2) Homework
After a severe bout of foreclosures and defaults on home loans, banks made it harder for people to borrow. The demand for homes ______, the supply of homes ______, and the price of homes ______.
decreases; does not change; falls
Read the news clip, then answer the following questions. After wild weather, higher food prices on horizon After heavy rain this year, the corn harvest will be less than expected while the demand for corn will continue to increase. Food prices will continue to rise. Food prices are expected to rise because the supply of corn ______ and the demand for corn ______. The ______ food decreases.
decreases; increases; supply of
If after heavy rain and low production, the weather improves and coffee growers enjoy bumper crops, the price of coffee _______ .
falls because the supply of coffee increases and the demand for coffee remains unchanged
What is the effect on the equilibrium price and the equilibrium quantity of magazines if magazines become less popular and a more productive printing technology is used? The equilibrium price of magazines _____ and the equilibrium quantity _____.
falls; increases, decreases, or remains the same
If the price of an energy bar is $6.00, a surplus occurs in the market for energy bars. To restore market equilibrium, the price of an energy bar _____, the quantity demanded _____, and the quantity supplied _____. When the market reaches equilibrium, the _____ is eliminated.
falls; increases; decreases; surplus
If the price of a danish falls, the quantity of donuts consumed will decrease and the price of a donut will rise. Use the laws of demand and supply to explain whether the above statement is true or false. The above statement is _____. The fall in the price of a danish _____ donuts and _____. The price of a donut _____.
false; decreases the demand for; decreases the quantity of donuts supplied; falls
"As more people buy computers, the demand for Internet service increases and the price of Internet service decreases, which decreases the supply of Internet service." The statement is _____ because _____.
false; an increase in demand for Internet service does not decrease the price of Internet service and a decrease in the price of Internet service does not decrease the supply of Internet service
Consumers eating higher food costs The price of milk rose about 21% from July 2006 to July 2007, while the price of frozen orange juice increased 31%. At the same time, with higher gasoline prices, the demand for ethanol increased. Because ethanol is made from corn, the price of corn rose, which in turn increased the price of bread, chicken, cheese, and the fast-foods that use cheese. As people in China and India become richer, they are eating more beef and chicken and less rice and tofulong dash—another source of higher food prices in the United States. Some corn is used to produce ethanol and an increase in the demand for ethanol has raised the price of corn because it has ______.
increased the demand for corn
The equilibrium quantity _______.
is determined at the price at which the quantity demanded equals the quantity supplied
During 1994, Brazil experienced severe frosts, which wiped out many coffee plantations. New plantations in Brazil began to produce coffee beans in 1999. During the early 2000s, countries such as Vietnam started to produce coffee beans and coffee shops such as Starbucks started to spring up across Europe. Use these events to explain why the price rose during the late 1990s, fell during the early 2000s, and rose again after 2003. The price rose during the late 1990s because the ______. The price fell during the early 2000s because the ______. The price rose again after 2003 because the ______.
supply of coffee decreased; supply of coffee increased; demand for coffee increased
When the price of a resource used in production rises, ______ and the price ______.
supply decreases; rises
Summer's here. So are higher gas prices The price of gasoline increased 15 percent in the past three weeks, mainly because of refinery shutdowns in the United States. As motorists increase their driving in the coming months, the price is predicted to rise further. When motorists increase their driving in the summer months, ______ and the price of a gallon of gasoline rises.
the demand for gasoline increases
Summer's here. So are higher gas prices The price of gasoline increased 15 percent in the past three weeks, mainly because of refinery shutdowns in the United States. As motorists increase their driving in the coming months, the price is predicted to rise further. When refineries shut down, ______ and the price of a gallon of gasoline rises.
the supply of gasoline decreases
