Question

Question 11 (1 point)

When we say that a price is below the "market clearing level",we imply that:

Question 11 options:

quantity demanded exceeds quantity supplied.

the current price is above the equilibrium price.

quantity supplied exceeds quantity demanded.

the price of the good is likely to decrease.

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Question 12 (1 point)

A movement upward along a supply curve in response to a change in a product's own price is a(n):

Question 12 options:

increase in supply

increase in quantity supplied

decrease in supply

decrease in quantity supplied

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Question 13 (1 point)

For a given linear demand curve,a decrease in supply due to an increase in the price of an input will result in:

Question 13 options:

an increase in producer surplus

an increase in consumer surplus

an increase in total surplus

a decrease in both consumer and producer surplus(or total surplus).

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Question 14 (1 point)

Effective price floors such as Agricultural price supports to farmers

Question 14 options:

benefit all consumers of the goods produced/sold

benefit some producers/suppliers of the goods produced/sold.

result in persistent surpluses

both (b) and (c) .

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Question 15 (1 point)

An effective price ceiling imposed on a market will result in:

Question 15 options:

a shortage

excess demand for the product

a surplus

both (a) and (b).

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Question 16 (1 point)

Markets in which firms sell their output of goods and services are called:

Question 16 options:

resource markets.

product markets.

command markets.

mixed markets.

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Question 17 (1 point)

Assume a drought in the Great Plains reduces the supply of wheat. Noting that wheat is a basic ingredient in the production of bread and that potatoes are a consumer substitute for bread, we would expect the price of wheat to:

Question 17 options:

rise; the supply of bread to increase, and the demand for potatoes to increase.

rise; the supply of bread to decrease, and the demand for potatoes to increase.

rise; the supply of bread to decrease, and the demand for potatoes to decrease.

fall; the supply of bread to increase, and the demand for potatoes to increase.

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Question 18 (1 point)

Because of unseasonably cold weather, the supply of oranges has substantially decreased. This statement indicates that:

Question 18 options:

consumers will be willing and able to buy more oranges at each possible price.

the demand for oranges will necessarily rise.

the equilibrium quantity of oranges will rise.

the quantity of oranges available for sale at various prices has declined.

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Question 19 (1 point)

Inefficiency exists whenever the economy's output combination lies inside its production possibilities curve(frontier).

Question 19 options:

True

False

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Question 20 (1 point)

An increase in the labor force will cause out an outward shift in an economy's production possibilities curve(frontier).

Question 20 options:

True

False

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Answer 1

11. quantity demanded exceeds quantity supplied.

When market price is less than equilibrium price then people demand more goods while sellers are willing to supply less units of goods. So, quantity demanded will be greater than quantity supplied.

12. increase in quantity supplied

When supply of a commodity changes due to change in the price of commodity itself then it is known as change in quantity supplied. On the other hand, when supply of commodity changes due to change in factors other than commodity's own price, then it is known as change in supply. Change in supply includes Rightward shift of supply curve and Leftward shift of supply curve. Change in quantity supplied includes Upward movement of supply curve and Downward movement of supply curve.

13. a decrease in both consumer and producer surplus(or total surplus).

Leftward shifts of supply curve decreases consumer and producer surplus in the market because it causes deadweight loss.

14. both (b) and (c)

Price floor is the price which lies above equilibrium market price so producer surplus increases.

15. both (a) and (b).

Price ceiling means price is less than equilibrium market price so demand will be higher than supply causes shortage in the market.

16. product markets.