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Q:
Figure 3-4 Refer to Figure 3-4. At a price of $10, how many units will be sold?
A) 200
B) 400
C) 600
D) 800
Q:
Figure 3-4 Refer to Figure 3-4. If the price is $10,
A) there would be a surplus of 600 units.
B) there would be a shortage of 600 units.
C) there would be a surplus of 200 units.
D) there would be a shortage of 200 units.
Q:
In 2004, hurricanes damaged a large portion of Florida's orange crop. As a result of this, many orange growers were not able to supply fruit to the market. At the pre-hurricane equilibrium price (i.e., at the initial equilibrium price), we would expect to see
A) a surplus of oranges.
B) the quantity demanded equal to the quantity supplied.
C) a shortage of oranges.
D) an increase in the demand for oranges.
Q:
Figure 3-3 Refer to Figure 3-3. The figure above shows the supply and demand curves for two markets: the market for original Picasso paintings and the market for designer jeans. Which graph most likely represents which market?
A) Graph B represents the market for original Picasso paintings and Graph A represents the market for designer jeans.
B) Graph A represents the market for original Picasso paintings and Graph B represents the market for designer jeans.
C) Graph A represents both the market for original Picasso paintings and designer jeans.
D) Graph B represents both the market for original Picasso paintings and designer jeans.
Q:
At a product's equilibrium price
A) the product's demand curve is the same as the product's supply curve.
B) the quantity of the product demanded is greater than the quantity of the product supplied.
C) the quantity of the product demanded is less than the quantity of the product supplied.
D) the product's demand curve crosses the product's supply curve.
Q:
Which of the following is the correct way to describe equilibrium in a market?
A) At equilibrium, demand equals supply.
B) At equilibrium, quantity demanded equals quantity supplied.
C) At equilibrium, market forces no longer apply.
D) At equilibrium, scarcity is eliminated.
Q:
Use the following supply schedule for cherries to draw a graph of the supply curve. Be sure to label the supply curve and each axis, and show each point on the supply curve.Price (dollars per bushel)Quantity (thousands of bushels)42585012751610020125
Q:
Indicate whether each of the following situations would shift the supply curve to the left, to the right, or not at all.
a. An increase in the number of firms in the market
b. An increase in the current price of the product
c. A decrease in productivity
d. An increase in the expected future price of a product
e. A decrease in the price of an input
Q:
From a supply perspective, what impact would an increase in the price of motorcycles have on the market for motorcycles?
Q:
What is the law of supply? What does this law imply about the shape of the supply curve?
Q:
What is the difference between a supply schedule and a supply curve?
Q:
Explain the differences between a change in supply and a change in quantity supplied.
Q:
All else equal, as the price of a product falls, the quantity supplied increases.
Q:
An increase in the price of inputs will cause the supply curve for a product to shift to the right.
Q:
An decrease in quantity supplied is represented by a leftward shift of the supply curve.
Q:
A positive technological change will cause the supply of a good to increase.
Q:
Quantity supplied refers to the amount of a good or service that a firm is willing and able to supply at a given price.
Q:
An increase in the quantity of a product supplied is caused by an increase in the price of the product.
Q:
A change in supply is represented by a shift of the supply curve.
Q:
An increase in the number of firms in a market will cause the quantity of a good supplied to increase.
Q:
An increase in the price of pineapples will result in
A) a smaller quantity of pineapples supplied.
B) a larger quantity of pineapples supplied.
C) a decrease in the demand for pineapples.
D) an increase in the supply of pineapples.
Q:
If the United States placed an embargo on Swedish products, what would happen in the U.S. market for Swedish furniture?
A) The supply curve would shift to the left.
B) The supply curve would shift to the right.
C) The demand curve would shift to the right.
D) The demand curve would shift to the left.
Q:
In February, market analysts predict that the price of titanium will rise in March. What happens in the titanium market in February, holding everything else constant?
A) The supply curve shifts to the right.
B) The supply curve shifts to the left.
C) The quantity demanded and the quantity supplied of titanium increase.
D) The demand curve shifts to the left.
Q:
Which of the following would cause an increase in the supply of peanut butter?
A) a decrease in the price of grape jelly (assuming that peanut butter and grape jelly are complements)
B) an increase in the price of peanut butter
C) an increase the price of a product that producers sell instead of peanut butter
D) an increase in the number of firms that produce peanut butter
Q:
An increase in the price of off-road vehicles will result in
A) a smaller quantity of off-road vehicles supplied.
B) a larger quantity of off-road vehicles supplied.
C) an increase in the demand for off-road vehicles.
D) a decrease in the supply of off-road vehicles.
Q:
A decrease in the price of GPS systems will result in
A) a smaller quantity of GPS systems supplied.
B) a larger quantity of GPS systems supplied.
C) a decrease in the demand for GPS systems.
D) an increase in the supply of GPS systems.
Q:
The supply curve for watches
A) shows the supply of watches consumers are willing and able to buy at any given price.
B) is downward sloping.
C) shows the relationship between the quantity of watches firms are willing and able to supply and the quantity of watches consumers are willing and able to purchase.
D) shows the relationship between the price of watches and the quantity of watches supplied.
Q:
If a firm expects that the price of its product will be higher in the future than it is today
A) the firm will go out of business.
B) the firm has an incentive to increase supply now and decrease supply in the future.
C) the firm has an incentive to decrease quantity supplied now and increase quantity supplied in the future.
D) the firm has an incentive to decrease supply now and increase supply in the future.
Q:
If a firm has an incentive to increase supply now and decrease supply in the future, the firm expects that the
A) price of its product will be lower in the future than it is today.
B) price of its product will be higher in the future than it is today.
C) price of inputs will be lower in the future than they are today.
D) demand for the product will be lower in the future than it is today.
Q:
Which of the following would shift the supply curve for MP3 players to the left?
A) an increase in the price of an input used to produce MP3 players
B) a decrease in consumer tastes for MP3 players
C) an increase in the number of firms that produce MP3 players
D) an increase in the productivity of the workers who produce MP3 players
Q:
Which of the following would shift the supply curve for MP3 players to the right?
A) an increase in the price of a substitute in production
B) an increase in consumer income (assuming that all MP3 players are normal goods)
C) a decrease in the number of firms that produce MP3 players
D) a decrease in the price of an input used to produce MP3 players
Q:
Vineyards can grow either red wine grapes or white wine grapes on their land. Which of the following would cause the supply of red wine grapes to decrease?
A) an increase in the price of white wine grapes
B) a decrease in the price of white wine grapes
C) an increase in the demand for red wine grapes
D) an increase in the price of red wine
Q:
Ranchers can raise either cattle or sheep on their land. Which of the following would cause the supply of sheep to increase?
A) an increase in the price of sheep
B) a decrease in the price of cattle
C) an increase in the demand for cattle
D) an increase in the price of sheep feed
Q:
The popularity of digital cameras has enticed large discount stores like Wal-Mart and Costco to offer digital photo printing services. How does this affect the digital photo printing market?
A) The demand curve for digital photo printing services shifts to the right.
B) The demand curve for digital photo printing services shifts to the left.
C) The supply curve for digital photo printing services shifts to the right.
D) The supply curve for digital photo printing services shifts to the left.
Q:
Harvey Rabbitt pays for monthly cable TV service. Last week the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area. How is the market for cable TV services affected by this?
A) There is an increase in the supply of cable TV service.
B) There is a decrease in the demand for cable TV service.
C) There is a decrease in the quantity of cable TV service supplied.
D) There is a decrease in the supply of cable TV service.
Q:
Danielle Ocean pays for monthly pool maintenance for her home swimming pool. Last week the owner of the pool service informed Danielle that he will have to raise his monthly service fee because of increases in the price of pool chemicals. How is the market for pool maintenance services affected by this?
A) There is an increase in the supply of pool maintenance services.
B) There is a decrease in the demand for pool maintenance services.
C) There is a decrease in the quantity of pool maintenance services supplied.
D) There is a decrease in the supply of pool maintenance services.
Q:
In October 2005, the U.S. Fish and Wildlife Service banned the importation of beluga caviar, the most prized of caviars, from the Caspian Sea. What happened in the market for caviar in the U.S.?
A) The supply curve shifted to the left.
B) The supply curve shifted to the right.
C) The demand curve shifted to the right.
D) The demand curve shifted to the left.
Q:
Figure 3-2 Refer to Figure 3-2. A decrease in the expected future price of the product would be represented by a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
Q:
Figure 3-2 Refer to Figure 3-2. A decrease in productivity would be represented by a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
Q:
Figure 3-2 Refer to Figure 3-2. A decrease in the price of the product would be represented by a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
Q:
Figure 3-2 Refer to Figure 3-2. An increase in the price of substitutes in production would be represented by a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
Q:
Figure 3-2 Refer to Figure 3-2. An increase in the number of firms in the market would be represented by a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
Q:
Figure 3-2 Refer to Figure 3-2. An increase in price of inputs would be represented by a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
Q:
In October, market analysts predict that the price of platinum will fall in November. What happens in the platinum market in October, holding everything else constant?
A) The supply curve shifts to the right.
B) The supply curve shifts to the left.
C) The quantity demanded and the quantity supplied of platinum increase.
D) The demand curve shifts to the right.
Q:
Which of the following would cause a decrease in the supply of milk?
A) an increase in the price of cookies (assuming that milk and cookies are complements)
B) a decrease in the price of milk
C) an increase the price of a product that producers sell instead of milk
D) an increase in the number of firms that produce milk
Q:
One would speak of a change in the quantity of a good supplied, rather than a change in supply, if
A) supplier expectations about future prices change.
B) the price of the good changes.
C) the cost of producing the good changes.
D) prices of substitutes in production change.
Q:
What is the difference between an "increase in supply" and an "increase in quantity supplied"?
A) There is no difference between the two terms; they both refer to a shift of the supply curve.
B) There is no difference between the two terms; they both refer to a movement along a given supply curve.
C) An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" means at any given price supply has increased.
D) An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" refers to a movement along a given supply curve in response to an increase in price.
Q:
Last year, the Pottery Palace supplied 8,000 ceramic pots at $40 each. This year, the company supplied the same quantity of ceramic pots at $55 each. Based on this evidence, The Pottery Palace has experienced
A) a decrease in supply.
B) an increase in supply.
C) an increase in the quantity supplied.
D) a decrease in the quantity supplied.
Q:
If, in the market for oranges, the supply has increased then
A) the supply curve for oranges has shifted to the right.
B) the supply curve for oranges has shifted to the left.
C) there has been a movement upwards along the supply curve for oranges.
D) there has been a movement downwards along the supply curve for oranges.
Q:
If in the market for peaches, the supply curve has shifted to the left
A) the supply of peaches has increased.
B) the supply of peaches has decreased.
C) the quantity of peaches supplied has increased.
D) the quantity of peaches supplied has decreased.
Q:
A supply schedule
A) is a table that shows the relationship between the price of a product and the quantity of the product supplied.
B) is a curve that shows the relationship between the price of a product and the quantity of the product supplied.
C) is the relationship between the supply of a good and the cost of producing the good.
D) is a table that shows the relationship between the price of a product and the quantity of the product that producers and consumers are willing to exchange.
Q:
Draw a demand curve and label itD1. On the graph, illustrate an increase in demand and a decrease in demand, and label the curves D2 and D3, respectively. Starting on demand curve D1, explain the shift that would result from each of the following events:
a. an increase in income and the good is a normal good
b. an increase in income and the good is an inferior good
c. a decrease in the price of a substitute good
d. a decrease in the price of a complementary good
e. an increase in the taste for the good
f. a decrease in population
g. an increase in the expected future price of the good
Q:
Use the following demand schedule for apples to draw a graph of the demand curve. Be sure to label the demand curve and each axis, and show each point on the demand curve.Price (dollars per bushel)Quantity (thousands of bushels)302025402060158010100
Q:
For each of the following pairs of products state which are complements, which are substitutes, and which are unrelated.
a. Blu-ray discs and video-on-demand
b. Fiat 500 and Mini Cooper S
c. Toothpaste and toothbrush
d. Popcorn and snowboards
e. Razors and razor blades
Q:
What are the five variables that will shift the demand curve?
Q:
For each of the following pairs of products state which are complements, which are substitutes, and which are unrelated.
a. Digital camera and memory stick
b. 7Up and Mountain Dew
c. Swimsuits and flip-flops
d. Tylenol and cat food
e. Photocopier and paper
Q:
Explain the difference between a normal good and an inferior good.
Q:
What are the two effects that explain the Law of Demand? Briefly explain each effect.
Q:
What is the ceteris paribus condition?
Q:
If consumers believe the price of LCD televisions will decrease in the future, this will cause the demand for LCD televisions to increase now.
Q:
The substitution effect explains why there is a direct relationship between the price of a product and the quantity of the product demanded.
Q:
An inferior good is a good for which the quantity demanded decreases as the price increases, holding everything else constant.
Q:
If the price of peaches, a substitute for plums, decreases the demand for plums will increase.
Q:
The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product.
Q:
If consumers believe the price of iPads will decrease in the future, this will cause the demand for iPads to decrease now.
Q:
The income effect explains why there is an inverse relationship between the price of a product and the quantity of the product demanded.
Q:
A normal good is a good for which the demanded increases as income decreases, holding everything else constant.
Q:
Chips and salsa are complements. If the price of salsa decreases, the demand for chips will increase.
Q:
The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in purchasing power as a result of the price change.
Q:
How does the decreasing use of traditional cameras affect the market for traditional camera film?
A) The demand curve for traditional camera film shifts to the right.
B) The quantity of traditional camera film demanded decreases.
C) The quantity of traditional camera film demanded increases.
D) The demand curve for traditional camera film shifts to the left.
Q:
If the price of gasoline decreases, what will be the impact in the market for public transportation?
A) The demand curve for public transportation shifts to the right.
B) The quantity of public transportation demanded increases.
C) The demand curve for public transportation shifts to the left.
D) The quantity of public transportation demanded decreases.
Q:
Suppose that when the price of strawberries decreases, Simone increases her purchase of whipped cream. To Simone
A) strawberries and whipped cream are complements.
B) strawberries and whipped cream and substitutes.
C) strawberries and whipped cream are normal goods.
D) strawberries are a normal good and whipped cream is an inferior good.
Q:
Suppose that when the price of hamburgers decreases, the Landry family decreases their purchases of chicken nuggets. To the Landry family
A) hamburgers and chicken nuggets are complements.
B) hamburgers and chicken nuggets are inferior goods.
C) hamburgers and chicken nuggets are normal goods.
D) hamburgers and chicken nuggets are substitutes.
Q:
If the price of refillable butane lighters was to decrease, then
A) the demand for butane would decrease.
B) the demand for butane would increase.
C) the quantity of butane demanded would increase.
D) the quantity of butane demanded would decrease.
Q:
If a decrease in income leads to an increase in the demand for sardines, then sardines are
A) an inferior good.
B) a neutral good.
C) a necessity.
D) a normal good.
Q:
If a decrease in income leads to in a decrease in the demand for mac and cheese, then mac and cheese is
A) a normal good.
B) a neutral good.
C) a complement.
D) a necessity.
Q:
Table 3-2Caviar Price per oz. (dollars)Ari's Quantity Demanded (oz.)Sonia's Quantity Demanded (oz.)Rest of Market Quantity Demanded (oz.)Market Quantity Demanded (oz.)$7560466518664552814136453624170354436220Refer to Table 3-2. The table above shows the demand schedules for caviar of two individuals (Ari and Sonia) and the rest of the market. If the price of caviar falls from $45 to $35, the market quantity demanded wouldA) decrease by 50 oz.B) increase by 70 oz.C) increase by 50 oz.D) decrease by 70 oz.
Q:
Table 3-2Caviar Price per oz. (dollars)Ari's Quantity Demanded (oz.)Sonia's Quantity Demanded (oz.)Rest of Market Quantity Demanded (oz.)Market Quantity Demanded (oz.)$7560466518664552814136453624170354436220Refer to Table 3-2. The table above shows the demand schedules for caviar of two individuals (Ari and Sonia) and the rest of the market. If the price of caviar rises from $65 to $75, the market quantity demanded wouldA) decrease by 36 oz.B) increase by 52 oz.C) increase by 36 oz.D) decrease by 52 oz.
Q:
Table 3-2Caviar Price per oz. (dollars)Ari's Quantity Demanded (oz.)Sonia's Quantity Demanded (oz.)Rest of Market Quantity Demanded (oz.)Market Quantity Demanded (oz.)$7560466518664552814136453624170354436220Refer to Table 3-2. The table above shows the demand schedules for caviar of two individuals (Ari and Sonia) and the rest of the market. At a price of $75, the quantity demanded in the market would beA) 6 oz.B) 46 oz.C) 52 oz.D) 127 oz.
Q:
Table 3-2Caviar Price per oz. (dollars)Ari's Quantity Demanded (oz.)Sonia's Quantity Demanded (oz.)Rest of Market Quantity Demanded (oz.)Market Quantity Demanded (oz.)$7560466518664552814136453624170354436220Refer to Table 3-2. The table above shows the demand schedules for caviar of two individuals (Ari and Sonia) and the rest of the market. At a price of $55, the quantity demanded in the market would beA) 42 oz.B) 136 oz.C) 178 oz.D) 233 oz.