Deck 10: Markets

Question 1

If the price of corn increases:

A) there is a change in the supply of corn
B) there is a change in the demand for corn
C) there is a shift in the supply curve of corn
D) none of the other answers

Answer 1

D

Question 2

If the price of a good increases:

A) the quantity supplied will decrease
B) the quantity supplied will increase
C) the supply will increase
D) the supply will decrease

Answer 2

B

Question 3

A market is:

A) an extreme case; all real-world economies are mixed
B) an equilibrium location
C) a physical location where buyers and sellers interact
D) an institution where buyers and sellers interact

Answer 3

D

Question 4

Prices are determined by:

A) the equilibrium condition
B) the interaction of supply and demand in markets
C) the interaction of banks and savers
D) the interaction of shortages and surpluses

Question 5

When a surplus exists:

A) market forces will result in a lower price
B) market forces will result in a higher price
C) equilibrium is found
D) market forces will cause a shortage

Question 6

In equilibrium:

A) all people can eat; there is no hunger
B) all consumers who are willing and able to pay for food can purchase it
C) consumers overeat and become obese
D) supply exceeds demand in high-income nations

Question 7

An increase in the income of China will:

A) enhance farm income in the USA
B) diminish farm income in the USA
C) help US farmers, but not cattle producers
D) help neither farmers nor cattle producers

Question 8

A decrease in the demand for grain due to low-carbohydrate diets will:

A) increase the supply of bread
B) increase the quantity supplied of bread
C) decrease the supply of bread
D) decrease the quantity of bread supplied

Question 9

Higher taxes on gasoline result in:

A) a shift in the supply of gasoline
B) a movement along the supply of gasoline
C) an increase in the demand for gasoline
D) an increase in the supply of gasoline

Question 10

In a competitive industry equilibrium:

A) firms earn zero economic profits
B) firms earn positive economic profits
C) can not tell what level profits are
D) firms face a shortage of the good

Question 11

The best strategy for a competitive firm is to:

A) advertise
B) find a niche for their product
C) enhance the characteristics of the good
D) lower costs

Question 12

If a competitive firm increased advertising to distinguish the good from other goods:

A) sales and revenues would increase
B) sales and revenues would decrease
C) sales and revenues would remain unchanged
D) costs would fall

Question 13

Positive economic profits result in:

A) increased sales
B) increased entry into the industry
C) increased costs
D) increased consolidation of firms in an industry

Question 14

Entry of new firms into the floral industry results in:

A) a change in the supply of flowers
B) a change in the quantity supplied of flowers
C) a shift in the demand for flowers
D) a change in the demand for flowers

Question 15

A market is a:

A) marketplace
B) physical location where buyers and sellers interact
C) institution where buyers and sellers interact
D) institution where prices are legislated

Question 16

The supply curve represents:

A) the equilibrium consumption decisions of firms
B) the voluntary production decisions of firms
C) the required production decisions of firms
D) the equilibrium production decisions of firms

Question 17

The demand curve represents:

A) the equilibrium consumption decisions of households
B) the voluntary consumption decisions of households
C) the required consumption decisions of households
D) the equilibrium production decisions of households

Question 18

The supply curve is derived from:

A) the vertical summation of all individual firm supply curves
B) the horizontal summation of all individual firm marginal cost curves
C) the willingness and ability of firms to produce a good
D) the horizontal summation of all firms average variable cost curves

Question 19

The demand curve is derived from:

A) the vertical summation of all individual consumer demand curves
B) the horizontal summation of all individual marginal cost curves
C) the willingness and ability of firms to produce a good
D) the horizontal summation of all individual consumer demand curves

Question 20

Market equilibrium:

A) shifts due to changes in supply and demand
B) remains constant over time
C) never occurs in real-world markets
D) is only found at the end of each trading period

Question 21

When the price of apples is lower than the equilibrium price:

A) a surplus occurs
B) market forces will decrease the price until equilibrium is reached
C) a shortage occurs
D) the market is in equilibrium

Question 22

When the price of apples is higher than the equilibrium price:

A) a surplus occurs
B) market forces will increase the price until equilibrium is reached
C) a shortage occurs
D) the market is in equilibrium

Question 23

When we study a shift in supply or demand, we assume:

A) habeous corpus
B) ceteris paribus
C) e pluribus unim
D) caveat emptor

Question 24

Supply shifts when:

A) production costs change
B) consumers income increases
C) tastes and preferences change
D) none of the other answers

Question 25

Demand shifts when:

A) production costs change
B) producer technology increases
C) tastes and preferences change
D) none of the other answers

Question 26

An increase in the demand for cotton will result in:

A) an increase in price and quantity of cotton
B) an increase in price and decrease in quantity of cotton
C) a decrease in price and an increase in quantity of cotton
D) a decrease in price and decrease in quantity of cotton

Question 27

A drought in the corn belt will result in:

A) higher grain prices and higher quantities of grain
B) higher grain prices and higher fertilizer demand
C) lower grain prices and lower quantities of grain
D) higher grain prices and lower quantities of grain

Question 28

Favorable weather results in:

A) a rightward shift in the supply of wheat
B) a leftward shift in the supply of wheat
C) a rightward shift in the demand for wheat
D) a leftward shift in the demand for wheat

Question 29

An increase in consumer income will cause:

A) an increase in quantity supplied of ice cream, and an increase in demand for ice cream
B) a decrease in quantity supplied of ice cream, and an increase in demand for ice cream
C) a decrease in quantity demanded of ice cream, and an increase in supply for ice cream
D) an increase in quantity demanded of ice cream, and an increase in supply for ice cream

Question 30

If the price of corn increases:

A) the supply of corn will increase, and the supply of soybeans will increase
B) the quantity supplied of corn will increase, and the supply of soybeans will decrease
C) the demand for corn will increase, and the demand for soybeans will increase
D) the quantity demanded of corn will increase, and the demand for soybeans will increase

Question 31

If the supply of beef increases, and the demand for beef decreases, then:

A) price of beef will increase and quantity of beef will increase
B) impact on beef price is unknown, and quantity of beef increases
C) impact on beef price is unknown, and quantity of beef decreases
D) impact on beef quantity is unknown, and price of beef decreases

Question 32

Markets are beneficial due to:

A) efficiency
B) equitable distribution of income
C) safest way to produce food
D) all of the other answers

Question 33

One downside to markets in agriculture is:

A) volatility
B) producers should earn more money than markets pay them
C) consumers face higher food prices due to factory farming
D) we import too much food from other nations

Question 34

If the production of corn increases due to ethanol, then:

A) the equilibrium price of fertilizer will increase
B) the equilibrium price of fertilizer will decrease
C) no change in fertilizer price
D) not enough information to answer

Question 35

If the price of beef increases, then:

A) consumers will increase the demand for pork
B) consumers will increase the quantity demanded of pork
C) consumers will move along the demand curve for pork
D) consumption of pork will remain unchanged

Question 36

If the price of beef increases, then:

A) supply of leather will increase
B) quantity supplied of leather will increase
C) demand for leather will increase
D) no change in the leather market

Question 37

As the standard of living increases:

A) the demand for inexpensive clothing decreases
B) the quantity demanded of inexpensive clothing decreases
C) the demand for low-cost housing increases
D) the quantity demanded for low-cost housing increases

Question 38

If Walmart lowers the price of broccoli, then:

A) broccoli demand will increase at Walmart
B) brussel sprout demand will increase at Walmart
C) brussel sprout demand will decrease at Walmart
D) quantity demanded of broccoli will decrease at Walmart

Question 39

The equilibrium price is found:

A) when supply and demand are held constant
B) at the intersection of supply and demand
C) at the vertical axis
D) when producers and consumers are in agreement

Question 40

An equilibrium price:

A) is a price that consumers will stop desiring a lower price
B) is a price that producers will accept as "good enough"
C) is where consumers purchase exactly the amount that producers offer
D) can not really occur, since consumers and producers have opposite goals

Question 41

If the imports of grapes increase:

A) the supply of grapes will shift
B) there will be a movement along the supply of grapes
C) the equilibrium price of grapes will increase
D) there will be an increase of domestic grape growers into grape production

Question 42

If advertising for Nike shoes is effective:

A) the demand for Nikes will increase
B) the quantity demanded for Nikes will increase
C) the demand for Adidas will increase
D) not enough information to answer

Question 43

If a new technology is introduced into canola production:

A) the equilibrium price and quantity will increase
B) equilibrium price will increase; quantity will decrease
C) equilibrium price will decrease; quantity will increase
D) equilibrium price will decrease; quantity will decrease

Question 44

If income increases:

A) golf membership demand will increase
B) golf membership demand will decrease
C) used clothes demand will increase
D) McDonalds revenues will increase

Question 45

Biotechnology results in:

A) increased supply of corn
B) increased quantity supplied of corn
C) decreased supply of corn
D) decreased quantity supplied of corn

Question 46

46. Biotechnology results in:

A) increased price, increased quantity of food
B) decreased price, increased quantity of food
C) increased price, decreased quantity of food
D) decreased price, decreased quantity of food

Question 47

If there is a decrease in demand, then there is:

A) increased price, increased quantity
B) decreased price, increased quantity
C) increased price, decreased quantity
D) decreased price, decreased quantity

Question 48

Equilibrium prices:

A) always stay the same
B) change frequently, based on changes in supply and demand
C) change with the stock market
D) not enough information to know

Question 49

49. An increase in hot weather results in:

A) increased demand for air conditioning
B) increased quantity demand for air conditioning
C) decreased demand for air conditioning
D) decreased quantity demand for air conditioning

Question 50

An increase in cold weather results in:

A) increased demand for air conditioning
B) increased quantity demand for air conditioning
C) decreased demand for air conditioning
D) decreased quantity demand for air conditioning

Question 51

Explain and demonstrate how Walmart has become the most successful retailer ever using simple economic principles.

Question 52

Explain and demonstrate the impact of technological change on: A. The market for wheat, and B. An individual wheat producer in the US.

Question 53

Explain and demonstrate the impact of an increase in the production of biofuels on: A. The market for corn, and B. An individual corn producer in Iowa.

Question 54

Use supply and demand graphs to show the impact of a drought on the equilibrium price and quantity of wheat in France.

Question 55

Use supply and demand graphs to show the impact of China's increasing standard of living on the price and quantity of feed grains in the US.

Question 56

Does a surplus exist at a price above or below the market equilibrium price? Use a graph to show this. What will happen if a surplus exists?

Question 57

When will a shortage occur in a market? Use a graph to show a shortage. What will happen if a shortage exists?

Question 58

Demonstrate graphically the impact of ethanol on the corn market.

Question 59

Demonstrate graphically the impact of technological change on the grain market.

Question 60

Demonstrate graphically the impact of a drought on the wheat market.