ECON 210 Chapter 3 Q&A Supply and Demand

What is wrong with the following statement? "As the price of a good falls, the supply of that good falls, ceteris paribus."

"Supply" should be "quantity supplied."

How might the price of corn affect the supply of wheat, assuming that farmers can plant and harvest both corn and wheat? Check all that apply.

As the price of corn rises, the supply of wheat will fall. As the price of corn falls, the supply of wheat will rise.

What does the law of increasing opportunity costs have to do with an upward-sloping supply curve?

If opportunity costs weren't increasing, the supply curve wouldn't slope upward.

_______________ is a number of units supplied at a particular price, where as ______________ refers to a relationship between various prices and various quantities supplied.

Quantity supplied , Supply

Suppose the demand curve for a good is downward sloping and the supply curve is upward sloping. Now suppose demand rises. Producers' surplus will_______?

Rise

Suppose that the purchase and sale of marijuana is decriminalized. If the demand for marijuana increases by more than the supply of marijuana increases, it follows that the price of marijuana will _________ , and the quantity of marijuana bought and sold will_______.

Rise , Rise

Store X is running a sale on shirts on Friday through Sunday. A sale on shirts allows you to see that the law of demand holds; that is, when the price of shirts falls, the quantity demanded of shirts_________

Rises

True or False: Consumers' surplus must equal producers' surplus at the equilibrium price.

False

True or False: At equilibrium in a market, the maximum price buyers would be willing to pay for the good is equal to the minimum price sellers need to receive before they are willing to sell the good.

True

______________Correct refers to the willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period, whereas _______________ Correct refers to a specific number of units buyers want to buy at a specific price during a specific time period.

Demand , quantity demanded

Why might a movie theater charge a lower admission price for the first show on weekday afternoons than it does for a weeknight or weekend show?

Demand is lower for the weekday afternoon showing of the movie than for the weeknight or weekend showing.

Identify the error in the following statement: "Demand refers to the willingness of buyers to purchase different quantities of a good at different prices during a specific time period."

Demand refers to both the willingness and ability of buyers, not just their willingness.

The price of a bushel of wheat, which was $3.00 last month, is $3.70 today. True or False: The demand curve for wheat must have shifted rightward between last month and today.

False

True or False: As the price of oranges rises, the demand for oranges falls, ceteris paribus.

False. It should be "quantity demanded" instead of "demand."

Identify the error in the following statement: "The price of T-shirts keeps rising, and people keep buying more and more. T-shirts must have an upward-sloping demand curve."

If the demand for T-shirts keeps increasing, the price will rise, and more shirts will be bought at the higher price than the lower price (assuming the supply curve of T-shirts is upward sloping).