Southern New Hampshire University - ECO 500

Chapter 2 Practice Questions

1)What type of analysis studies the movement from one equilibrium to another?

2. When demand for a good or service decreases, which of the following occur(s)?
3. In product markets, an effective price floor creates which of the following conditions?
4. The difference between the market price and the amount at which producers are willing and able to sell a good thing is called                                                                                surplus
5. An increase in demand is best characterized by which of the following?
6. The law of demand analyzes the relationship between price and quantity demanded holding which of the following variables constant?
7. Prices of inputs –
8. Taxes and subsidies –
9. A binding price ceiling tends to create what type of condition in the market?
10. The demand function indicates that the quantity of a good consumed demands on
11. What is the effect of price floor on consumers?
12. Which of the following expressions best describes Full Economic Price?
13. As the price of a good decreases
14. If the price of a good or service is less than the equilibrium price, a exists. As a result the price tends to        

15. The following function, Qx = f(Px,Pf,W,H) shows that the quantity produced in a market depends on the price of the good, Px, and
16. A price ceiling is defined as the                   legal price that can be charged in the market
17. Increases in the population or population density tend to                                    demand for goods and services, all things equal
18. Which area forms consumer surplus
19. Which of the following is an example of a price floor?
20. Demand is given by qd = 20-3P supply is given by qs= 2+3P determine equilibrium price and quantity
21. Which of the following describes supply and demand analysis?
22. According to the law of demand, as market price increases, quantity demand       
23. Comparative static analysis assumes which?
24. The difference between what consumers are willing to pay for a good or service and the market price is known as
25. When a demand function is written with price on the left hand side of the “equals sign” and everything else is on the right hand side, it is called
26. Which of the following will cause a decrease in the supply of “farm to fork” vegetables

27. An increase in supply is shown by which of the following events?
28. When a shortage exists, there is a tendency for price to                                  in order to equate to the q demanded and q supplied
29. When supply function such as Qx=15Px-1200 represented with price isolated on the left hand side it is called
30. Which of the following occur(s) when the supply of a good or service increases?
31. What type of analysis studies the movement from one equilibrium to another?
32. An increase in consumer income                         the demand for normal goods and         the demand for inferior goods
33. As the price of a good increases
34. The law of demand analyzes the relationship between price and quantity demanded holding which of the following variables constant?
35. A function that describes the relationship between output and various prices, prices of inputs, and values of other variables is called
36. Determine the effect in the market for chicken if the fed govt subsidizes chicken production and the price of pork, a substitute, decreases