HW Ch.4
Which of the following is likely to lead to a rightward shift in the supply curve of cotton?
An increase in labor productivity due to training programs
Which of the following is not one of the four major factors that shifts the supply curve when it changes?
Anything other than these:1. Prices of inputs used to produce a good2. Technology used to produce a good3. Number and scale of sellers4. Sellers' beliefs about the future
the price of anti-venom serum, sold to those with snake bites, increased from $45 to $52, but consumption has still remained the samein this situation, the Law demand The demand curve for anti - venom serum is a drought in the grape regions of the country increases the cost of producing jelling
Does not hold, since the product sold is required for survival, so increasing the price did not affect consumption Near vertical, since even if the price rises bite victims will be willing to buy the same quantity Holds, since the demand curves for both jelly and peanut butter are downward-sloping; it is their shifts that are determing the impact on the quantity consumed
If the demand for gem−quality diamonds decreases AND the supply of gem−quality diamonds decreases, what can be said about equilibrium price and quantity in this market?
Equilibrium quantity will fall, but the change in equilibrium price is uncertain.
Which would be the correct sequence of events in the speedboat industry if waterway access was improved and, at the same time, a lighter polymer became available that increased production efficiency?
Supply would shift right, demand would shift right, equilibrium price would be indeterminable, and equilibrium quantity would increase.
All else being equal, an increase in the price of Nike Air Jordan XXXI Fly Low shoes will cause an ________.
Increase in quantity supplied
The development of genetically modified soybean seeds such as Roundup Ready seeds lowered tillage costs for soybean growers. How will this technological advance affect the supply of soybeans?
Increase in supply
If the current market price of wheat in the United States is $6 per bushel and the federal government sets the maximum price of wheat at $4 per bushel, what happens to the market price and quantity of wheat in the U.S. wheat market?
The market price of wheat falls and the quantity traded falls.
The competitive equilibrium price equates
quantity demanded and the quantity supplied. When prices are not free to fluctuate, markets fail to equate quantity demanded and quality supplied. A group of economic agents who are trading a good or service, and the rules and arrangements for trading.
Given the supply and demand curves on the right, when the price of the good is $20, we say that the market is in _______________. At this price, we know that the quantity supplied is ______________ the quantity demanded.
competitive equilibrium; equal to
If the government sets a minimum wage for seasonal workers, then the supply curve for sparkling wine would ______
decrease (shift left)
If widespread unemployment leads to a drop in incomes, then the demand for the Toyota Rav4 SUV would __________.
decrease (shift left)
Read the story to the right, and then answer the following questions: Based on what happened at the Richmond event, it is apparent that at a price of $50, the quantity _________ of laptops exceeded the quantity _________. This resulted in an excess _________ for laptops. Which of the following ways of distributing the laptops would be more efficient? (Check all that apply.)
demanded; supplied; demand Using flexible prices, so those who value the laptop more would pay more for it. This is the correct answer. AND Using a random lottery to decide who gets the laptops.
If the only change in the market was that the price increased to $30, then we know that the quantity supplied will be ________________ the quantity demanded, resulting in ________________, which is also known as _____________
greater than; an excess supply; a surplus
For a trade to take place, a buyer's willingness to pay must be ____________.
higher than the seller's willingness to accept. AND equal to the seller's willingness to accept.
As a firm produces more of a good, the cost of producing each additional unit ____________ This implies that the marginal cost of producing a good ____________ as you make more of that good.
increases; increases
Suppose instead that the price of the good dropped below the competitive equilibrium price to a price of $15 per unit. If this were to occur, then the quantity supplied would be ______________the quantity demanded, resulting in _______________ , which is also known as ______________
less than; an excess demand; a shortage
Assume that a seller in a perfectly competitive market charges more than the equilibrium price. It is likely that this seller will ________.
lose almost all of his buyers
Suppose a new off-campus university apartment complex could rent its rooms on the open market for $900 a month. If, instead, the university chooses to cap the price of rooms to $500 a month for students, the result would be that ____________. Suppose the university is trying to determine the most efficient way to allocate the rooms such that those who value the rooms the most get them. Which of the following would you suggest as the most efficient?
quantity demanded would exceed the quantity supplied, resulting in a shortage. Auctioning the rooms to the highest bidders.
Consider a market where the demand curve is downward sloping and the supply curve is upward sloping (so they are neither vertical nor horizontal). If the consumers' willingness to pay for the hundredth unit is $7.00 and the seller's willingness to accept for the hundredth unit is $10.00, then the equilibrium ________.
quantity is less than 100 units
Coffee and tea are likely __________ because an increase in the price of coffee ________ the demand for tea
substitutes, increases
The supply curve represents ___________.
the minimum price sellers are willing to accept to sell an extra unit of a good.
Which of the following is not one of the five major factors that shifts the demand curve when it changes?
the price of the good itself
The lowest price that a seller is willing to receive to sell an extra unit of a good is called _____________ , while the highest price that a buyer is willing to pay for an extra unit of a good is called _____________
willingness to accept; willing to pay
In 2007, an unseasonably dry spring led to a sharp decline in the quantity harvested of black morels, a wild mushroom found throughout the upper Midwest. Due to the scant harvest, the price of black morels rose from $9 per pound to nearly $45 per pound. In 2008, slightly above−normal rainfall levels led to a large black morel harvest. Assuming that the demand for black morels did not change from 2007 to 2008, we would expect the 2008 black morel supply to ________ and the equilibrium price of black morels to ________.
increase; fall
