ECON 131- HW2

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

C

20) Market equilibrium occurs when 20) A) opposing forces pull demand and supply apart. B) the quantity demanded equals the quantity supplied. C) demand and supply change so that are equal at all possible prices. D) all markets become equal. E) demand and supply move in opposite direction.

B

3) The price of cotton clothing falls. As a result, A) the quantity demanded of cotton clothing decreases. B) the quantity demanded of cotton clothing increases. C) both the demand for cotton clothing increases and the quantity demand of cotton clothing increases. D) the demand for cotton clothing increases. E) the demand for cotton clothing decreases.

B

4) Demand curves slope ________ because as the price increases and other things remain the same, the quantity demanded ________. A) upward; decreases B) downward; decreases C) upward; increases D) downward; does not change E) downward; increases

B

8) Water bottlers announce that next month the price of bottled water will rise by 25 percent. Which of the following occurs immediately? A) The quantity of bottled water demanded decreases. B) The demand for bottled water increases. C) The quantity of bottled water demanded increases. D) The demand for bottled water decreases. E) None of the above answers is correct because it is the supply that immediately changes, not the demand.

B

7) If macaroni and cheese is an inferior good, then a decrease in income results in A) an increase in the supply of macaroni and cheese. B) an increase in the demand for macaroni and cheese. C) a decrease in the supply of macaroni and cheese. D) a decrease in the demand for macaroni and cheese. E) Both answers A and D are correct.

B.

17) 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) a decrease in income if pizza is a normal good. D) an increase in the number of producers of pizza. E) a decrease in the cost of the tomato sauce used to produce pizza.

A

2) Your college requires that starting this year, every business student must bring a laptop to school. 2) This requirement A) increases the demand for laptops. B) increases the quantity demanded of laptops. C) decreases the quantity demanded of laptops. D) has no effect on the demand for laptops because it affects only the supply of laptops. E) increases both the demand for and the supply of laptops.

A

6) Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the A) demand for Apple computers decreases. B) supply of Dell computers increases. C) demand for Dell computers decreases. D) demand for Dell computers increases. E) demand for A pple computers increases.

A

11) 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

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

D

5) The market demand curve for mangos is A) upward sloping because rich people can afford more mangos than poor people can buy. B) the same as the demand curve of one buyer. C) the vertical sum of the individual demand curves of all the buyers. D) the horizontal sum of the individual demand curves of all the buyers. E) the horizontal average of the individual demand curves of all the buyers.

D

10) In the above figure, the shift in the demand curve from D to D1 can be the result of A) a change in quantity demanded. B) an increase in the price of pizza. C) an increase in the price of soda, a complement to pizza. D) a decrease in income if pizza is a normal good. E) an increase in the price of a sub sandwich, a substitute for pizza.

E

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

E

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

E

19) In the above figure, an increase in productivity 19) A) shifts the supply curve from S to S1. B) results in a movement from point a to point b. C) results in a movement from point b to point a. D) has no effect. E) shifts the supply curve from S to S2.

E

1) An increase in the quantity demanded is shown as a A) movement along the demand curve. B) rightward shift of the demand curve. C) leftward shift of the demand curve. D) movement toward the demand curve. E) both a movement along the demand curve and a shift of the demand curve.

A)

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

B

9) In the above figure, the movement from point a to point b reflects A) an increase in the price of the tomato sauce used to produce pizza. B) a decrease in the number of firms producing pizza. C) a decrease in the price of pizza. D) an increase in the demand for pizza. E) an increase in the number of people who eat pizza.

C

14) 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) no change in the current or future supply of wheat. C) a decrease in the future supply of wheat. D) a decrease in the current supply of wheat. E) an increase in the current quantity supplied of wheat.

D) a decrease in the current supply of wheat.