PPSC Economics Topic 6 Economics Models

Question # 1

Suppose the demand curve for a good shifts rightward, causing the equilibrium price to increase this increase in the price of the good results in.

A rightward shift of the supply curve A
An increase in quantity supplied B
A leftward shift of the supply curve C
A leftward movement along the supply curve D

Question # 2

The expression increase in quantity supplied is illustrated graphically as a.

Leftward shift in the supply curve A
Rightward shift in the supply curve B
Movement up long the supply curve C
Movement down along the supply curve D

Question # 3

If the price of orange juice rises 10% and as a result the quantity demanded falls by 8% the price elastic of demand for orange juice is.

-1.25 A
Inelastic B
Both a and b C
Neither A nor B above D

Question # 4

In the labor market if the government imposes a minimum wage that is below the equilibrium wage then.

Workers who wish to work at the minimum wage will have a difficult time finding jobs. A
Firms will hire fewer workers than without the minimum wage law. B
Some workers may lose their jobs as a result C
Nothing will happen to the wage rate or employment D

Question # 5

To determine the total demand for all consumers sum the quantity each consumer demands.

At a given price A
At all prices and then sum this amount across all consumers B
Both a and b will generate the same total demand C
None of the above D

Question # 6

If the price of automobiles were to increase substantially the demand curve for gasoline would most likely

Shift leftward A
Shift right ward B
Become flatter C
Become steeper D

Question # 7

If the price of automobiles were to decrease substantially the demand curve for public transpiration would most likely.

shift rightward A
Shift leftward B
Remain unchanged C
Remain unchanged while quantity demanded would change D

Question # 8

If government regulations prohibit the production of a particular good the demand curve for that good will most likely.

Shift leftward A
Shift rightward B
Remain unchanged C
Disappear D

Question # 9

A Horizontal demand curve for a good could arise because consumers.

Are irrational A
Are not sensitive to price changes B
View this good as identical to another good C
Have no equivalent substitutes for this good D

Question # 10

If the price of automobile were to decrease substantially the demand curve for automobiles would most likely.

shift rightward A
Shift left eard B
Remain unchanged C
Become steeper D

Question # 11

Holding all other factors constant consumers demand more of a good the

Higher its price A
Lower its price B
Steeper the downward slope of the demand curve C
Steeper the upward slope of the demand curve D

Question # 12

An increases in the demand curve for orange juice would be illustrated as a.

Leftward shift of the demand curve A
Right ward shift of the demand curve B
Movement up along the demand curve C
Movement down along the demand curve D

Question # 13

A vertical demand curve results in.

No change in quantity when the supply curve shifts. A
No change in price when the supply curve shifts B
No change in the supply curve being possible C
No change in quantity when the demand curve shifts. D

Question # 14

Consumers and firms are known as price takers only it

No market exists to determine the equilibrium price A
they can set the market price B
They cannot effect the market price C
Excess demand exists D

Question # 15

A specific tax on sellers will

shift the demand curve to the right A
Shift the demand curve the left B
Shift the supply curve to the right C
Shift the supply curve to the left D

Question # 16

If a government imposed price celling causes the observed price in a market to be below the equilibrium price.

There will be excess demand A
There will be excess supply B
The curves will shift to make a new equilibrium at the regulated price C
None of the above D

Question # 17

Most Microeconomic models assume that decision makers wish to.

Make themselves as well off as possible A
Act selfishly B
Not cooperate with others C
None of the above D

Question # 18

Economists tend to judge a model based upon

the realty of its assumptions A
The accuracy of its predications B
Its simplicity C
Its complexity D

Question # 19

As the price of a good increases, the change in the quantity demanded can be shown by

Shifting the demand curve leftward A
Shifting the demand curve rightward B
Moving down along the same demand curve C
Moving up long the same demand curve D

Question # 20

A vertical demand curve for a particular good implies that consumers are.

Sensitive to changes in the price of that good A
Not sensitive to changes in the price of that good. B
Irrational C
Not interested in that good D

Sr.#	Question	Answer
1	A vertical demand curve for a particular good implies that consumers are.	A. Sensitive to changes in the price of that good B. Not sensitive to changes in the price of that good. C. Irrational D. Not interested in that good
2	If government regulations prohibit the production of a particular good the demand curve for that good will most likely.	A. Shift leftward B. Shift rightward C. Remain unchanged D. Disappear
3	An increases in the demand curve for orange juice would be illustrated as a.	A. Leftward shift of the demand curve B. Right ward shift of the demand curve C. Movement up along the demand curve D. Movement down along the demand curve
4	In the labor market if the government imposes a minimum wage that is below the equilibrium wage then.	A. Workers who wish to work at the minimum wage will have a difficult time finding jobs. B. Firms will hire fewer workers than without the minimum wage law. C. Some workers may lose their jobs as a result D. Nothing will happen to the wage rate or employment
5	A vertical demand curve results in.	A. No change in quantity when the supply curve shifts. B. No change in price when the supply curve shifts C. No change in the supply curve being possible D. No change in quantity when the demand curve shifts.
6	Most Microeconomic models assume that decision makers wish to.	A. Make themselves as well off as possible B. Act selfishly C. Not cooperate with others D. None of the above
7	To determine the total demand for all consumers sum the quantity each consumer demands.	A. At a given price B. At all prices and then sum this amount across all consumers C. Both a and b will generate the same total demand D. None of the above
8	The expression increase in quantity supplied is illustrated graphically as a.	A. Leftward shift in the supply curve B. Rightward shift in the supply curve C. Movement up long the supply curve D. Movement down along the supply curve
9	If the demand curve for a good is horizontal and the price is positive then a leftward shift of the supply curve results in.	A. a price of zero B. An increase in price C. A decrease in price D. No change in price
10	Consumers and firms are known as price takers only it	A. No market exists to determine the equilibrium price B. they can set the market price C. They cannot effect the market price D. Excess demand exists

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