law of diminishing marginal returns

• law of supply

 

The extra benefit producers receive from selling a good or service, measured by the price the producer received minus the price the producer would have been willing to accept is called

• producer surplus

• consumer surplus

• equilibrium quantity

• equilibrium price

 

The law of supply says that:

• The lower the price, the more producers will supply

• The higher the price, the more producers will supply

• The lower the price, the more consumers will buy

• The higher the price, the more consumers will buy

 

The point in which the producers will be able to sell the entire supply, and the consumers will be able to buy the exact amount they want is called:

• Price floor

• Voluntary exchange

• Price ceiling

• Equilibrium

 

An effective price ceiling is characterized by:

• price set below the current market clearing price of the good 

• a price set above the current market clearing price of the good

• a shift of the demand curve

• a shift of the supply curve

 

The minimum wage is an example of:

• a price floor that creates a shortage

• a price floor that creates a surplus

• a price ceiling that creates a shortage

• price ceiling that creates a surplus

 If the  government subsidizes the production of halogen headlights, which of the following is true?  (Hint: a subsidy is a payment or economic benefit given by a government to a private entity or household to achieve a public goal).

• The demand curve will shift to the left

• The demand curve will shift to the right

• The supply curve will shift to the left

• The supply curve will shift to the right

 

When the price of pears increases, we expect the following:

• Quantity demanded of pears rises

• Quantity supplied of pears falls

• Quantity demanded of pears falls

• Supply for pears remain the same.