PLEASE eXPLAIN WHY YOU CHOSE THAT ANSWER. 1. Which of the following determines t
ID: 1221017 • Letter: P
Question
PLEASE eXPLAIN WHY YOU CHOSE THAT ANSWER.
1. Which of the following determines the quantity demanded of a commodity?
a. the # of buyers
b. the income levels of consumers
c. the price of the commodity
d. consumers expectations
e. the prices of related commodities
2. The downward slope of the demand curve is attributed to:
a. the inverse relationship between income and quantity demanded
b. the inverse relationship between price and quantity demanded.
c. the direct relationship between price and quantity demanded.
d. the direct relationship between consumer preferences and quantity demanded
e.the direct relationship between income and quantity demanded
A new ice cream flavor is introduced at the store.
The onset of summer brings about an increase in the temperature.
The store introduces a limited period offer of 20 percent off on the price of ice cream.
The income of the store’s consumers increases.
The price of frozen yogurt that is sold at the store is reduced by 5 percent.
4. The output level that occurs in any market that is in equilibrium:
is an output level where buyers will not pay as much as suppliers require.
is the quantity where the demand and supply curves intersect each other.
is the quantity at an output level where buyers will pay more than suppliers require.
is the quantity where the supply curve intersects the y-axis.
is the quantity where the demand curve intersects the x-axis.
independent goods.
substitute goods.
inferior goods.
complementary goods.
Giffen goods.
The income levels of consumers
The preferences of consumers
The price expectations of producers
The cost of inputs used in production
The price of the product
7. A rightward shift of a market supply curve might be caused by:
an increase in the wages of labor employed in the industry.
an increase in the supply of a substitute good.
the entry of new firms in the industry.
a decrease in the income of consumers.
an increase in the price of the final product.
.
8. When will a shortage occur in a market?
When the quantity available at zero price is insufficient to meet demand
When quantity supplied is greater than the equilibrium quantity
When a price floor is set in the market
When the quantity that consumers are willing and able to purchase decreases
When the actual price is lower than the equilibrium price
9. In a market where the price is restricted by price floors or price ceilings,
disequilibrium will automatically correct itself.
all sellers will be able to sell everything they produce.
all buyers will get what they want.
surpluses and shortages will exist.
surpluses and shortages will put pressure on the price to move to its equilibrium.
3. Which of the following will cause an increase in the quantity demanded of ice cream at an ice cream store? a.A new ice cream flavor is introduced at the store.
b.The onset of summer brings about an increase in the temperature.
c.The store introduces a limited period offer of 20 percent off on the price of ice cream.
d.The income of the store’s consumers increases.
e.The price of frozen yogurt that is sold at the store is reduced by 5 percent.
Explanation / Answer
1) Price of a commodity determines the quantity demanded (Law of demand).
2) b. the inverse relationship between price and quantity demanded. (law of demand)
3) The store introduces a limited period offer of 20 percent off on the price of ice cream. As price of a commodity determines its quantity demanded. (law of demand)
4)is the quantity where the demand and supply curves intersect each other. At equilibrium QD=QS. Hence where two curves intersects is the point of equilibrium where the consumers pay what the producers want.
5) substitute goods. Butter can be use as a substitute of magarine. like tea and coffee.
6) The price of the product determines its quantity supplies. There is a direct relation between price and quantity supply (law of supply).
7) the entry of new firms in the industry. Rightward shift of the supply curve indicates increase in the supply. This is due to entry of new firms or lower input cost or some government subsidy to producers.
8) when the actual price is lower than equilibrium price.
9) d
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