Which statement is inconsistent with the Law of Supply

Which statement is inconsistent with the Law of Supply (ceteris paribus)?

A. More of a good will be supplied the higher the price, other things constant. B. Less of a good will be supplied the lower its price, other things constant. C. Quantity supplied of a good is directly related to the good's price. D. More of a good will be supplied the lower its price, other things constant.

When price is above the equilibrium price, some consumers won't be able to buy all the goods they want at that price and thus there will be a shortage

True False

Britain has a comparative advantage in producing woolen clothing and France has a comparative advantage in producing wine. We know, from this fact alone, that:

A. it takes less labor to produce woolen clothing in Britain. B. it takes more labor to produce wine in France C. Britain must be more technically efficient in the production of woolen clothing. D. the opportunity cost of producing woolen clothing is lower in Britain than it is in France.

If the Laws of Supply and Demand are working, the longer a market remains in shortage for a particular good, the:

A. greater the pressure on the price for that good to decrease. B. less the pressure on the price for that good to decrease. C. the greater the pressure on the price for that good to increase. D. the less the pressure on the price for that good to increase.

After the introduction of a quota here in the U.S. on Japanese cars produced in Japan, it is likely that:

A. profits for Japanese auto manufacturers will increase. B. sales for Japanese cars in the U.S. will increase. C. tax revenue to the U.S. Government from the sale of Japanese cars in the U.S. will increase. D. sales of domestic cars (Fords, Chevy's, etc.) will decrease in the U.S.

To an economist using the concept of opportunity cost, when your wages fall or decrease:

A. the opportunity cost of an hour of work decreases. B. the opportunity cost of an hour of leisure decreases. C. you will want to work even more hours according to an economist. D. the opportunity cost of an hour of leisure increases.

The distinction between a change in demand and a change in quantity demanded is best made by saying that:

A. a change in demand is caused by a change in price and a change in quantity demanded is caused by a change in other factors. B. a change in quantity demanded causes a change in demand C. a change in quantity demanded is caused by a change in price and a change in demand is caused by a change in other factors. D. a change in both quantity demanded and demand is caused by a change in price.

Which of the following statements is most accurate or true?

A. Because wages are lower in developed countries, they have a comparative advantage in producing all goods. B. Both developing and developed countries have comparative advantages in producing different goods. C. Because technology is more advanced in developed countries, they have a comparative advantage in producing all goods. D. Comparative advantages cannot be compared across or between countries.

An economic system:

A. must have established means to answer the questions: what is produced, how it is produced, and for whom is it produced for. B. can completely satisfy individuals' wants and desires. C. requires government planning of production and distribution. D. will distribute well-being equitably.

The Law of Supply states that suppliers supply less of a good when its price declines because:

A. the prices of the inputs will decline as the price of the good supplied rises. B. a lower price means the opportunity cost of not supplying the good falls. C. a lower price means the opportunity cost of not supplying the good rises. D. the prices of inputs will rise as the price of the good supplied declines.

Which of the statements is true?

A. The quantity supplied is represented graphically by a curve and supply as a point on that curve. B. The quantity supplied is directly related to price, whereas supply is inversely related to price. C. The quantity supplied is inversely related to price, whereas supply is directly related to price. D. Supply is represented graphically by a curve and quantity supplied as a point on that curve.

In ALL known economies, coordination has involved:

A. coordinating people's wants through the use of markets, regardless of whether those economies were capitalistic, socialistic, or communistic. B. coordinating people's wants through the use of markets and coercion. C. coordinating people's wants neither through the use of markets nor coercion. D. finding ways to limit people's wants and increase their desire to create goods.

An increase in the supply of a good will most likely be caused by:

A. a decrease in its cost of production. B. an increase in consumer incomes. C. a decrease in its price. D. an increase in its price.

When a country imposes a tariff:

A. the domestic price of the imported good rises while the quantity does not change. B. domestic consumption of the good falls while price does not change. C. domestic production of the good falls. D. the domestic price of the imported good rises and quantity consumed falls.

A promise by a Presidential candidate for more funding for cancer research and police enforcement without sacrifice:

A. may be possible if the economy has unemployed resources. B. is possible only in a fully employed economy. C. is possible if the economy is producing on its production possibility curve. D. is impossible in all cases.

Which of the following is least likely to change the supply of personal computers?

A. An increase in the number of consumers in the personal computer market. B. A technological breakthrough that makes it much less costly to produce personal computers. C. A decrease in the wage paid to electrical engineers. D. A environmental regulation that makes it more costly to produce computer chips.

If the Laws of Supply and Demand are working, the longer a market remains in surplus for a particular good, the:

A. greater the pressure on the price of that good to increase. B. less the pressure on the price of that good to increase. C. greater the pressure on the price of that good to decrease. D. less the pressure on the price of that good to decrease.

If an economy is producing inside its production possibility curve, it is using its resources:

A. efficiently. B. optimally. C. wisely. D. inefficiently.

Which of the following is not one of the differences between international trade and domestic trade?

A. International trade typically requires the use of foreign exchange markets. B. There are actual or potential barriers to the flow of inputs in international trade. C. There are actual or potential barriers to the flow of outputs in international trade. D. The law of comparative advantage does not apply in domestic trade, only in international trade.

Given a demand and supply curve, if there is excess demand in a market, we can expect that:

A. prices will fall because some suppliers will find it in their interest to lower prices. B. prices will rise because some suppliers will find it in their interest to raise prices. C. the demand curve will shift to the left to restore equilibrium. D. the demand curve will shift to the right to restore equilibrium.

If demand shifts to the right and supply does not change position, then what will happen?

A. Prices will rise and equilibrium quantity will fall. B. Prices will fall and equilibrium quantity will fall. C. Prices will fall and equilibrium quantity will rise. D. Prices will rise and equilibrium quantity will rise.

Suppose a report states that raspberries from Ecuador may be contaminated with life-threatening bacteria. At the same time, the price of transporting the raspberries to the U.S. increases. Assuming that the shifts in supply and demand are proportional, what is the effect on the market for Ecuadorean raspberries here in the U.S.?

A. A decrease in demand and an increase in supply, thus causing price to decline while quantity remains roughly unchanged. B. An increase in demand and a decrease in supply, thus causing price to increase while quantity remains roughly unchanged. C. An increase in demand and an increase in supply, thus causing quantity to increase while price remains roughly unchanged. D. A decrease in demand and a decrease in supply, thus causing quantity to decrease while price remains roughly unchanged.

Suppliers will supply more of a good when the price of that good rises because the opportunity cost for producing that good has risen.

True

False

In the Factor Market:

A. households supply factors of production to business and are paid by business for doing so. B. households supply factors of production to business and are paid by government for doing so. C. business produces goods and services and sells them to households and business. D. government produces goods and services and supplies them to households and business.

If the supply curve shifts to the right and the demand curve shifts to the left, then what would happen to price?

A. Price would go up. B. Price would go down. C. Price would stay the same. D. Price is not relevant to economic analysis.

How would it be possible to observe a decrease in both the equilibrium price and quantity in the market at the same time?

A. Demand increases. B. Demand decreases. C. Supply increases. D. Supply decreases.

Suppose a price floor is imposed on eggs above their equilibrium price. The likely result will be:

A. a lower equilibrium price for eggs as the demand curve for eggs shifts to the left. B. a higher equilibrium price for eggs as the supply curve for eggs shifts to the left. C. a decrease in the quantity of eggs purchased by consumers. D. an increase in the quantity of eggs purchased by consumers.

As the price of leather increases:

A. the price of leather shoes will likely decrease. B. the demand for leather shoes will increase. C. the price of leather shoes will likely increase. D. the supply of leather shoes will likely increase

If there were increasing marginal opportunity costs, the production possibility curve would be:

A. flat. B. straight. C. bowed inward. D. bowed outward.

A tax on the supplier of a good is shown graphically as a shift by the supply curve to the right.

True

False

Tariffs and quotas placed upon a good increase the equilibrium price and reduce equilibrium quantity for that good.

True

False

Faculty pay $15 per year for a parking permit, but many complain that they are not able to find a parking place in designated university lots. This suggests that:

A. parking permits are overpriced. B. faculty incomes are too low. C. parking permits are underpriced. D. the university should make parking free.

That a firm, after some point, cannot increase output without increasing inputs per unit of output, is an example of the Principle of Increasing Marginal Opportunity Cost.

True

False

Suppose a recent and widely circulated medical article reports new benefits of exercise. Simultaneously, the price of the parts needed to make exercise bikes falls. What is the likely effect on the supply and demand for exercise bikes sold?

A. Quantity supplied rises and the demand curve shifts to the left. B. Quantity supplied falls and the demand curve shifts to the left. C. The supply curve shifts to the right and quantity demanded falls. D. The supply curve shifts to the right and the demand curve shifts to the right.

An improvement in technology will:

A. imply that the law of increasing costs no longer applies. B. shift the production possibility curve inward. C. shift the production possibility curve outward. D. have no effect on the production possibility curve.

An increase in price and decrease in quantity is most likely caused by ___________ shift in the demand curve and __________ shift in the supply curve (one or both curves could be shifting and assume that the magnitudes of the shifts, if any, are the same).

A. a leftward; no B. a leftward; a rightward C. no; a leftward D. a rightward; no

If we lived in a society where no one was selfish, under the definition of economics given in Chapter 1 which focuses on coordination:

A. the three economic problems would no longer need to be answered. B. the three economic problems would still need to be answered. C. there would be a political economic problem but not an economic problem. D. there would be no problems at all and everybody would live in perfect harmony, and the economy would never experience any problems of any kind ever.

Japan requires that all U.S.-made cars sold in Japan be sold by existing Japanese dealers who are themselves controlled by Japanese car manufacturers (i.e., a nontariff barrier). In retaliation, the U.S. has taxed nearly all Japanese cars imported into the U.S. Therefore, the U.S. has imposed:

A. a tariff on Japanese cars, while Japan has imposed a nontariff barrier on U.S. cars. B. a quota on Japanese cars, and Japan also has imposed a quota on U.S. cars. C. a nontariff barrier on Japanese cars, while Japan has imposed a quota on U.S. cars. D. a nontariff barrier on Japanese cars, and Japan has also imposed a nontariff barrier on U.S. cars.

When a country imposes a quota:

A. the domestic price of the imported good rises while domestic consumption remains unchanged. B. domestic consumption of the imported good falls while the domestic price of the imported good remains unchanged. C. domestic consumption of the imported good rises while the domestic price of the imported good rises. D. domestic consumption of the imported good falls and the domestic price of the imported good rises.

In the 1980's, the price of VCR's fell dramatically. One would expect that the number of VCR's that people bought:

A. increased. B. decreased. C. remained exactly the same. D. could not be observed.

One reason economists distinguish between micro and macro is:

A. the fallacy of composition does not hold. B. supply and demand can become interdependent when the market becomes larger and the analysis wider in scope. C. economists do not believe in materiality. D. economists feel very strongly that micro and macro are completely separate from each other and are totally unrelated.

Movements along a demand curve mean that price is changing for the particular good we happen to be examining.

True

False

Caviar prices doubled from 1994 to 1996, while sales of caviar rose 20%. This example definitely refutes the Law of Demand.

True

False

In the Goods Market:

A. households supply factors of production to business and are paid by business for doing so. B. households supply factors of production to business and are paid by government for doing so. C. business produces goods and services and sells them to households and government. D. government produces goods and services and supplies them to households and business.

Allocating courses at a college usually is not done by the use of markets. It follows that allocating courses:

A. is not an economic problem. B. is nonetheless an economic problem. C. is a political economic problem but not an economic problem. D. is totally unrelated to allocation problems at all, as colleges can offer an infinite amount of courses since they have unlimited resources.

Public goods tend not to be sold in the marketplace because:

A. they are, by nature, so inexpensive that everyone would be able to afford to buy them if offered in the marketplace. B. the benefits would be denied to nonbuyers if sold this way. C. the additional (i.e., marginal) cost of an additional user is zero. D. there would be no demand for them because they do not yield any benefits.

Over the last 50 years, the world today can be best characterized by ____________free trade and ___________ number of free trade associations.

A. increased; increased B. reduced; increased C. reduced; reduced D. increased; reduced

The opposing dynamic forces being considered in a partial equilibrium model cancel each other out when the market:

A. is in shortage. B. is in surplus. C. is controlled by the government. D. is in equilibrium.