ECON 2105 Review 1 Mr. Ryan
1. Name two factors that would increase the equilibrium price of a good.
a) increase in supply or increase in demand
b) increase in supply or decrease in demand
c) decrease in supply or increase in demand
d) decrease in supply or decrease in demand
2. Consider the market for sweaters indicated below. Which of the following events could
cause a shift from Dz to Dx?
P sweaters
D
z Dx
Q
a) an increase in the price of jackets
b) an increase in the cost of wool used to make the sweaters
c) an improvement in the technology used to make the sweaters
d) an unexpectedly mild or warm winter
e) none of the above
3. France Germany
Wine
Beer Wine Beer
0 12 0 16
2 9 3 12
4 6 6 8
6 3 9 4
8 0 12 0
Assuming the information above represents the productive possibilities for France and
Germany, which of the following is true?
a) France has an absolute advantage in wine and a comparative advantage in beer
b) Germany has an absolute advantage in wine and a comparative advantage in beer
c) Germany has an absolute advantage and a comparative advantage in wine
d) France has an absolute advantage and a comparative advantage in wine
4. Which of the following would decrease the demand for Fords?
a) a decrease in the expected future price of Ford automobiles
b) an increase in the price of Chevrolet automobiles
c) an increase in the wages paid to all auto workers
d) an increase in the price of all Ford automobiles
e) none of the above
