LC Ch 2: Supply and Demand

The inverse supply curve for M&B chardonnay (wine) is P = 200 + 0.2QS. Supply will be elastic when the quantity is all of the following EXCEPT:

All of the answers are correct. 2,000. 1,000. 500.

The inverse demand curve for M&B chardonnay (wine) is P = 200 − 0.1QD. The quantity demanded at which demand is unit elastic is:

1,000

A tomato farmer switched to a cheaper fertilizer. This change to his _____ may result in a lower selling price.

Costs of production

Apples and Opals Boutique has stocked a large number of feather fans. Very few of the fans sell. This is an example of:

Excess Supply

The price of technology (computers, cell phones, etc.) has fallen drastically over the last two decades. As a result, there has been a(n):

Increase in quantity demanded

Rivka lost her job as an executive assistant and was forced to take a job at a grocery store at a lower wage. As a result, Rivka will likely buy more:

Inferior goods

How do you draw a perfectly elastic demand (or supply) curve?

It is completely horizontal at price P

If the equation of a demand curve is Q = 600 − 20P, then the inverse demand curve is:

P = 30 - 0.05Q

A store sells three different brands of paper towels. This is an example of:

Substitutes

If an increase in the price of orange juice causes demand for apple juice to increase, we call orange juice and apple juice _____.

Substitutes

Two exercise centers are opened on the same block. Fierce competition ensues, and membership prices are very competitive. Membership at these exercise centers is an example of:

Substitutes

Which of the following factors DOES NOT directly influence supply in product markets?

a. input prices b. sellers' outside options c. the number of buyers d. price

Using the strictest definition of a market, which of the following is NOT part of the definition?

a. the specific product being bought and sold b. a particular location c. a point in time d. the names of the buyers and sellers

A shoe company decreases their prices after finding a way to make production less expensive. If nothing else changes, this will cause a(n) _____ in _____.

an increase; quantity demanded

In Tinyburg, a town with 1000 inhabitants, most residents work for a car manufacturing company in one capacity or another. Increased automation causes the company to cut 100 jobs. This results in a(n) _____ in the average income, which is likely to cause a(n) _____ in demand/the consumption of normal goods.

decrease; decrease

A normal good is a good:

for which consumption rises as income rises

After receiving a considerable raise, 10%, Mack doubled the number of airplane trips that he takes and bought a small yacht. The cost of upkeep for the yacht was so high that Mack was soon forced to put it up for sale. Mack's yacht and airplane travel is a(n):

luxury good

Increased interest in running causes an increase in the purchase of running shoes. Many of those buying running shoes also buy socks and running shorts. The socks and running shorts are _____ to the running shoes. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices

Complements

How do you draw a perfectly inelastic demand curve?

It is vertical at point Q

The inverse supply curve for M&B chardonnay (wine) is P = 200 + 0.2QS. Supply will be inelastic when the quantity is:

Supply is elastic at every quantity