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Bnad 301 exam 1 questions with correct answers 2024/2025
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Bnad 301 exam 1 questions with correct answers 2024/2025
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Bnad 301 exam 1Which of the following can be true in a competitive market (mark all that apply)? - ANSThe
market has more sellers than buyers.
The Law of Demand says that if the market price rises then (mark all that apply): - ANSThe
quantity demanded decreases.
Which statement is an example of positive ("scientific") economics? - ANSCutting the tax on
capital gains will increase stock prices.
Which statement is an example of normative economics? - ANSThe federal budget should be
balanced.
Astrology is not a science, according to current ideas, because: - ANSAstrologers make no
systematic attempt to test its predictions.
Which kind of economic behavior is hardest to explain, using economists' fundamental
assumptions about behavior? - ANSGiving to charity.
Many economists believe that ______ sometimes provide an exception to the Law of Demand. -
ANSstatus goods
Suppose that the market supply curve can be described by the equation QS=(p/4)-3 and market
demand can be described by the equation QD=42-p, where p is the market price. Then, in
equilibrium, the quantity traded in this market is closest to: - ANS5 (correct answer is 6)
Suppose that the market price of oil is $60 per barrel, the quantity demanded is 50, and the
quantity supplied is 80. This tells you that the equilibrium price ____________ and the
equilibrium quantity ____________. (Mark two answers.) - ANSIs between 50 and 80. Less than
60
If there is excess demand in a market, then which things do we normally expect to happen, to
bring the market into equilibrium? (Check all that apply.) - ANSMarket price will rise.
The main ingredient for making paper is wood pulp. For the next two questions, suppose that
the price of wood pulp rises. What happens to the demand curve for paper? - ANSThere is no
clear shift.
The main ingredient for making paper is wood pulp. For the next two questions, suppose that
the price of wood pulp rises. What happens to the supply curve for paper? - ANSshifts left
, If more students who need apartments move into Tucson, then in the market for apartments the
equilibrium rent _____ and the equilibrium number of apartments rented _____ - ANSRises;
rises.
If a hurricane wipes out much of the orange crop, then we expect the price of oranges to
______ and the quantity traded to ______. - ANSRise; fall.
Suppose that widgets and gadgets are substitutes. Which situations are likely to cause the
demand curve for widgets to shift to the right (check all that apply)? - ANSPrice of gadgets rises.
Suppose that widgets and gadgets are complements. Which situations are likely to cause the
demand curve for widgets to shift to the right (check all that apply)? - ANSPrice of gadgets falls.
If production engineers discover a new procedure that reduces the labor required to produce
oatmeal without increasing any other inputs, then the equilibrium price of oatmeal _____ and
the equilibrium quantity of oatmeal _____. - ANSFalls; rises.
Assume that cars and horses are substitutes. If the price of cars falls then, in the market for
horses, the price ______ and the quantity traded ______. - ANSFalls; falls.
Assume that horticulturists discover a new variety of roses that produces more roses per bush,
with minimal change in the cost of maintaining each bush. What impact do you expect this to
have in the market for roses? - ANSSupply curve for roses shifts to the right.
How do you expect these events in the market for roses to affect the market for tulips, a
substitute? - ANSDemand curve for tulips shifts to the left.
Suppose that the economy shrinks and consumers' incomes generally fall. Then, for most
goods, we expect prices to ______ and the quantities traded to ______. - ANSFall; fall.
In the fall, the demand for electricity usually decreases because people stop using air
conditioning. Then, in the oil market, we expect price to ______ and the quantity traded to
______. (Background information: many electric power generators burn oil.) - ANSFall; fall.
Suppose that the price of transporting gasoline falls. Then, in the gasoline market, the price
______ and the quantity traded ______. - ANSFalls; rises.
Suppose that the price of transporting gasoline rises. Then, in the retail gasoline market, the
price ______ and the quantity traded ______. - ANSRises; falls.
assume that aluminum and steel are substitutes in some applications. Suppose that the price of
steel rises. The equilibrium price of aluminum _____ and the equilibrium quantity of aluminum
_____. - ANSRises; rises.
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