Chapter 3
What is the difference between an "increase in demand" and an "increase in quantity demanded"?
An "increase in demand" is represented by a rightward shift of the demand curve while an "increase in quantity demanded" is represented by a movement along a given demand curve.
What is the difference between an "increase in supply" and an "increase in quantity supplied"?
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.
Which of the following is the correct way to describe equilibrium in a market?
At equilibrium, quantity demanded equals quantity supplied.
Let D= demand, S = supply, P = equilibrium price, and Q= equilibrium quantity. What happens in the market for walnuts if the Centers for Disease Control and Prevention announces that consuming a half cup of walnuts each week helps to lower levels of bad cholesterol?
D increases, S no change, P and Q increase.
The demand by all the consumers of a given good or service is the ________ for the good or service.
Market demand
Let D= demand, S = supply, P = equilibrium price, and Q= equilibrium quantity. What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged?
S decreases, D no change, P increases, Q decreases.
Let D = demand, S = supply, P = equilibrium price, and Q = equilibrium quantity. What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles?
S increases, D no change, P decreases, Q increases
Assume there is a shortage in the market for digital music players. Which of the following statements correctly describes this situation?
Some consumers will be unable to obtain digital music players at the market price and will have an incentive to offer to buy the product at a higher price.
How does the increasing use of digital cameras affect the market for traditional camera film?
The demand curve for traditional camera film shifts to the left.
Which of the following is evidence of a surplus of bananas?
The price of bananas is lowered in order to increase sales.
Which of the following is evidence of a shortage of walnuts?
The quantity of walnuts demanded is greater than the quantity supplied.
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 United States?
The supply curve shifted to the left.
Holding everything else constant, an increase in the price of MP3 players will result in
a decrease in the quantity of MP3 players demanded
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. If, following the hurricane, the price remained at its pre-hurricane level, we would expect to see
a shortage of oranges
A decrease in the price of GPS systems will result in
a smaller quantity of GPS systems supplied
Which of the following would shift the supply curve for MP3 players to the left?
an increase in the price of an input used to produce MP3 players
Which of the following will not shift the demand curve for a good?
an increase in the price of the good
If the Apple Watch and the Samsung Gear S2 are considered substitutes, then, other things equal, an increase in the price of the Apple Watch will
increase the demand for the Gear S2
A supply schedule
is a table that shows the relationship between the price of a product and the quantity of the product supplied.
At market equilibrium
quantity demanded equals quantity supplied
If the quantity demanded for a product exceeds the quantity supplied, the market price will rise until
quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.
The supply curve for watches
shows the relationship between the price of watches and the quantity of watches supplied.
When the price of a good rises, consumers buy a smaller quantity because of the ________ effect and the ________ effect.
substitution;income
If the price of smartphones was to increase, then
the demand for smartphone apps would decrease
Select the phrase that correctly completes the following statement. "An increase in input prices caused a decrease in the supply of baseballs. As a result ________."
the price of baseballs increased and the quantity demanded of baseballs decreased
A change in all of the following variables will change the market demand for a product except
the price of the product
At a product's equilibrium price
the product's demand curve crosses the product's supply curve.
The law of demand implies, holding everything else constant, that as the price of bagels increases
the quantity of bagels demanded will decrease
If in the market for peaches the supply curve has shifted to the left
the supply of peaches has decreased