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Macro multiple choice

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1. Macroeconomics can best be described as the:
B. study of the large aggregates of the economy or the economy as a whole.

2. A recent study found that an increase in the Federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana. We can conclude that:
A. beer and marijuana are substitute goods.

An increase in the price of a good causes an increase in the demand for its substitute

3. In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by:
D. a change in buyer tastes.

Answers A and B would cause the price of donuts to increase, which would not increase demand. Expecting the price to fall would also tend to make consumers buy fewer in the meantime.

4. In 2003 the price of oil increased, which in turn caused the price of natural gas to rise. This can best be explained by saying that oil and natural gas are:

B. substitute goods and the higher price for oil increased the demand for natural gas.

5. Cameras and film are:

B. complementary goods.

Complementary goods are used together

6. Because of unseasonably cold weather, the supply of oranges has substantially decreased. This statement ...

Solution Summary

Multiple choice questions related to market structure and other macroeconomic concepts