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Chapter 2:
The Basic Theory Using Demand and Supply
Multiple Choice Questions
1. If an individual consumes more of good X when his/her income doubles, we can infer that
a. the individual is highly sensitive to changes in the price of good X.
b. good X is a normal good.
c. good X is an inferior good.
d. the demand for good X is perfectly inelastic.
Answer: B
Difficulty: 02 Medium
Blooms: Understand
AACSB: Reflective Thinking
Topic: Demand and Supply
2. Which of the following factors can lead to an increase in demand for coffee at Starbucks?
a. An increase in household income
b. An increase in the price of sugar
c. An increase in the price of coffee beans
d. A 10 percent decline in local population
Answer: A
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective Thinking
Topic: Demand and Supply
3. If the price of a normal good is measured along the vertical axis and its quantity along the
horizontal axis, an increase in the price of the good will lead to:
a. a downward movement along the demand curve.
b. an upward movement along the demand curve.
c. a rightward shift of the demand curve.
d. a leftward shift of the demand curve.
Answer: B
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective
Topic: Demand and Supply
1
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
4. Everything else remaining unchanged, when the price of a normal good increases,
consumers:
a. purchase more of the good.
b. purchase less of the good.
c. purchase the same amount of the good.
d. do not purchase any amount of the good.
Answer: B
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective Thinking
Topic: Demand and Supply
5. Suppose good X is a substitute of good Y. Everything else remaining unchanged, an increase
in price of good Y will lead to:
a. an increase in demand for good Y.
b. a decrease in demand for good X.
c. an increase in demand for good X.
d. a decrease in price of good X.
Answer: C
Difficulty: 02 Medium
Blooms: Understand
AACSB: Reflective Thinking
Topic: Demand and Supply
6. Which of the following events would lead to a decrease in demand for air travel?
a. A decrease in the number of people who are afraid to fly
b. A decrease in oil prices
c. A decrease in rail fares
d. An increase in income levels
Answer: C
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective Thinking
Topic: Demand and Supply
7. Harry used work in a launderette and earned $30 a day. After work, he normally had a
chicken burger worth $5 at McDonalds. However, his pay was lowered to $20 some days
later. Then after work he used to have a vegetable burger worth $3. Here the vegetable burger
is an example of a(n):
a. inferior good.
b. normal good.
c. complement good.
d. luxury good.
2
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Answer: A
Difficulty: 03 Hard
Blooms: Analyze
AACSB: Analytic
Topic: Demand and Supply
8. The value of price elasticity of demand for a normal commodity is negative because it
indicates:
a. the inverse relationship between the price and the quantity demanded for the commodity.
b. that the value of the consumer surplus is negative for a normal good.
c. that the changes in quantity demanded are much less compared to the changes in price for
a normal good.
d. the direct relationship between price and consumer surplus from the commodity.
Answer: A
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective Thinking
Topic: Demand and Supply
9. Which of the following will cause a rightward shift of the market supply curve?
a. An increase in the product price
b. A decrease in input prices
c. Change in consumers’ tastes
d. An increase in national income
Answer: B
Difficulty: 02 Medium
Blooms: Understand
AACSB: Reflective Thinking
Topic: Demand and Supply
10. Which of the following is a “unit-free” measure?
a. Consumer surplus when the demand curve is horizontal
b. Producer surplus when the supply curve is vertical
c. Market supply
d. Price elasticity of demand
Answer: D
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective Thinking
Topic: Demand and Supply
3
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
11. If a 1% increase in the price of DVD players leads to a 3% reduction in its sales, we can
conclude that:
a. the supply of DVD players is perfectly inelastic.
b. DVD players are inferior goods.
c. the demand for DVD players is relatively elastic.
d. the demand for DVD’s is relatively inelastic.
Answer: C
Difficulty: 02 Medium
Blooms: Understand
AACSB: Reflective Thinking
Topic: Demand and Supply
12. Which of the following is true of consumer surplus?
a. It is graphically represented as the area under the equilibrium price and above the supply
curve of a good.
b. It is the net gain in economic well-being associated with producing and selling the
equilibrium quantity of a good.
c. It is used to measure the impact of a change in price on the economic well-being of the
producers.
d. It is the difference between the value that one places on a good and the price paid for the
good.
Answer: D
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective Thinking
Topic: Demand and Supply
4
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
13. Refer to Figure 2.1 below. At a price of $70, the consumer surplus equals:
Price ($/unit)
150
Supply
120
70
40
Demand
10
0
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Chapter 2:
The Basic Theory Using Demand and Supply
Multiple Choice Questions
1. If an individual consumes more of good X when his/her income doubles, we can infer that
a. the individual is highly sensitive to changes in the price of good X.
b. good X is a normal good.
c. good X is an inferior good.
d. the demand for good X is perfectly inelastic.
Answer: B
Difficulty: 02 Medium
Blooms: Understand
AACSB: Reflective Thinking
Topic: Demand and Supply
2. Which of the following factors can lead to an increase in demand for coffee at Starbucks?
a. An increase in household income
b. An increase in the price of sugar
c. An increase in the price of coffee beans
d. A 10 percent decline in local population
Answer: A
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective Thinking
Topic: Demand and Supply
3. If the price of a normal good is measured along the vertical axis and its quantity along the
horizontal axis, an increase in the price of the good will lead to:
a. a downward movement along the demand curve.
b. an upward movement along the demand curve.
c. a rightward shift of the demand curve.
d. a leftward shift of the demand curve.
Answer: B
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective
Topic: Demand and Supply
1
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
4. Everything else remaining unchanged, when the price of a normal good increases,
consumers:
a. purchase more of the good.
b. purchase less of the good.
c. purchase the same amount of the good.
d. do not purchase any amount of the good.
Answer: B
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective Thinking
Topic: Demand and Supply
5. Suppose good X is a substitute of good Y. Everything else remaining unchanged, an increase
in price of good Y will lead to:
a. an increase in demand for good Y.
b. a decrease in demand for good X.
c. an increase in demand for good X.
d. a decrease in price of good X.
Answer: C
Difficulty: 02 Medium
Blooms: Understand
AACSB: Reflective Thinking
Topic: Demand and Supply
6. Which of the following events would lead to a decrease in demand for air travel?
a. A decrease in the number of people who are afraid to fly
b. A decrease in oil prices
c. A decrease in rail fares
d. An increase in income levels
Answer: C
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective Thinking
Topic: Demand and Supply
7. Harry used work in a launderette and earned $30 a day. After work, he normally had a
chicken burger worth $5 at McDonalds. However, his pay was lowered to $20 some days
later. Then after work he used to have a vegetable burger worth $3. Here the vegetable burger
is an example of a(n):
a. inferior good.
b. normal good.
c. complement good.
d. luxury good.
2
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Answer: A
Difficulty: 03 Hard
Blooms: Analyze
AACSB: Analytic
Topic: Demand and Supply
8. The value of price elasticity of demand for a normal commodity is negative because it
indicates:
a. the inverse relationship between the price and the quantity demanded for the commodity.
b. that the value of the consumer surplus is negative for a normal good.
c. that the changes in quantity demanded are much less compared to the changes in price for
a normal good.
d. the direct relationship between price and consumer surplus from the commodity.
Answer: A
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective Thinking
Topic: Demand and Supply
9. Which of the following will cause a rightward shift of the market supply curve?
a. An increase in the product price
b. A decrease in input prices
c. Change in consumers’ tastes
d. An increase in national income
Answer: B
Difficulty: 02 Medium
Blooms: Understand
AACSB: Reflective Thinking
Topic: Demand and Supply
10. Which of the following is a “unit-free” measure?
a. Consumer surplus when the demand curve is horizontal
b. Producer surplus when the supply curve is vertical
c. Market supply
d. Price elasticity of demand
Answer: D
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective Thinking
Topic: Demand and Supply
3
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
11. If a 1% increase in the price of DVD players leads to a 3% reduction in its sales, we can
conclude that:
a. the supply of DVD players is perfectly inelastic.
b. DVD players are inferior goods.
c. the demand for DVD players is relatively elastic.
d. the demand for DVD’s is relatively inelastic.
Answer: C
Difficulty: 02 Medium
Blooms: Understand
AACSB: Reflective Thinking
Topic: Demand and Supply
12. Which of the following is true of consumer surplus?
a. It is graphically represented as the area under the equilibrium price and above the supply
curve of a good.
b. It is the net gain in economic well-being associated with producing and selling the
equilibrium quantity of a good.
c. It is used to measure the impact of a change in price on the economic well-being of the
producers.
d. It is the difference between the value that one places on a good and the price paid for the
good.
Answer: D
Difficulty: 01 Easy
Blooms: Remember
AACSB: Reflective Thinking
Topic: Demand and Supply
4
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
13. Refer to Figure 2.1 below. At a price of $70, the consumer surplus equals:
Price ($/unit)
150
Supply
120
70
40
Demand
10
0
Do Drive thay đổi chính sách, nên một số link cũ yêu cầu duyệt download. các bạn chỉ cần làm theo hướng dẫn.
Password giải nén nếu cần: ket-noi.com | Bấm trực tiếp vào Link để tải:
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