Microeconomics Quiz 1

The demand curve diagram has:

"price" on the vertical axis, "quantity demanded per time period" on the horizontal axis, and a downward sloping demand curve

Which of the following will definitely occur when there is a simultaneous increase in demand and an increase in supply?

An increase in equilibrium quantity

Bacon is used to produce bacon cheeseburgers, and the price of bacon decreases. In the market for bacon cheeseburgers you would expect that

the supply of bacon cheeseburgers would increase and the price of bacon cheeseburgers would decrease.

SCENARIO 3.2: Mustard and mayonnaise are substitutes. Mustard and relish are complements. Mustard is a normal good. During the summer, about 50% of all mustard was recalled by manufacturers and removed from store shelves. Refer to Scenario 3.2. As a result of the recall, you would expect that:

the supply of mustard would decrease, the price of mustard would increase, and the quantity demanded of mustard would decrease

A movement along the demand curve for toothpaste would be caused by:

A change in the price of toothpaste.

Which of the following would shift the supply curve for MP3 players to the right?

A decrease in the price of an input used to produce MP3 players

What is the difference between an "increase in demand" and an "increase in quantity demanded"?

An "increase in demand" is represented by a rightward shift of the demand curve while an "increase in quantity demanded" is represented by a movement along a given demand curve.

What is the difference between an "increase in supply" and an "increase in quantity supplied"?

An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" refers to a movement along a given supply curve in response to an increase in price

Which of the following will not shift the demand curve for a good?

An increase in the price of the good.

The price of circuit boards used in the manufacturing of LCD televisions has fallen. This will lead to ________ LCD televisions:

An increase in the supply of

Which of the following would cause a decrease in the supply of milk?

An increase the price of a product that producers sell instead of milk

The law of demand implies, holding everything else constant, that:

As the price of bagels increases, the quantity of bagels demanded will decrease

If, in response to an increase in the price of chocolate, the quantity demanded of chocolate decreases economists would describe this as:

Decrease in quantity demanded

Suppose that when the price of hamburgers decreases, the Ruiz family increase their purchases of ketchup:

Hamburgers and ketchup are complements

If the market for blue tooth headsets is unregulated and is presently characterized by excess demand, you can accurately predict that price will

Increase, the quantity demanded will fall, and the quantity supplied will rise

A supply schedule:

Is a table that shows the relationship between the price of a product and the quantity of the product supplied

When there is a surplus of a product in an unregulated market, there is a tendency for:

Price to fall

A demand curve shows the relationship between:

The price of a product and the quantity of the product demanded.

One would speak of a movement along a supply curve for a good, rather than a change in supply, if:

The price of the good changes

An electronics manufacturer can produce either MP3 players or cell phones. As the result of a decrease in the price of cell phones, the firm produces more MP3 players and fewer cell phones. An economist would explain this by saying

There has been a decrease in the quantity supplied of cell phones and an increase in the supply of MP3 players.

If in the market for apples the supply has decreased then:

WRONG ANSWER There has been a movement upwards along the supply curve for apples

Which of the following will definitely occur when there is a decrease in demand for and an increase in supply of potato chips?

WRONG ANSWER an increase in equilibrium price

SCENARIO 3.2: Mustard and mayonnaise are substitutes. Mustard and relish are complements. Mustard is a normal good. During the summer, about 50% of all mustard was recalled by manufacturers and removed from store shelves. Refer to Scenario 3.2. If at the same time of the mustard recall, consumer income also decreased. Then, ceteris paribus, in the market for mustard this would have caused:

WRONG ANSWER: the equilibrium price to increase and the equilibrium quantity to decrease.

The phrase "demand has increased" means that:

a demand curve has shifted to the right

SCENARIO 3.2: Mustard and mayonnaise are substitutes. Mustard and relish are complements. Mustard is a normal good. During the summer, about 50% of all mustard was recalled by manufacturers and removed from store shelves. Refer to Scenario 3.2. The mustard recall would have caused the equilibrium price of mayonnaise to ________ and the equilibrium quantity of mayonnaise to ________.

increase; increase