review chapter 2

CHAPTER 2 - REVIEW

I. Choose ONE correct answer

1. Government imposes tax on producer. This will lead to:
a. a right shift in supply curve
b. a left shift in supply curve
c. a movement in supply curve
d. a movement in demand curve
2. Assume that A’s supply is constant, A and B are substitute goods. The decrease in B’s price will lead to:
a. a rightward shift in A’s demand curve
b. a rightward shift in B’s demand curve
c. a leftward shift in B’s demand curve
d. None
3. The Engel curve describes the relationship between:
a. Price and quantity demanded
b. Income and quantity demanded
c. Price and quantity supplied
d. Taste and quantity demanded
4. Which of the followings can affect on supply of orange?
a. Demand of orange
b. Price of orange
c. Price of mandarin
d. None
5. The increase in A’s inputs cost will cause:
a. Supply curve shifts to the left
b. Supply curve shifts to the right
c. Both supply and demand curves shift to the right
d. None
6. Given a downward-sloping demand curve and an upward-sloping supply curve for a product, an increase in incomes will:
a. increase equilibrium price and quantity if the product is a normal goods
b. decrease equilibrium price and quantity if the product is a normal goods
c. have no effects on equilibrium price and quantity
d. reduce quantity demanded, but not shift the demand curve
7. Supply function excludes which of the following factors?
a. Inputs price
b.Technology
c. Price of related goods and services
d. Expectation
8. The law of demand shows the negative relationship between:
a. Expectation and quantity demanded
b. Price and income
c. Income and quantity demanded
d. Price and quantity demanded
9. The government sets up floor price in order to:
a. Protect producer/supplier
b. Protect consumer/ buyer
c. promote free international trade
d. none
10. The relationship between income and quantity demanded is:
a. Positive