Mcqs
Mcqs
Mcqs
5. All the following will cause the demand curve to shift to the left except:
a reduction in income if the good is normal.
an increase in the price of a complementary good.
an increase in the price of a substitute good.
an increase in income if the good is inferior.
consumer tastes change, so they no longer want the good.
6. At a quantity of 120 units, the highest price consumers are willing to pay is:
£0.20 per unit.
£0.40 per unit.
£0.30 per unit.
£0.5 per unit.
8. What happens if tougher safety legislation makes it more expensive to make chocolate
bars in mechanized factories?
The supply curve shifts left.
The equilibrium price rises.
The supply of chocolate is reduced.
All the above.
16. Suppose the demand function is QD=100-P and the supply function is QS=P. Then, in
equilibrium:
the consumers' surplus is zero.
the producers' surplus is greater than the consumers' surplus.
the consumers' surplus is equal to 50.
the consumers' surplus is equal to the producers' surplus.
18. Consider two goods, x and y, that are substitutes. Let px and py be their prices. Which of
the following demand functions for good x is correct?
QD=a-bpx+cpy
QD=a-bpx-cpy
QD=a+bpx+cpy
QD=a-bpx-cpy
21. Given that bread and toasters are complements, what happens to the demand curve for
toasters if the price of bread rises? Show the new demand curve on the graph.
22. Given the following market demand: Qd = 120 -2p , find the consumer surplus when P =
£20. Also, show the consumer surplus on the graph provided below. What is the
consumer surplus when P = £15?
23. Suppose the demand and supply for the market of per kg wheat is given by the following
equations: (quantities are in thousands)
QD = 30 – 4P
QS = –6 + 8P
a) What is the market equilibrium price of wheat per kg and market equilibrium quantitiy
of wheat per kg. show in a diagram.
c) How would the welfare change due to such a policy? (find the gain/loss in consumer
and producer surplus and the deadweight loss)
d) If the government wishes to increase the market equilibrium price to Rs 3.25, what
would be the new supply curve?