CHAPTER 3

c. production technology

A change in which factor would shift the supply curve? *A.* the price of the good being sold *B.* the demand for the product *C.* product technology *D.* the willingness of consumers to pay

a leftward shift in the demand curve

A decrease in demand refers to:

a change in the demand for the good even before the supply actually decreases

A decrease in expected future supply of a good will lead to:

decrease | decrease

A decrease in income causes demand for a normal good to ________, and an increase in income causes demand for an inferior good to ________.

increases

A decrease in production costs at any given quantity ______ supply.

make suppliers more likely to produce steel, thus shifting the supply curve down and to the right

A decrease in the opportunity cost of steel production will:

a leftward shift in the demand curve for the other substitute good

A decrease in the price of one substitute good causes:

the quantity demanded of a good is higher when its price is lower

A demand curve indicates that:

increases | up and to the left

A farmer can grow either apples or oranges. An increase in the price of apples ______ the opportunity cost of growing oranges so that the supply curve of oranges shifts ______.

increases | up and to the left

A farmer can grow soy or sorghum. If the price of soy increases, the opportunity cost of growing sorghum ______, shifting the supply curve of sorghum ______.

the opportunity cost of producing soccer balls rises, so the supply curve of soccer balls decreases

A firm produces volleyballs and soccer balls. What happens to the supply of soccer balls if the market price of volleyballs increases?

increases | increases

A good is considered normal if demand for it ______ when income ______.

supply of the product to increase

A government subsidy to producers causes the:

increases

An increase in a per unit production subsidy ______ supply.

decreases

An increase in a per unit production tax ______ supply.

$4,500

Calculate the dollar amount of consumer surplus being earned in this market when the price is $30 and there are 300 units consumed.

5,000

Calculate the total dollar amount of producer surplus earned in this market at a price of $100.

$800

Calculate the total dollar amount of producer surplus earned in this market if the market price is $60.

a. 36 | $4

From the figure, the maximum price that consumers are willing to pay for _____ units of Good X is _____ per unit. *A.* 36 | $4 *B.* 11 | $4 *C.* 36 | $12 *D.* 26 | $4

c. at a price of $6 per unit, consumers are willing and able to purchase 26 units of good x

From the figure, which statement is TRUE? *A.* At a price of $12 per unit, consumers are willing and able to purchase between 11 and 26 units of Good X *B.* 36 units of Good X can be purchased by spending a total of $4 *C.* At a price of $6 per unit, consumers are willing and able to purchase 26 units of Good X *D.* At a price of $4 per unit, consumers are willing and able to purchase 11 units of Good X

80,000

If the price of bananas is $10 a pound, which number is closest to the number of pounds that suppliers will supply?

0

If the price of bananas is $2 a pound, how many pounds of bananas will suppliers supply?

$30

In the diagram, for a market price of $4 total consumer surplus equals:

shift to D3

In the diagram, the current demand curve for chicken legs is represented by D1. If the price of chicken thighs, a substitute for chicken legs, decreases, the demand curve for chicken legs will:

$60

In the figure, a $10 tax is imposed on the market for lobsters. What is the market price that lobster producers would need to receive to induce them to produce 5,000 bushels of lobster per day?

$100

Producer surplus at a price of $40 is:

true

T/F: A change in price is reflected by a movement along the same demand curve while a change in demand refers to a shift of the entire demand curve.

true

T/F: A change in quantity supplied is reflected by a movement along the same supply curve while a change in supply refers to a shift in the entire supply curve.

true

T/F: A decrease in the cost of inputs will shift the supply curve down and to the right.

false

T/F: A higher opportunity cost of producing a good increases the supply of that good.

false

T/F: Advances in technology such as personal computers and cellular telecommunications are indicated in the supply graph by a movement along the supply curve.

false

T/F: Advertising, fads, and fashion are examples of influences on demand that are generally referred to as altering expectations about products.

$60,000

The market price of the product is $20 per unit. Calculate the dollar amount of consumer surplus being earned in this market.

100 books

What is the maximum amount that buyers are willing and able to pay at a price of $45 per book?

$45

What is the maximum price per book that buyers are willing to pay for 2,500 books?

a. a decrease in the price of a complement good

Which factor would cause the change in the figure? *A.* a decrease in the price of a complement good *B.* a decrease in the price of the product *C.* a decrease in the price of a substitute good *D.* an increase in taxes

a. consumer income increases in the market for a normal good

Which of the following could explain the figure? *A.* Consumer income increases in the market for a normal good *B.* Consumer income falls in the market for a normal good *C.* Consumer income rises in the market for an inferior good *D.* Consumer income remains the same and the price of the good falls

c. an increase in the price of a substitute good

Which of the following factors would cause the change in the figure? *A.* an increase in the price of a complement good *B.* a decrease in peoples' willingness to pay for the good *C.* an increase in the price of a substitute good *D.* an increase inn income for an inferior good

a. at a price of $6 per unit, consumers are willing and able to buy 10 units

Which statement is TRUE regarding the figure? *A.* At a price of $6 per unit, consumers are willing and able to buy 10 units *B.* The maximum price demands are willing to pay for 15 units is $6 per unit *C.* The higher the price, the greater the quantity demanded *D.* At a price of $3.75 per unit, consumers are indifferent between buying 10 and 15 units

a. figure a depicts the expectation that the future price will decrease

Which statement is TRUE? *A.* Figure A depicts the expectation that the future price will decrease *B.* Figure A depicts an increase in taxes *C.* Figure B depicts falling input prices *D.* Figure B depicts technological innovations