ECON 101-02 Quiz 2

1. If supply and demand both shift to the right, equilibrium quantity...

A) rises, but the equilibrium price may rise, fall, or stay the same.
B) falls, but the equilibrium price may rise, fall, or stay the same.
C) may rise, fall, or stay the same, but equilibrium price will rise.
D) may rise, fall, or stay the same, but equilibrium price will fall.
2. Refer to the graph below. A simultaneous decrease in production costs and consumer income will most likely cause the shifts shown by...



A) Graph A.
B) Graph B.
C) Graph C.
D) Graph D.
3. Refer again to the graph from Problem 2, above. A simultaneous decrease in the number of companies producing the product and popularity of that product will most likely cause the shifts shown by...

A) Graph A.
B) Graph B.
C) Graph C.
D) Graph D.
4. If supply shifts right while demand remains unchanged, equilibrium price...

A) falls, but the equilibrium quantity clearing the market rises.
B) falls, and the equilibrium quantity clearing the market falls, too.
C) rises, and the equilibrium quantity clearing the market rises, too.
D) rises, but equilibrium quantity clearing the market falls.
5. An increase in demand will cause...

A) an increase in supply.
B) a decrease in supply.
C) an increase in quantity supplied.
D) a decrease in quantity supplied.
6. The principle of _______________ states that as you consume more of a good, you enjoy the additional units less than you did the initial units.

A) increasing marginal utility
B) diminishing marginal utility
C) increasing total utility
D) diminishing total utility
7. Refer to the graphs below for the last four questions.
The effect of a decrease in the price good is best shown by which arrow?



A) A
B) B
C) C
D) D
8. The effect of an increase in consumer income is best shown by which arrow?

A) A
B) B
C) C
D) D
9. The effect of a decrease in the price of a close substitute is best shown by which arrow?

A) A
B) B
C) C
D) D
10. The effect of an increase in price of the good is best shown by which arrow?

A) A
B) B
C) C
D) D
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