Question

Question 6.

If the demand for milk is downward sloping, then what is the impact of an increase in the price of milk on demand or supply of milk?

Select one: a. decrease in the quantity of milk demanded.

b. decrease in the supply of milk.

c. increase in the quantity of milk demanded.

d. decrease in the demand for milk.

e. increase in the demand for milk.

Question 7.

If the equilibrium price of wheat is $3 per bushel and then a price floor of $2.50 per bushel is imposed by the government, what is its impact on wheat market?

Select one:

a. There will be a surplus of wheat.

b. There will be a shortage of wheat.

c. There will be no effect on the wheat market.

d. The price of wheat will decrease.

Question 8.

If you observed that the market price of a good rose while the quantity exchanged fell, which of the following could have caused the change?

Select one:

a. A decrease in supply.

b. A decrease in demand.

c. An increase in supply.

d. An increase in demand.

e. None of the above.

Question 9.

Supply is fixed (perfectly inelastic) in which of the following periods?

Select one:

a. Market.

b. Short Run

c. Long run.

d. Histrorical.

Question 10.

Supply is likely to be more elastic in which period?

Select one:

a. Histoorical.

b. Market.

c. Long run.

d. Short run.

Answer 1

6). Following the law of demand, any increase in own price of the good is likely to decrease the quantity demanded, shown by a movement along the original demand curve. Select a. decrease in the quantity of milk demanded

7). Price floor ensures that market price does not fall below the floor price. In this case the price floor is not binding because it is set below the market price. Select c. There will be no effect on the wheat market.

8) It would be a decrease in the supply that would have caused the supply curve to shift to the left, raising price and reducing quantity. Select a. A decrease in supply.

9) d. Histrorical.

10) c. Long run.