Economics Practice Question

In: Business and Management

Submitted By aaronlemos94
Words 5006
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1. Which of the following is NOT an application of supply and demand analysis?

a. Understanding changing world economic conditions and their effects on prices. b. Evaluating the effects of government price controls on the agricultural industry. c. Determining how taxes affect consumers’ spending patterns. d. all of the above. e. none of the above.

2. A supply curve reveals

a. the quantity of output consumers are willing to purchase at each possible market price. b. the difference between quantity demanded and quantity supplied at each price. c. the maximum level of output an industry can produce, regardless of price. d. the quantity of output that producers are willing to produce and sell at each possible market price.

3. Plastic and steel are substitutes in the production of body panels for certain automobiles. If the price of plastic increases, with other things remaining the same, we would expect

a. the price of steel to fall. b. the demand curve for steel to shift to the right. c. the demand curve for plastic to shift to the left. d. nothing to happen to steel because it is only a substitute for plastic. e. the demand curve for steel to shift to the left.

4. Which of the following would shift the demand curve for new textbooks to the right?

a. A fall in the price of paper used in publishing texts. b. A fall in the price of equivalent used text books. c. An increase in the number of students attending college. d. A fall in the price of new text books.

5. When an industry's raw material costs increase, other things remaining the same,

a. the supply curve shifts to the left. b. the supply…...

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