ECO Ch.4
A substitute in production is a good that is ___ another good, and a complement in production is a good that is ___ another good.
Produced in place of; produce together with
Which of the following illustrates the law of demand? Other things remain the same, a rise in the price of a good will ___
Decrease the quantity demanded of that good
Other things remaining the same, a call in the price of peanuts will ____
Decrease the quantity supplied of peanuts
Dry weather has delayed rice planting and harvest will be low. But we is enjoying a bumper crop. Using the demand and supply model, explain how the prices of race and we will change and how the markets for rice and we will influence each other. A poor rice harvest will ___ rice and ___ it's price.
Decrease the supply of; raise
Airplanes are more crowded than ever and gas are at a five-year high. Does this news clip imply that the law of demand doesn't work in the real world? Explain why or why not. The news clip implies that the law of demand ___ work in the real world because ___
Does; other things have not remained the same as some event must have increased the demand for airline travel
Each of the following four events in the market for air travel. A. Airfares rise, while train fares done change B. The price of jet fuel falls C. Airlines reduce the number of flights each day D. D. People expect airfares to decrease next summer Only one of the following statements about the market for air travels is correct. Which one?
Event A changes neither the supply of the demand for air travel
If the price of frozen yogurt rises, the quantity of ice cream consumed will increase in the price of ice cream will fall. Use the laws of demand and supply to explain whether the above statement is true or false. The rise in the price of frozen yogurt ___ ice cream and ___.
Increases the demand for; increases the quantity of ice cream supplied
A bump or wheat crop ___ wheat and ___ it's price
Increases the supply of; lowers
The average price for regular gasoline at US pumps fell almost 4 cents in March to $2.50 a gallon. The price of crude oil dropped to $43.46 per barrel on March 17, the lowest since March 2009. Explain the effect of. Lower crude oil price on the supply of gasoline. A call in the Rice of crude oil will ___
Lower the cost of producing gasoline and increase the supply of gasoline.
In the market for smartphones, which of the following events increases the supply of smartphones?
New technology that lowers the cost of making a smartphone
Which of the following events in the market for timber beams illustrates the law of supply? 1. The wage rate of sawmill workers rises 2. The price of sawdust rises 3. The price of a timber beam rises 4. The price of a timber beam rises 5. Environments convince congress to introduce a new law that reduces the amount t of forest that can be cut for timber 6. A new technology lowers the cost of producing timber beams
Only event 3
Heavy rain has delayed the planting of corn and soybean and soggy conditions have slowed the winter wheat harvest. Explain how heavy rain and soggy conditions will change the price of corn, soybean, and wheat. Heavy rain and soggy conditions will
Raise the prices of corn and soybean because the delayed plantings will decrease the supply of corn and soybean
A substitute is a good that is _____ another good, and a complement is a good that is _____ another good.
consumed in place of; consumed together with
In market equilibrium, at the equilibrium price and equilibrium quantity, ___
the quantity demanded equals the quantity supplied and equals the quantity bought and sold
Which of the following statements is about a normal good, which is about an inferior good, which is about both, and which is about neither? 1. With income following in the recession, people are buying more chicken 2. People are buying more beef now that incomes have increased 3. People are buying more chicken because the price of chicken has fallen 4. With higher incomes people are switching from chicken to beef
1 is inferior, 2 is normal, 3 is neither, 4 is both
Which of the following events in the market for smartphones illustrates the law of demand? 1. The prices of a smartphone falls 2. Producers announce that smartphone prices will fall next month 3. The price of a call made from a smartphone falls 4. The price of a call made from a land-line phone increases 5. An increase in memory makes smartphones more popular
1. The prices of a smartphone falls
Reid I on the price of coffee and explained how we know that the price increased in 2014 because the supply of coffee decrease and not because the demand for coffee increased. Using the demand and supply model we know the following: ___ brings an increase in price and a decrease in quantity, which is what happened in the market for coffee ___ brings an increase in the price and an increase in quantity, which is not what happened in the market for coffee
A decrease in supply; an increase in demand
Which of the following statements describes the law of market forces? A. A shortage of cabbage increased the price of cabbage and a surplus of corn lowered its price B. When the price of corn fell, nothing else changed and farmers planted fewer acres with corn C. A rise in the price of cabbage creates a surplus of cabbage and a fall in the price of corn creates a shortage of corn D. When the price of cabbage increased, nothing else changed and people bought less cabbage
A. A shortage of cabbage increased the price of cabbage and a surplus of corn lowered its price
Jeb makes the following for statements about peanuts. Which statement best describes his quantity demanded in the peanut market?
At a price of one dollar per pack, I plan to buy two packs of peanuts per week
Aqua Springs makes the following four statements about bottled spring water. Which statement best describes the firm's quantity supplied in the bottled water market? A. We would sell more water if the demand for it were greater B. At a price of $1 gallon, we plan to sell 200 gallons per day C. If we could get a higher price, wed bottle more water D. We'll switch from plain water to flavored water is flavored water is more profitable
B. At a price of $1 gallon, we plan to sell 200 gallons per day
Which of the following statements by Aqua Springs demonstrates that the firms selling plans obey the law of supply? A. We can easily deceasing the production of plain water and Incase the production of flavored water B. If the price of bottled water falls and all the other influences in our selling plans remain the same, we will cut back on production and lay off some workers C. We've been hit by a rise in the price of plastic bottles and will lower production D. At a roadie or $1 gallon, we plan to sell 2,000 gallons per day
B. If the price of bottled water falls and all the other influences in our selling plans remain the same, we will cut back on production and lay off some workers
When floods wiped out the banana crop in Central America, the equilibrium price of bananas ________ and the equilibrium quantity of bananas ________. A. rose; increased B. rose; decreased C. fell; increased D. fell; decreased
B. rose; decreased
Now in the market for air travel, four additional events occur at one time E. A mild winter in New York induces more people to vacation at home F. With deep snow in the Rockies, people flock to the ski supplies G. The price of train travel rises H. The price of a pound of air cargo falls Which of the following five statements about the market for air travel is correct?
Event G increases the demand for air travel
The statement "if the price of frozen yogurt rises, the quantity of ice cream consumed will increase and the price of the ice cream will fall" is
False
"As more people by gym memberships, the demand for running shoes will increase in the price of a pair of running shoes will rise. The rise in the price of a pair of running shoes will increase the supply of running shoes. " This statement is ___ because ___
False; as the price of a pair of running shoes rises, the supply of running shoes does not increase
A demand schedule is a list of the ___ at each different price when all other influences on buying plans remain the same. A demand curve is a graph of ___
Quantities demanded; a demand schedule
A supple schedule is a list of the ___ at each different price when all other influences on selling plans remain the same. A supply curve is a graph of ___
Quantities supplied; a supply schedule
The price of ice cream
Rises
The markets of wheat and rice influence each other because wheat and rice are ___
Substitute, so a higher price of rice will increase the demand for wheat
Many Americans are selling their used cars and buying new fuel-efficient hybrids. Other things remaining the same, in the market for used cars, ___ and in the market for hybrids ___
Supply increases and the price falls; demand increases and the price rises
If Brazilian oranges were sold in the US market, the ___ will increase because ___
Supply of orange juice; the cost of producing orange juice will fall and the quantity demanded will increase
A decrease in the demand for chocolate with no change in the supply of chocolate will create a ___ of chocolate at today's price, but gradually the price will ___
Surplus; fall
In the market for jeans, which of the following events increases the demand for a pair of jeans? A rise in the wage rate paid to garment workers B. rise in the price of a denim skirt (a substitute for jeans) C. fall in the price of denim cloth D. new technology, which reduces the time it takes to make a pair of jeans
Th price of a denim skirt (a substitute for jeans) rises
Which of the following statements by Tom demonstrates that his buying plans obey the law of demand?
The only thing that's changed is the price of textbooks: they've become more expensive and now I'm not buying as many
Consider the market for coffee. Consider the price of a cup of coffee rises. Explain the effect of this event on the quantity of coffee demanded and on the demand for coffee.
The quantity of coffee demanded decreases and the demand for coffee is unchanged.
Demand is ___, when all other influences on buying plans remain the same
The relationship between the quantity demanded of a good and the price of the good
Supply is ___, when all other influences on buying plans remain the same.
The relationship between the quantity supplied of a good and the price of a good
Suppose a new technology lowers the cost of producing skim milk. Explain the effect of this event on the quantity of skim milk supplied and on the supply of skim milk.
The supply of skim milk increases
The United States does not allow oranges from Brazil (the worlds largest producer of oranges) to enter the United States. If Brazilian oranges were sold in the United States, oranges and orange juice would be cheaper. Use the laws of demand and supply to explain whether the above statement is true or false. If Brazilian oranges are sold in the US market, then the ___ will increase, the price of oranges ____
supply of oranges; will fall, and the statement is true
Which of the following statements describes a change in the quantity supplied and which describes a change in supply? 1. Farms are selling less chicken because the price of turkey has increased 2. Farms are selling less chicken because the price of chicken has fallen 3. Farms are selling more chicken because the price of chicken has risen 4. Farms are selling more chicken because the cost of chicken has fallen
1 and 4 are changes in supply and 2 and 3 are changes in the quantity supplied
Which of the following statements about the market for chicken describes a change in the quantity demanded in which describes a change in demand? 1. People are buying less chicken because the price of beef has fallen 2. People are buying less chicken because the price of chicken has increased 3. People are buying more chicken because the price of chicken has fallen 4. The cost of chicken feed has increased
1 is a change in demand and 2 and 3 are changes in the quantity demanded