Chapter 4 Section 2 microeconomics

A decrease in the price of a complement in production leads to A) a decrease in the supply of the good in question. B) an increase in the supply of the good in question. C) no change in the supply of the good in question. D) a decrease in the quantity supplied of the good in question. E) an increase in the supply of the good in question and a decrease in the quantity supplied of the good in question.

A

An increase in the number of producers of bird seed ________ the supply of bird seed and shifts the supply curve of bird seed ________. A) increases; rightward B) increases; leftward C) decreases; rightward D) decreases; leftward E) does not change; rightward

A

Autoworkers negotiate a wage increase. How does this change affect the supply curve of cars? A) It shifts the supply curve leftward. B) It shifts the supply curve rightward. C) It does not shift the supply curve or create a movement along it. D) The supply curve will shift but there is not enough information to tell if the change shifts the supply curve rightward, leftward, or not at all. E) It creates a movement downward along the supply curve.

A

If the costs of producing pizza increase, which will occur? A) The supply of pizza will decrease. B) The quantity of pizzas supplied will increase as sellers try to cover their costs. C) Pizza will cease to be produced and sold. D) The demand curve for pizza will shift leftward when the price of a pizza increases. E) The demand curve for pizza will shift rightward when the price of a pizza increases.

A

If the price of iPods decreases, A) there will be a movement down along the supply curve for iPods. B) there will be a rightward shift in the iPod supply curve. C) there will be a movement up along the supply curve for iPods. D) the supply curve for iPods shifts leftward. E) there has been a decrease in the price of iTunes songs.

A

If the supply of iPods increases, then i. the supply curve for iPods has shifted rightward. ii. the price of iPods has decreased. iii. there will be a movement upward along the iPod supply curve. A) i only B) i, ii and iii C) i and ii D) ii and iii E) i and iii

A

In the above figure, an increase in cost of the cheese used to produce pizza A) shifts the supply curve from S to S1. B) shifts the supply curve from S to S2. C) results in a movement from point a to point b. D) results in a movement from point b to point a. E) has no effect.

A

In the above figure, the movement from point a to point b reflects A) an increase in the price of pizza. B) an increase in the supply of pizza. C) an increase in the number of producers of pizza. D) a decrease in the cost of the tomato sauce used to produce pizza. E) a decrease in income if pizza is a normal good.

A

In the above figure, the shift in the supply curve from S to S2 might reflect A) a decrease in the cost of the tomato sauce used to produce pizza. B) a decrease in the number of pizza producers. C) an increase in the price of a pizza. D) an increase in income if pizza is a normal good. E) an increase in the price of a good that is a substitute for consumers.

A

In the figure above, if point ʺaʺ represents the original equilibrium and point ʺbʺ the new equilibrium, then A) there has been an increase in supply. B) there has been an increase in demand. C) there has been a change in the quantity supplied and no change in supply. D) Both answers B and C are correct. E) Both answers A and B are correct.

A

Mulch is shredded wood and is a by-product in the production of lumber. Because these two goods are produced together, they are A) complements in production. B) substitutes in production. C) inputs into the same production process. D) not related. E) normal goods in production

A

Oil refiners can refine a barrel of petroleum so that it yields either more home heating oil or more diesel fuel. If the price of diesel fuel falls, there is A) an increase in the supply of home heating oil. B) a decrease in the supply of home heating oil. C) an increase in the quantity of home heating oil supplied. D) a decrease in the quantity of home heating oil supplied. E) an increase in the demand for home heating oil.

A

The above figure illustrates the market for corn. If point ʺaʺ represents the original equilibrium and point ʺbʺ the new equilibrium, which of the following could have caused the change? A) an increase in the number of corn growers B) an increase the price of wheat, a substitute in production for corn C) an increase in the cost of the fertilizer used to grow the corn D) a belief among corn farmers that the price of a bushel of corn will be higher next month E) an increase in income if corn is a normal good

A

The above figure shows the market for laptops. Which of the following shifts the supply curve from S0 to S1? A) an increase in the cost of hard drives B) a decrease in the price of laptops C) an increase in the number of laptop manufactures and sellers D) an increase in the price of laptops E) an increase in the productivity of the workers manufacturing laptops

A

The graph illustrates the supply of soda. If the price of soda rises from $0.50 a can to $1.50 a can, the quantity of soda supplied A) increases from 0 cans to 4,000 cans a day. B) decreases from 4,000 cans to 0 cans a day. C) remains unchanged because the supply increases not the quantity supplied. D) increases from 0 to 6,000 cans a day. E) remains unchanged because the supply decreases not the quantity supplied.

A

The graph illustrates the supply of sweaters. Which of the following events will increase the quantity supplied of sweaters? A) a rise in the price of a sweater B) a rise in the wage rate paid to the workers who make sweaters C) a rise in the expected future price of a sweater D) an increase in the number of sellers of sweaters E) a decrease in the number of sweater buyers

A

The market supply curve is the ________ of the ________. A) horizontal sum; individual supply curves B) vertical sum; individual supply curves C) horizontal sum; individual supply curves minus the market demand D) vertical sum; individual supply curves minus the market demand E) vertical average; individual supply curves

A

The number of corn producers increases, so the supply of corn ________ and the supply curve of corn ________. A) increases; shifts rightward B) increases; shifts leftward C) decrease; shifts rightward D) decreases; shifts leftward E) increases; does not shift

A

The supply schedule A) shows the relationship between the quantity supplied and the price of a good when all other influences on selling plans remain the same. B) is a curve showing the relationship between the amount the sellers are willing and able to sell and the price of that good when all relevant factors change. C) shows one quantity at one price. D) is the schedule that suppliers have to keep or else they will be late. E) shows the relationship between the quantity supplied and the price of a good when all other influences on selling plans change.

A

Which of the following increases the supply of a product? A) lower prices for the resources used to produce the product B) some producers going bankrupt and leaving the industry C) a higher price for the product D) an increase in the expected future price of the product E) a decrease in productivity

A

Which of the following results in a movement upward along the supply curve for movies in theaters? A) an increase in the price of movie tickets B) a decrease in the price of movie tickets C) a decrease in the price of downloaded movies D) a decrease in movie star salaries E) an increase in the number of theaters

A

Which of the following shifts the supply curve for oranges? A) disastrous weather that destroys about half of this yearʹs orange crop B) a newly discovered increase in the nutritional value of oranges C) an increase in the price of bananas, a substitute in consumption for oranges D) an increase in income for all orange consumers if oranges are a normal good E) an increase in the number of orange consumers

A

A rise in the price of a substitute in production for a good leads to A) an increase in the supply of that good. B) a decrease in the supply of that good. C) no change in the supply of that good; instead there is a change in the quantity supplied. D) a decrease in the quantity of that good supplied. E) no change in either the supply or the quantity supplied of the good.

B

An increase in the number of pineapple growers results in A) an increase in the quantity of pineapples supplied and no shift in the supply curve of pineapples. B) an increase in the supply of pineapples and a rightward shift in the supply curve of pineapples. C) an increase in the supply of pineapples and a leftward shift in the supply curve of pineapples. D) no change in the supply of pineapples and a movement along the supply curve of pineapples. E) None of the above answers is correct.

B

An increase in the productivity of producing jeans results in A) the quantity of jeans supplied increasing. B) the supply of jeans increasing. C) buyers demanding more jeans because they are now more efficiently produced. D) buyers demanding fewer jeans because their price will fall, which signals lower quality. E) some change, but the impact on the supply of jeans is impossible to predict.

B

Because of the high cost of fuel, railroads such as Union Pacific Corp and CSX Corp have increased the price they charge to haul freight. This change means that A) the demand curve for hauling freight has shifted leftward. B) the supply curve for hauling freight has shifted leftward. C) the demand curve for hauling freight has shifted rightward. D) the supply curve for hauling freight has shifted rightward. E) neither the supply curve nor the demand curve for hauling freight has shifted; the only change is that the price is higher.

B

If the automobile workersʹ union successfully negotiates a wage increase for its members, how does the wage hike affect the supply of automobiles? A) The supply increases. B) The supply decreases. C) The quantity supplied increases. D) The quantity supplied decreases. E) Both answers B and D are correct.

B

If the number of companies producing memory chips increases, then the A) supply of memory chips does not change. B) supply of memory chips increases. C) supply of memory chips decreases. D) quantity of memory chips supplied increases. E) demand for memory chips increases.

B

In the above figure, an increase in productivity A) shifts the supply curve from S to S1. B) shifts the supply curve from S to S2. C) results in a movement from point a to point b. D) results in a movement from point b to point a. E) has no effect.

B

It is expected that the price of a bushel of wheat will increase in one month. This belief will result in A) an increase in the current supply of wheat. B) a decrease in the current supply of wheat. C) a decrease in the future supply of wheat. D) no change in the current or future supply of wheat. E) an increase in the current quantity supplied of wheat.

B

Milk can be used to produce cheese or butter. If the price of a pound of butter rises, what happens to the supply of cheese? A) The supply of cheese increases. B) The supply of cheese decreases. C) The supply of cheese stays the same and there is no change in the quantity supplied of cheese. D) The supply of cheese stays the same and there is a decrease in the quantity supplied of cheese. E) The supply of cheese could increase, decrease, or stay the same depending on what happens to the supply of butter.

B

Plywood is used in the construction of houses. If the price of plywood rises, what happens to the supply of houses? A) The supply increases so that the supply curve shifts rightward. B) The supply decreases so that the supply curve shifts leftward. C) The quantity supplied increases but there is no shift in the supply curve. D) The quantity supplied decreases but there is no shift in the supply curve. E) The quantity supplied decreases and the supply curve shifts leftward.

B

Researchers have found a hybrid of corn that is cheaper to grow. This technological breakthrough A) increases the demand for corn. B) increases the supply of corn. C) decreases the supply of corn. D) Both answers A and C are correct. E) Both answers A and B are correc

B

The United Auto Workers bargained for higher wages and more benefits for autoworkers. As a result of the higher wages and increased benefits, i. the quantity of new automobiles supplied decreases. ii. the supply of new automobiles decreases. iii. the supply of new automobiles increases. A) only i B) only ii C) only iii D) both i and ii E) Neither i, ii, nor iii is correct.

B

The above figure illustrates the market for corn. If point ʺaʺ represents the original equilibrium and point ʺbʺ the new equilibrium, which of the following could have caused the change? A) a decrease in the number of corn growers B) a decrease the price of wheat, a substitute in production for corn C) an increase in the cost of the seed used to grow the corn D) a decrease in buyersʹ incomes if corn is an inferior good E) an increased belief among buyers that corn is healthy

B

The above figure shows the market for laptops. Which of the following shifts the supply curve from S0 to S2? A) an increase in the cost of hard drives B) an increase in the productivity of the workers manufacturing laptops C) a decrease in the price of laptops D) an increase in the price of laptops E) a decrease in the number of laptop manufactures and sellers

B

The graph illustrates the supply of sweaters. As the technology used to produce sweaters improves, the A) supply of sweaters decreases, and the demand for sweaters does not change. B) supply of sweaters increases, and the demand for sweaters does not change. C) quantity of sweaters supplied increases. D) quantity of sweaters supplied decreases. E) supply of sweaters increases, and the demand for sweaters increases.

B

The law of supply reflects the fact that A) people buy more of a good when its price falls. B) suppliers have an incentive to use their resources in the way that brings the biggest return. C) higher prices are more attractive to consumers because they signal a higher quality product. D) businesses can sell more goods at lower prices. E) the demand curve is downward sloping.

B

The law of supply states that other things remaining the same, a decrease in the price of a kayak leads to A) a decrease in the supply of kayaks. B) a decrease in the quantity of kayaks supplied. C) an increase in the supply of kayaks. D) an increase in the quantity of kayaks supplied. E) an increase in the supply of kayaks and a decrease in the quantity of kayaks supplied.

B

The quantity supplied of a good is A) the same thing as the quantity demanded at each price. B) the amount that the people are willing and able to sell during a given time period at a specified price. C) equal to the difference between the quantity available and the quantity desired by all consumers and producers. D) the amount the firm will sell when it can sell all it wants. E) always larger than the quantity demanded at each price.

B

Which of the following helps explain why the law of supply exists? A) Larger outputs result in lower costs of production. B) The law of increasing opportunity cost C) The costs of production remain constant throughout all levels of output. D) Sellers realize that if the price increases, they make larger profits and do not need to change their production. E) The law of demand

B

Which of the following increases the quantity supplied of compact discs but does NOT increase the supply of compact discs? A) a decrease in the price of a compact disc B) an increase in the price of a compact disc C) a decrease in the number of suppliers of compact discs D) an increase in the price of the resources used to produce compact discs E) new technology that lowers the cost of producing compact discs

B

Which of the following leads to an increase in the quantity supplied but not an increase in supply? A) a decrease in the costs of production B) an increase in the productʹs price C) an advance in the technology used to produce the good D) an increase in the price of another product that the suppliers can produce E) an increase in the number of firms producing the good or service

B

A change in the price of a good ________ its supply curve and ________ a movement along its supply curve. A) shifts; causes B) shifts; does not cause C) does not shift; causes D) does not shift; does not cause E) None of the above because the change in the price might cause either a shift in the supply curve or a movement along the supply curve depending on the size of the change.

C

Advances in productivity increase supply because they might A) increase the price expected in the future. B) decrease the number of goods available. C) decrease the cost of production. D) raise the prices of resources used to produce the good. E) increase the number of firms producing the good.

C

An increase in the number of fast-food restaurants A) raises the price of fast-food meals. B) increases the demand for fast-food meals. C) increases the supply of fast-food meals. D) increases the demand for substitutes for fast-food meals. E) increases both the demand and supply of fast-food meals.

C

If aluminum producers expect aluminum prices to fall in the future, this belief shifts the current ________ curve for aluminum to the ________. A) demand; right B) demand; left C) supply; right D) supply; left E) None of the above is correct.

C

In the above figure, the shift in the supply curve from S to S2 reflects A) an increase in the quantity of pizza supplied. B) a decrease in the quantity of pizza supplied. C) an increase in the supply of pizza. D) a decrease in the supply of pizza. E) a decrease in the supply of pizza and a simultaneous decrease in the quantity of pizza supplied.

C

One reason supply curves have an upward slope is because A) increased supply will require increased technology. B) people will pay a higher price when less is supplied. C) a higher price brings a greater profit, so firms want to sell more of that good. D) to have more of the good supplied requires more firms to open. E) None of the above answers is correct because supply curves have a downward slope.

C

The above figure shows the market for laptops. Which of the following causes a movement from B to A? A) an increase in the cost of hard drives B) an increase in the productivity of the workers manufacturing laptops C) a decrease in the price of laptops D) an increase in the price of laptops E) an increase in the number of laptop manufactures and sellers

C

The law of supply states that, other things remaining the same, A) demand increases when supply increases. B) if the price of a good increases, firms buy less of it. C) if the price of a good increases, the quantity supplied increases. D) as peopleʹs income increase, the supply of goods increases. E) if the price of a good increases, the supply increases.

C

The quantity supplied of a good, service, or resource is ________ during a specified period and at a specified price. A) the amount that people are able to sell B) the amount that people are willing to sell C) the amount that people are able and willing to sell D) the amount that people are willing and able to buy E) the amount sold

C

To be part of the supply for a good, a producer must be A) only able to supply the good. B) only willing to supply the good. C) both able and willing to supply the good. D) both able and willing to supply the good, and have already identified a buyer. E) both able and willing to supply the good, and have already sold the go

C

Which of the following increases the supply of a good and shifts its supply curve rightward? A) a smaller number of producers B) a higher wage paid to workers in the industry C) a technological advance in how the good is produced D) an increase in the cost of the resources used to produce the good E) an increase in the price of the good

C

Which of the following increases the supply of a good? A) There is a decrease in the price of a complement in production. B) Producers expect higher prices for the good in the future. C) Productivity improves. D) Prices of inputs used to produce the good rise. E) The number of producers decreases.

C

Which of the following increases the supply of gasoline? A) a situation where the quantity of gasoline demanded exceeds the quantity supplied B) an increase in the price of gasoline C) a decrease in the price of a resource used to produce gasoline, such as crude oil D) a decrease in the demand for gas-guzzling, sport utility vehicles E) an increase in income if gas-guzzling, sport utility vehicles are a normal good

C

Which of the following indicates that the law of supply applies to makers of soda? A) An increase in the price of a soda leads to an increase in the demand for soda. B) An increase in the price of a soda leads to an increase in the supply of soda. C) An increase in the price of a soda leads to an increase in the quantity of soda supplied. D) A decrease in the price of a soda leads to an increase in the quantity of soda demanded. E) A decrease in the price of a soda leads to an increase in the supply of soda.

C

Which of the following results in an increase in the supply of a good or service? A) a fall in the price of the good or service B) a smaller number of sellers producing the good or service C) an increase in foreign imports of the good or service D) higher taxes imposed upon producers of the good or service E) a rise in the price of the good or service

C

Which of the following shifts the supply curve of rutabagas rightward? (A rutabaga is a potato-like vegetable.) A) an increase in the price of a rutabaga B) an exceptionally cold summer that killed much of the rutabaga crop C) a fall in the price of fertilizer used to grow rutabagas D) Both answers A and C shift the supply curve of rutabagas rightward. E) Both answers A and B shift the supply curve of rutabagas rightward.

C

ʺOther things remaining the same, if the price of a good rises, the quantity supplied of that good increases.ʺ This sentence describes a A) shift of a supply curve. B) shift of the price curve. C) movement along a supply curve. D) movement along the price curve. E) movement along the quantity curve.

C

A supply curve A) slopes downward. B) slopes upward. C) is a graph of the relationship between quantity supplied of a good and its price. D) Both answers B and C are correct. E) Both answers A and C are correct.

D

If a higher price for wheat decreases the quantity of corn being produced, which of the following describes what has occurred? A) The supply of wheat increased, and the supply of corn decreased. B) The quantity of wheat supplied increased, and quantity of corn supplied decreased. C) The supply of wheat increased, and the quantity of corn supplied decreased D) The quantity of wheat supplied increased, and the supply of corn decreased. E) The supply of wheat decreased, and the supply of corn decreased.

D

If the number of sellers decreases, then the supply curve ________ and the supply ________. A) shifts rightward; increases B) shifts rightward; decreases C) shifts leftward; increases D) shifts leftward; decreases E) does not shift; does not change, but there is a decrease in the quantity supplied

D

In the above figure, the shift in the supply curve from S to S1 reflects A) an increase in the quantity of pizza supplied. B) a decrease in the quantity of pizza supplied. C) an increase in the supply of pizza. D) a decrease in the supply of pizza. E) None of the above answers is correct.

D

Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to A) a decrease in the supply of electric cars so that the supply curve shifts leftward. B) a decrease in the supply of electric cars so that the supply curve shifts rightward. C) an increase in the supply of electric cars so that the supply curve shifts leftward. D) an increase in the supply electric cars so that the supply curve shifts rightward. E) no change in the supply of electric cars, only a change in the quantity supplied of electric cars.

D

Suppose the price of leather used to produce shoes increases. The higher price of leather ________ the supply of shoes, and the supply curve of shoes ________. A) increases; shifts rightward B) increases; shifts leftward C) decreases; shifts rightward D) decreases; shifts leftward E) does not change; does not shift

D

The above figure illustrates the market for corn. If point ʺaʺ represents the original equilibrium and point ʺbʺ the new equilibrium, which of the following could have caused the change? A) an increase in consumersʹ preferences for corn B) an increase in consumersʹ income if corn is a normal good C) an increase in labor costs of producing corn D) an improvement in the technology of producing corn E) an increase in consumersʹ income if corn is an inferior good

D

The above figure shows the market for laptops. Which of the following causes a movement from A to B? A) a decrease in the number of laptop manufactures and sellers B) an increase in the productivity of the workers manufacturing laptops C) an increase in the cost of hard drives D) an increase in the price of laptops E) a decrease in the price of laptops

D

The graph illustrates the supply of sweaters. A fall in the price of sweaters brings A) a movement along the supply curve. B) a decrease in the quantity supplied of sweaters. C) a shift of the supply curve. D) Both answers A and B are correct. E) Both answers B and C are correct.

D

The graph illustrates the supply of sweaters. Which of the following events will increase the supply of sweaters? A) a rise in the price of a sweater B) a rise in the wage rate paid to the workers who make sweaters C) a rise in the expected future price of a sweater D) an increase in the number of sellers of sweaters E) an increase in income if sweaters are a normal good

D

The price of salsa rises. How does the increase in the price of salsa affect the supply of salsa? A) The supply of salsa increases. B) The supply of salsa decreases. C) There is no change to either the supply of salsa or the quantity of salsa supplied. D) There is no change to the supply of salsa, but the quantity of salsa supplied increases. E) There is no change to the supply of salsa, but the quantity of salsa supplied decreases.

D

The quantity supplied of a good or service is the A) list of all quantities at different prices, as illustrated by a supply schedule and a supply curve. B) list of all quantities at different prices, as illustrated by a demand schedule and a demand curve. C) one quantity produced at a variety of prices. D) quantity produced at one price.

D

Which of the following does NOT increase the supply of personal computers, that is, does NOT shift the supply curve of personal computers? A) an advance in the technology used to produce personal computers B) an increase in the number of firms producing personal computer C) a fall in the cost of the components used to assemble personal computers D) a rise the price of a personal computer E) a change in the expected future price of a personal computer

D

Which of the following shifts the supply curve of popcorn leftward? A) a decrease in the price of popcorn B) an increase in the price of popcorn C) a technological development in the production of popcorn D) a decrease in the number of popcorn suppliers E) a decrease in the cost of producing popcorn

D