Macroeconomics Chapter 4

consider the market for coffee makers if coffee becomes cheaper consumption of coffee is found to reduce heart disease the wages of workers in manufacturing plants increases and the price of plastic increases the equilibrium price will rise fall stay the same could rise fall or remain unchanged

rise coffee is a complement to coffee makers so when coffee beans become cheaper demand for coffee makers increases. demand also increase in response to a study showing health benefits from drinking coffee. supply decreases when wages of workers making coffee makers increases and when the price of plastic an input into coffee makers increases. when demand increases and supply decreases equilibrium price will rise

The market for haircuts is a supply driven market demand driven market competitive market monopoly market

competitive market market for haircuts has many buyers and many sellers so that each has a negligible impact on the market price

Which of the following events must cause equilibrium price to fall demand increases and supply decreases demand and supply both decrease demand decreases and supply increases demand and supply both increase

demand decreases and supply increases

A decrease in quantity demanded results in a movement downward and to the right along a demand curve results in a movement upward and to the left along a demand curve shifts the demand curve to the left shifts the demand curve to the right

results in a movement upward and to the left along a demand curve

An increase in the # of orange growers causes the market supply curve for oranges to shift to the left the market supply curve for oranges to shift to the right

The market supply curve for oranges to shift to the right an increase in the number of sellers causes an increase in the market supply for that good. A shift to the right is an increase in supply.

If generic medicine is an inferior good then an increase in a consumer's income will cause the demand curve for the brand name equivalent to shift to the left the price of the brand name equivalent will cause the demand curve for the generic medicine to shift to the left the price will cause the demand curve for generic medicine to shift to the left a consumer's income will cause the demand curve for generic medicine to shift to the left

a consumer's income will cause the demand curve for generic medicine to shift to the left when income increases the demand for inferior goods decreases and the demand for normal goods increases. A decrease in demand is a shift to the left

Which of the following would most likely serve as an example of a monopoly a grocery store a gas station a t-shirt retailer an electricity provider

an electricity provider

To obtain the market demand curve for a product sum the individual demand curves vertically diagonally horizontally and then average them

horizontally

If Alice expects to earn a higher income next month she may choose to move downward and to the right along her current demand curve for clothes shift her demand for clothes to the right buy fewer clothes this month shift her demand for saving to the right

Shift her demand for clothes to the right expectations about the future affect consumers demands for service today if alice expects to earn a higher income next month she may choose to save less now and spend more of her current income

which of the following changes would not shift the demand curve for gas? The price of gas-powered cars increases due to higher steel prices the price of gas decreases due to increased production Senior citizens incomes increase due to a change in social security benefits The price of gas is expected to increase in near future due to decreased production

The price of gas decreases due to decreased production a change in the price of a good causes a movement along the demand curve rather than a shift of the demand curve

the supply curve for yoga mats shifts when the price of yoga mats changes a determinant of the supply of yoga mats other than the price of yoga mats changes the demand for yoga mats shifts yoga becomes popular

a determinant of the supply of yoga mats other than the price of yoga mats changes

Which of the following might cause the demand curve for an inferior good to shift to the left a decrease in income an increase in the price of a substitute an increase in the price of a complement none of the above is correct

an increase in the price of a complement

If consumers often purchase muffins to eat while they drink their lattes what would happen to the equilibrium price and quantity of lattes if the price of muffins rises both the equilibrium price and quantity would increase both the equilibrium price and quantity would decrease the equilibrium price would increase and the equilibrium quantity would decrease the equilibrium price would decrease and the equilibrium quantity would increase

both the equilibrium price and quantity would decrease

If scientists discover that steamed milk which is used to make lattes prevents heart attacks what would happen to the equilibrium price and quantity of lattes both the equilibrium price and quantity would increase both the equilibrium price and quantity would decrease the equilibrium price would increase and the equilibrium quantity would decrease the equilibrium price would decrease and the equilibrium quantity would increase

both the equilibrium price and quantity would increase

Suppose the income of buyers in a market for an inferior good decreases and tech advance occurs also what would we expect to happen in the market equilibrium price would decrease but the impact on equilibrium quantity would be ambiguous equilibrium quantity would increase but the impact on equilibrium price would be ambiguous equilibrium quantity would decrease but the impact on equilibrium price would be ambiguous none of the above is correct

equilibrium quantity would increase but the impact on equilibrium price would be ambiguous

which of the following is most likely to be a perfectly competitive market wheat soft drinks jeans electricity

in perfectly competitive markets the goods offered for sale are all exactly the same and the buyer and sellers are so numerous that no single buyer or seller has any influence over the market price wheat

a movement upward and to the right along the supply curve for mobile phones is caused by a improvement in technology used to make mobile phones increase in the wages of workers who assemble mobile phones increase in the price of mobile phones decrease in the price of mobile phones

increase in the price of mobile phones

An increase in quantity demanded is different from shifting the demand curve to the right because an increase in quantity demanded is caused by a change in nonprice determinant of demand while a shift to the right is caused by a price increase is caused by a price increase while a shift to the right is caused by a change in a nonprice determinant of demand is caused by a price decrease while a shift to the right is caused by a change in a nonprice determinant of demand is caused by a change in a nonprice determinant of demand while a shift to the right is caused by a price decrease

is caused by a price decrease while a shift to the right is caused by a change in a nonprice determinant of demand according to the law of demand other things equal the quantity demanded of a good increases when the price of the good decreases the demand curve shifts in response to a change in a nonprice determinant of demand

an increase in quantity supplied is different from shifting the supply curve to the right because an increase in quantity supplied is caused by a price decrease while a shift to the right is caused by a change in a nonprice determinant in supply is caused by a price increase while a shift to the right is caused by a change in a nonprice determinant of supply is caused by a change in a nonprice determinant of supply while a shift to the right is caused by a price decrease is caused by a change in a nonprice determinant of supply while a shift to the right is caused by a price increase

is caused by a price increase while a shift to the right is caused by a change in a nonprice determinant of supply

What will happen to the equilibrium price and quantity of iPhones if the price of other smart phones falls, Apple develops new tech to produce iPhones, wireless contracts become more expensive and Apple expects the price of iPhones to decrease in the near future price will fall and the effect on quantity is ambiguous price will rise and the effect on quantity is ambiguous quantity will fall and the effect on price is ambiguous quantity will rise and the effect on price is ambiguous

price will fall and the effect on quantity is ambiguous

cotton is an important input in the production of t shirts if the price of cotton increases then we would expect the supply of t shirts to be unaffected t-shirts to decrease t-shirts to increase cotton to increase

t-shirts to decrease

Cookies are normal goods. What will happen to the equilibrium price and quantity of cookies if the price of sugar falls, the price of milk falls, more firms start producing cookies, and cookie lovers experience an increase in income price will fall, and the effect on quantity is ambiguous price will rise and the effect on quantity is ambiguous quantity will fall and the effect on price is ambiguous quantity will rise and the effect on price is ambiguous

Quantity will rise and the effect on price is ambiguous

When a new study reveals that eating pretzels can increase the likelihood of developing lung cancer, which of the following outcomes is expected both the price and quantity of pretzels will fall both the price and quantity of pretzels will rise the price of pretzels will rise and the quantity will fall the price of pretzels will fall and the quantity will rise

both the price and quantity of pretzels will fall

The US gov announces that next month it will offer tax rebates on new energy efficient windows. As a result of this information, today's demand curve for energy efficient windows will not shift; rather there is a movement upward and to the left along the demand curve for energy efficient windows shifts to the left shifts to the right will not shift; rather, there is a movement downward and to the right along the demand curve for energy efficient windows

shifts to the left when consumers expect a benefit from buying a good in the future their demand for that product today will decrease a shift to the left is a decrease in demand

If wireless phone manufacturers begin using new technology to produce phones we would expect the price of wireless phones to increase quantity supplied of wireless phones to decrease supply curve for wireless phones to shift to the right supply curve for wireless phones to shift to the left

supply curve for wireless phones to shift to the right

What would happen to the equilibrium price and quantity of sunscreen if a new formula developed that makes production cheaper and scientists discovered that sunscreen causes more cancer than sun damage both the equilibrium price and quantity would increase both the equilibrium price and quantity would decrease the equilibrium price would decrease and the effect on equilibrium quantity would be ambiguous the equilibrium quantity would decrease and the effect on equilibrium price would be ambiguous

the equilibrium price would decrease and the effect on equilibrium price would be ambiguous when production becomes cheaper supply increase when scientists discover that sunscreen causes cancer demand decreases when supply increases and demand decreases at the same time the equilibrium price decreases and the equilibrium quantity could increase decrease or stay the same

today's supply curve for corn could shift in response to a change in today's price of corn today's demand for corn the expected future price of corn consumer's income levels

the expected future price of corn

What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties and fewer used textbooks are sold price will rise price will fall price will stay exactly the same the price change will be ambiguous

the price change will be ambiguous

which of the following is not a determinant of demand the price of a resource that is used to produce the good the price of a complementary good the price of the good next month the price of a substitute good

the price of a resource that is used to produce the good

If a drought affects the harvest of coffee beans and coffee and tea are considered substitutes what changes occur in the markets for coffee and tea? the price of coffee rises and the quantity of coffee falls both the price and quantity of tea rise the price of coffee falls and the quantity of coffee rises both the price and quantity of tea fall both the price and quantity of coffee fall the price of tea rises and the quantity of tea falls both the price and quantity of coffee rise the price of tea falls and the quantity of tea rises

the price of coffee rises and the quantity of coffee falls both the price and quantity of tea rise when a drought affects the harvest of coffee beans the supply of coffee decreases resulting in a rise in the price of coffee and a fall in the quantity of coffee because coffee and tea are substitutes when the price of coffee rises the demand for tea increases resulting in a rise in both the price and quantity of tea

which of the following events must cause the equilibrium quantity to rise in the market for burritos a new study shows eating burritos prevents cancer and there are fewer burrito sellers in the market consumer incomes increase assuming burritos are an inferior good and the prices of rice and beans increase a new study shows eating burritos causes cancer and a new labor saving tech is created for making burritos the price of pizza increases and the price of tortillas decreases

the price of pizza increases and the price of tortillas decreases equilibrium quantity in a market must rise when both demand and supply increases

Washing machines and dryers are complementary goods when the tech used to produce washing machines improves what changes occur in the markets for washing machines and dryers the price of washing machines rises and the quantity of washing machines falls; both the price and quantity of dryers fall the price of washing machines falls and the quantity of washing machines rises both the price and quantity of dryers rise both the price and quantity of washing machines fall the price of dryers rises and the quantity of dryers falls both the price and quantity of washing machines rise the price of dryers falls and the quantity of dryers rises

the price of washing machines falls and the quantity of washing machines rises both the price and quantity of dryers rise when tech used to produce washing machines improves, the supply of washing machines increases, resulting in the price falling and the quantity rising bc washing machines and dryers are complements when the price of washing machines decreases consumers demand more dryers resulting in a rise in both the price and quantity of dryers

which of the following events must cause equilibrium price to fall in the market for gas powered snow blowers the price of snow plow services increases and there are fewer producers of gas powered snow blowers shoveling snow is shown to be more environmentally friendly than using a snow blower and producers of gas powered snow blowers expect prices of gas powered snow blowers to increase in the near future the weather forecasters predict a drier than normal winter and producers of gas powered snow blowers find a faster method of production the price of gas decreases and the price of plastic an important input into blowers decreases

the weather forecasters predict a drier than normal winter and producers of gas powered snow blowers find a faster method of production the equilibrium price must fall when demand decreases and supply increases