ECON 001 ⟫ Problem Set #4

*[Question 11]* 3 pts *If consumers are advised that multigrain bread will substantially lower the risk fo cancer, which of the following will happen in the market for multigrain bread?* ⚪️The demand curve will shift to the left, decreasing the price of multigrained bread. ⚪️The supply curve will shift to the left, increasing the price of multigrain bread. ⚪️The demand curve will shift to the right, increasing the price of multigrained bread. ⚪️The supply curve will shift to the right, decreasing the price of multigrained bread. ⚪️None of the above.

*[Question 11]* 3 pts *If consumers are advised that multigrain bread will substantially lower the risk fo cancer, which of the following will happen in the market for multigrain bread?* ⚪️The demand curve will shift to the left, decreasing the price of multigrained bread. ⚪️The supply curve will shift to the left, increasing the price of multigrain bread. 🔘*The demand curve will shift to the right, increasing the price of multigrained bread.* ⚪️The supply curve will shift to the right, decreasing the price of multigrained bread. ⚪️None of the above.

*[Question 12]* 4 pts *Suppose the demand and supply for books can be expressed by the following two equations:* *Demand for books: Qd = 250 - 15P* *Supply of books: Qs = 140 + 7P* *Given the information above, what is the equilibrium price of books?* ⚪️$8 ⚪️$7.5 ⚪️$6 ⚪️$5 ⚪️None of the above

*[Question 12]* 4 pts *Suppose the demand and supply for books can be expressed by the following two equations:* *Demand for books: Qd = 250 - 15P* *Supply of books: Qs = 140 + 7P* *Given the information above, what is the equilibrium price of books?* ⚪️$8 ⚪️$7.5 ⚪️$6 🔘*$5* ⚪️None of the above

*[Question 13]* 3 pts *Suppose that the demand and supply for books can be expressed by the following two equations:* *Demand for books: Qd = 250 - 15P* *Supply of books: Qs = 140 + 7P* *Given the information above, what is the equilibrium quantity of books sold?* ⚪️175 ⚪️130 ⚪️52 ⚪️182 ⚪️None of the above

*[Question 13]* 3 pts *Suppose that the demand and supply for books can be expressed by the following two equations:* *Demand for books: Qd = 250 - 15P* *Supply of books: Qs = 140 + 7P* *Given the information above, what is the equilibrium quantity of books sold?* 🔘*175* ⚪️130 ⚪️52 ⚪️182 ⚪️None of the above

*[Question 14]* 3 pts *Suppose that the demand and supply for books can be expressed by the following two equations:* *Demand for books: Qd = 250 - 15P* *Supply of books: Qs = 140 + 7P *If P = $4 initially, then which of the following statements is true?* ⚪️There is a surplus equal to 22 ⚪️There is a shortage equal to 22 ⚪️The market is in equilibrium, ⚪️There is a shortage, but it is impossible to determine how large. ⚪️There is a surplus, but it is impossible to determine how large.

*[Question 14]* 3 pts *Suppose that the demand and supply for books can be expressed by the following two equations:* *Demand for books: Qd = 250 - 15P* *Supply of books: Qs = 140 + 7P *If P = $4 initially, then which of the following statements is true?* ⚪️There is a surplus equal to 22 🔘*There is a shortage equal to 22* ⚪️The market is in equilibrium, ⚪️There is a shortage, but it is impossible to determine how large. ⚪️There is a surplus, but it is impossible to determine how large.

*[Question 15]* 3 pts *Suppose that convection ovens are a normal good. Suppose that the income of households decrease, while at the same time there is a reduction in the cost of inputs for convection ovens. As a result of these simultaneous changes, the demand curve for convection ovens will ______ while the supply curve for convection ovens will ______.* ⚪️shift to the left; shift upwards (to the left) ⚪️shift to the right; shift upwards (to the left) ⚪️shift to the left; shift downwards (to the right) ⚪️shift to the right; shift downwards (to the right) ⚪️shift to the right; remain unchanged ⚪️shift to the left; remain unchanged

*[Question 15]* 3 pts *Suppose that convection ovens are a normal good. Suppose that the income of households decrease, while at the same time there is a reduction in the cost of inputs for convection ovens. As a result of these simultaneous changes, the demand curve for convection ovens will ______ while the supply curve for convection ovens will ______.* ⚪️shift to the left; shift upwards (to the left) ⚪️shift to the right; shift upwards (to the left) 🔘*shift to the left; shift downwards (to the right)* ⚪️shift to the right; shift downwards (to the right) ⚪️shift to the right; remain unchanged ⚪️shift to the left; remain unchanged

*[Question 16]* 4 pts *Suppose convection ovens are a normal good. Suppose that the income of households decrease, while at the same time there is a reduction in the cost of inputs for convection ovens. We would expect that the new equilibrium price of convection ovens will ______ while the new equilibrium quantity of convection ovens will ______.* ⚪️increase; increase ⚪️increase; decrease ⚪️be ambiguous; decrease ⚪️decrease; increase ⚪️be ambiguous; increase ⚪️increase; be ambiguous ⚪️decrease; be ambiguous

*[Question 16]* 4 pts *Suppose convection ovens are a normal good. Suppose that the income of households decrease, while at the same time there is a reduction in the cost of inputs for convection ovens. We would expect that the new equilibrium price of convection ovens will ______ while the new equilibrium quantity of convection ovens will ______.* ⚪️increase; increase ⚪️increase; decrease ⚪️be ambiguous; decrease ⚪️decrease; increase ⚪️be ambiguous; increase ⚪️increase; be ambiguous 🔘*decrease; be ambiguous*

*[Question 17]* 4 pts *Which of the following statements about the market represented by the figure is correct?* (Please use the image on Canvas) ⚪️At a price of $50.00, there is an excess supply of 11 million units. ⚪️At a price of $50.00, there is an excess demand of 11 million units. ⚪️At a price of $50.00, there is an excess supply of 15 million units. ⚪️At a price of $50.00, the is an excess demand of 15 million units. ⚪️At a price of $50.00, there is an excess demand of 25 million units.

*[Question 17]* 4 pts *Which of the following statements about the market represented by the figure is correct?* (Please use the image on Canvas) ⚪️At a price of $50.00, there is an excess supply of 11 million units. ⚪️At a price of $50.00, there is an excess demand of 11 million units. 🔘*At a price of $50.00, there is an excess supply of 15 million units.* ⚪️At a price of $50.00, the is an excess demand of 15 million units. ⚪️At a price of $50.00, there is an excess demand of 25 million units.

*[Question 18]*4 pts *Consider the market represented by the figure below. If the price of the good is currently $50.00, the price will* (Please use the image on Canvas) ⚪️fall, causing the quantity demanded to fall. ⚪️fall, causing the quantity supplied to fall. ⚪️rise, causing the demand curve to shift to the right. ⚪️rise, causing the supply curve to shift to the left. ⚪️fall, causing the supply curve to shift to the right.

*[Question 18]*4 pts *Consider the market represented by the figure below. If the price of the good is currently $50.00, the price will* (Please use the image on Canvas) ⚪️fall, causing the quantity demanded to fall. 🔘*fall, causing the quantity supplied to fall.* ⚪️rise, causing the demand curve to shift to the right. ⚪️rise, causing the supply curve to shift to the left. ⚪️fall, causing the supply curve to shift to the right.

*[Question 19]* 3 pts *Refer to the figure below. Which of the following could have caused the demand curve to shift from D1 to D2?* (Please use the image on Canvas) ⚪️An decrease in income (assuming the good is normal) ⚪️An increase in the number of buyers in the market. ⚪️An decrease in the price of a complement ⚪️An increase in the price of a substitute. ⚪️An expectation of higher prices in the future.

*[Question 19]* 3 pts *Refer to the figure below. Which of the following could have caused the demand curve to shift from D1 to D2?* (Please use the image on Canvas) 🔘*An decrease in income (assuming the good is normal)* ⚪️An increase in the number of buyers in the market. ⚪️An decrease in the price of a complement ⚪️An increase in the price of a substitute. ⚪️An expectation of higher prices in the future.

*[Question 1]* 2 pts *Which of the following scenarios illustrates the law of demand?* ⚪️A. Miguel buys fewer pencils at $2 per pencil than at $1 per pencil. ⚪️B. Roman buys more ice cream at $4 per half-gallon than at $3 per half gallon. ⚪️C. Derek buys more sweaters at %50 each than at $35 each ⚪️D. Only (A) and (C) are examples of the law of demand. ⚪️E. (A), (B), and (C) are examples of the law of demand. ⚪️F. None of the above are examples of the law of demand.

*[Question 1]* 2 pts *Which of the following scenarios illustrates the law of demand?* 🔘*A. Miguel buys fewer pencils at $2 per pencil than at $1 per pencil.* ⚪️B. Roman buys more ice cream at $4 per half-gallon than at $3 per half gallon. ⚪️C. Derek buys more sweaters at %50 each than at $35 each ⚪️D. Only (A) and (C) are examples of the law of demand. ⚪️E. (A), (B), and (C) are examples of the law of demand. ⚪️F. None of the above are examples of the law of demand.

*[Question 20]* 2 pts *Refer to the table below. If the price of radios is $55, there would be an ______ of ______ radios in this market.* (Please use the image on Canvas) ⚪️excess demand; 700 ⚪️excess demand; 500 ⚪️excess supply; 100 ⚪️excess supply; 600 ⚪️excess demand; 100

*[Question 20]* 2 pts *Refer to the table below. If the price of radios is $55, there would be an ______ of ______ radios in this market.* (Please use the image on Canvas) ⚪️excess demand; 700 ⚪️excess demand; 500 🔘*excess supply; 100* ⚪️excess supply; 600 ⚪️excess demand; 100

*[Question 21]* 4 pts *If both the supply and demand curves shift to the left, which of the following would happen?* ⚪️The equilibrium quantity increases. ⚪️The equilibrium price and the equilibrium quantity increase. ⚪️The equilibrium price and the equilibrium quantity decrease. ⚪️The equilibrium price decrease and the equilibrium quantity is ambiguous. ⚪️The equilibrium quantity decrease and the equilibrium price is ambiguous.

*[Question 21]* 4 pts *If both the supply and demand curves shift to the left, which of the following would happen?* ⚪️The equilibrium quantity increases. ⚪️The equilibrium price and the equilibrium quantity increase. ⚪️The equilibrium price and the equilibrium quantity decrease. ⚪️The equilibrium price decrease and the equilibrium quantity is ambiguous. 🔘*The equilibrium quantity decrease and the equilibrium price is ambiguous.*

*[Question 22]* 4 pts *Tickets to see a Beyonce concert at the Staples Center was sold out within 10 minutes of going on sale. Many fans were disappointed that they could not see the concert. This implies that ⚪️the price of a ticket was set above the equilibrium price. ⚪️there is no excess demand or supply at the current ticket price. ⚪️the price of a ticket is currently set at equilibrium. ⚪️the price of a ticket was set below the equilibrium price.

*[Question 22]* 4 pts *Tickets to see a Beyonce concert at the Staples Center was sold out within 10 minutes of going on sale. Many fans were disappointed that they could not see the concert. This implies that ⚪️the price of a ticket was set above the equilibrium price. ⚪️there is no excess demand or supply at the current ticket price. ⚪️the price of a ticket is currently set at equilibrium. 🔘*the price of a ticket was set below the equilibrium price.*

*[Question 2]* 1 pts *The demand curve is the downward-sloping line that shows the relationship between price and quantity demanded.* ⚪️True ⚪️False

*[Question 2]* 1 pts *The demand curve is the downward-sloping line that shows the relationship between price and quantity demanded.* 🔘*True* ⚪️False

*[Question 3]* 1 pts *The only variable that can cause movement along the demand curve is* ⚪️the price of the good itself ⚪️income ⚪️the number of buyers ⚪️the price of substitute goods

*[Question 3]* 1 pts *The only variable that can cause movement along the demand curve is* 🔘*the price of the good itself* ⚪️income ⚪️the number of buyers ⚪️the price of substitute goods

*[Question 4]* 1 pts *A demand curve is a graphical representation of* ⚪️consumer tastes ⚪️the demand schedule ⚪️national income ⚪️relative prices

*[Question 4]* 1 pts *A demand curve is a graphical representation of* ⚪️consumer tastes 🔘*the demand schedule* ⚪️national income ⚪️relative prices

*[Question 5]* 2 pts *If Motel 6 rooms are an inferior good, an decrease in income will* ⚪️decrease the price of Motel 6 rooms. ⚪️shift the demand curve for Motel 6 rooms to the right. ⚪️shift the demand curve for Motel 6 rooms to the left. ⚪️shift the supply curve of Motel 6 rooms to the right. ⚪️shift the supply curve of Motel 6 rooms to the left.

*[Question 5]* 2 pts *If Motel 6 rooms are an inferior good, an decrease in income will* ⚪️decrease the price of Motel 6 rooms. 🔘*shift the demand curve for Motel 6 rooms to the right.* ⚪️shift the demand curve for Motel 6 rooms to the left. ⚪️shift the supply curve of Motel 6 rooms to the right. ⚪️shift the supply curve of Motel 6 rooms to the left.

*[Question 6]* 2 pts *Suppose that bagels and muffins are substitutes. If the price of bagels increase we would expect* ⚪️the demand curve for muffins will shift to the right. ⚪️the demand curve for muffins will shift to the left. ⚪️the demand curve for muffins will not shift.

*[Question 6]* 2 pts *Suppose that bagels and muffins are substitutes. If the price of bagels increase we would expect* 🔘*the demand curve for muffins will shift to the right.* ⚪️the demand curve for muffins will shift to the left. ⚪️the demand curve for muffins will not shift.

*[Question 7]* 2 pts *Suppose that consumers and farmers expect the price of wheat will increase next month. The result will be that* ⚪️A. demand for wheat will increase today. ⚪️B. demand for wheat will decrease today. ⚪️C. supply for wheat will decrease today. ⚪️D. Both (A) and (C) are true. ⚪️E. Both (B) and (C) are true.

*[Question 7]* 2 pts *Suppose that consumers and farmers expect the price of wheat will increase next month. The result will be that* ⚪️A. demand for wheat will increase today. ⚪️B. demand for wheat will decrease today. ⚪️C. supply for wheat will decrease today. 🔘*D. Both (A) and (C) are true.* ⚪️E. Both (B) and (C) are true.

*[Question 8]* 2 pts *Which of the following BEST illustrates the law of supply?* ⚪️When leather becomes more expensive, belt producers decrease their supply of belts. ⚪️When there is a technological innovation in the auto industry, car producers increase their supply of cars. ⚪️When ketchup price increases, ketchup firms increased their quantity supplied of ketchup. ⚪️When labor costs increased in the sweater industry, sweater producers decreased their supply of sweaters.

*[Question 8]* 2 pts *Which of the following BEST illustrates the law of supply?* ⚪️When leather becomes more expensive, belt producers decrease their supply of belts. ⚪️When there is a technological innovation in the auto industry, car producers increase their supply of cars. 🔘When ketchup price increases, ketchup firms increased their quantity supplied of ketchup. ⚪️When labor costs increased in the sweater industry, sweater producers decreased their supply of sweaters.

*[Question 9]* 2 pts *Which of the following events would decrease the supply of tomatoes?* ⚪️An increase in the demand for tomatoes. ⚪️An increase in the wages of workers harvesting tomatoes. ⚪️A decrease in the cost of fertilizers for tomato plants. ⚪️An increase in the price of tomatoes.

*[Question 9]* 2 pts *Which of the following events would decrease the supply of tomatoes?* ⚪️An increase in the demand for tomatoes. 🔘*An increase in the wages of workers harvesting tomatoes.* ⚪️A decrease in the cost of fertilizers for tomato plants. ⚪️An increase in the price of tomatoes.

*[Question 10]* 2 pts *The price of oranges has risen dramatically. Which of the following is likely to happen?* ⚪️A. the quantity of oranges supplied will increase ⚪️B. The supply curve of oranges will shift downward (to the right) ⚪️C. the supply curve of oranges will shift upward (to the left) ⚪️D. Both (A) and (B) are true ⚪️E. Both (A) and (C) are true

*[Question 10]* 2 pts *The price of oranges has risen dramatically. Which of the following is likely to happen?* 🔘*A. the quantity of oranges supplied will increase* ⚪️B. The supply curve of oranges will shift downward (to the right) ⚪️C. the supply curve of oranges will shift upward (to the left) ⚪️D. Both (A) and (B) are true ⚪️E. Both (A) and (C) are true