module 4 study
Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium price of beef will stay the same. fall. perhaps rise, fall, or stay the same, but more information is needed to determine which it does. rise.
perhaps rise, fall, or stay the same, but more information is needed to determine which it does.
Qd = 1000 - 2P and Qs = 0.5P + 250 what is the equilibrium price in this market? equilibrium quantity
300 400
Why are city gun buyback programs unlikely to work? Because the supply of guns in a city is very elastic, so more guns are brought in to meet the increase in demand from the gun buyback program. Because the supply of guns in a city is very inelastic, so the buyback program does not remove many guns from the street. Because the buyback program does not increase demand by enough to remove guns from the street. Because criminals do not behave rationally and so do not respond to incentives.
Because the supply of guns in a city is very elastic, so more guns are brought in to meet the increase in demand from the gun buyback program.
A growing number of utility companies are using drones for site inspections. What is the effect of these changes on the equilibrium price and quantity, in the market for drones? The equilibrium price rises and the change in equilibrium quantity is ambiguous. The equilibrium price falls, and the equilibrium quantity rises. Both the equilibrium price and the equilibrium quantity will rise. The equilibrium price rises and the equilibrium quantity falls.
Both the equilibrium price and the equilibrium quantity will rise.
Every spring, motorists do more driving than during the winter months. Every spring, the price of gasoline increases and the motorists buy more gasoline. This experience suggests that the "law of supply" does not always hold for necessities like gasoline None of these answers are correct. "law of demand" does not always hold for necessities like gasoline. laws of supply and demand are both contradicted for gasoline, though only during the spring driving season.
None of these answers are correct.
The price of turkeys goes down at Thanksgiving even though demand increases because: Suppliers time the production of turkeys to match up with Thanksgiving, ensuring that higher demand is met. Supply increases by relatively more than demand because frozen turkeys are brought to market. Consumers don't actually like turkey and grocery stores know they won't buy it at higher prices. Suppliers are generous and want everyone to enjoy turkeys.
Supply increases by relatively more than demand because frozen turkeys are brought to market.
A new study discovers the health benefits of eating fish regularly. At the same time, some consumers decide to become vegetarians. What is the effect of these events on the equilibrium price and quantity in the fish market? The equilibrium price falls, and the equilibrium quantity rises. The equilibrium price falls, and the change in the equilibrium quantity is ambiguous. The equilibrium price rises, and the equilibrium quantity falls. The change in both the equilibrium price and quantity is ambiguous.
The change in both the equilibrium price and quantity is ambiguous.
What happens to the equilibrium price and quantity when demand increases and at the same time supply decreases, but the demand shift is smaller than the supply shift? Both the equilibrium price and the equilibrium quantity will fall. The equilibrium price falls, and the equilibrium quantity rises. Both the equilibrium price and the equilibrium quantity will rise. The equilibrium price rises, and the equilibrium quantity falls
The equilibrium price rises, and the equilibrium quantity falls
What happens to the equilibrium price and equilibrium quantity when demand and supply decrease simultaneously, but the relative size of the shifts are not known? The equilibrium price rises, and the change in equilibrium quantity is ambiguous. The equilibrium price falls, and the change in equilibrium quantity is ambiguous. The equilibrium quantity falls, and the change in equilibrium price is ambiguous. The equilibrium quantity rises, and the change in equilibrium price is ambiguous.
The equilibrium quantity falls, and the change in equilibrium price is ambiguous.
Graphically, shortages will always occur: when the quantity supplied exceeds the quantity demanded. at the equilibrium price. at prices above the equilibrium price. at prices below the equilibrium price.
at prices below the equilibrium price.
A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in a decrease in the equilibrium quantity of soft drinks and no change in the equilibrium price. an increase in the equilibrium quantity of soft drinks; the equilibrium price may increase or decrease. a decrease in the equilibrium price of soft drinks and no change in the equilibrium quantity. a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease.
a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease.
Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase? an increase in the price of flour an increase in the price of rye bread, a substitute for white bread a decrease in the price of flour an increase in the price of butter, a complement for white bread
a decrease in the price of flour
If the supply and demand curves intersect at a price of $25, then any price below that price would result in: a shortage. a surplus. equilibrium at a price of $60. an increase in demand.
a shortage
If the supply and demand curves intersect at a price of $60, then any price above that would result in: a shortage. a surplus. equilibrium at a price of $60. an increase in supply.
a surplus
If the price is above the equilibrium price, then: the good will not be sold. the price must rise further to reach the new market equilibrium. a surplus exists. a shortage exists.
a surplus exists
Which of the following would cause an increase in the equilibrium price and an increase in the equilibrium quantity of watermelons? an increase in demand and an increase in supply an increase in supply and an increase in demand greater than the increase in supply a decrease in demand and an increase in supply an increase in supply
an increase in supply and an increase in demand greater than the increase in supply
If a demand curve is downward sloping, a decrease in supply with no change in demand will lead to a(n) _____ in the equilibrium quantity and a(n) _____ in the equilibrium price. increase; increase increase; decrease decrease; increase decrease; decrease
decrease; increase
An article in the Wall Street Journal in early 2001 noted two developments in the market for laser eye surgery. The first development concerned side effects from the surgery, including blurred vision. The second development was that the companies renting eye-surgery machinery to doctors had reduced their charges. In the market for laser eye surgeries, these two developments decreased demand and decreased supply, resulting in a decrease in the equilibrium quantity and an increase in the equilibrium price of laser eye surgeries. decreased demand and increased supply resulting in an increase in both the equilibrium quantity and the equilibrium price of laser eye surgeries. decreased demand and increased supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of laser eye surgeries. decreased demand and increased supply, resulting in a decrease in both the equilibrium price and the equilibrium quantity of laser eye surgeries.
decreased demand and increased supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of laser eye surgeries.
When a government fines and/or imprisons persons convicted of using illegal drugs, the government is attempting to decrease the illegal drug trade by shifting the ________ curve for illegal drugs ________. demand; rightward demand; leftward supply; leftward supply; rightward
demand; leftward
The price that results when quantity demanded equals quantity supplied is most correctly called the non-surplus price. stable price. equitable price. equilibrium price.
equilibrium price
As a result of technological innovation, automated water pumps are being installed on the farms of Kenyan tomato farmers. As a result of the increased use of automated water pumps, the equilibrium price of tomatoes will: fall, due to a rise in supply. rise, due to a fall in supply. fall, due to a fall in demand. rise, due to a rise in demand
fall, due to a rise in supply
If penalties are imposed only on the buyers of illegal drugs, the equilibrium price of illegal drugs will ________ and the equilibrium quantity will ________. rise; decrease fall; increase fall; decrease rise; increase
fall; decrease
Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon? a decrease in demand and an increase in supply a decrease in demand and a decrease in supply an increase in supply and an increase in demand greater than the increase in supply an increase in supply
increase in supply
If the demand curve is downward sloping, an increase in supply with no change in demand will lead to a(n) _____ in the equilibrium quantity and a(n) _____ in the equilibrium price. increase; increase increase; decrease decrease; increase decrease; decrease
increase; decrease
If good growing conditions increase the supply of strawberries and hot weather increases the demand for strawberries, the quantity of strawberries bought increases and the price might rise, fall or not change. increases and the price rises. doesn't change and the price falls. doesn't change and the price rises.
increases and the price might rise, fall or not change.
Making the buying and selling of a good illegal shifts the demand curve ________ and shifts the supply curve ________. rightward; rightward leftward; leftward rightward; leftward leftward; rightward
leftward; leftward
Why aren't imports of roses from South America and Africa high year-round instead of just around Valentine's Day? Select all that apply. None of these apply. The spike in demand makes it profitable for producers with higher costs (like transportation) to enter the market. The government limits imported flowers except around Valentine's and Mothers' Day. Flower production in the US is particularly low in February, so US-based supply is shifted leftward that month because of the climate.
options 1 and 4
An increase in demand combined with no change in supply decreases demand because the supply curve does not shift. raises the equilibrium price. lowers the equilibrium price. results in only a movement rightward along the demand curve.
raises the equilibrium price.
Vacations by plane are a normal good and people's incomes rise. At the same time, the price of jet fuel rises. The equilibrium price of a vacation flight ________ and the equilibrium quantity of vacation flights ________. falls; decreases rises; might increase, decrease, or not change might rise, fall, or not change; increases rises; increases
rises; might increase, decrease, or not change
In 2017, Kenya banned the use of disposable plastic shopping bags due to concern over plastics pollution. Which graph depicts what happened in the country's market for reusable cloth bags?
supply stayed same and demand shifted to right
In 2004, hurricanes destroyed a large portion of Florida's orange and grapefruit crops. In the market for citrus fruit the supply curve shifted to the left resulting in an increase in the equilibrium price. the demand curve shifted to the right resulting in an increase in the equilibrium price. the supply curve shifted to the right resulting in an increase in the equilibrium price. the demand curve shifted to the left resulting in a decrease in the equilibrium price.
the supply curve shifted to the left resulting in an increase in the equilibrium price.
A surplus exists anytime the market is out of equilibrium. when quantity demanded exceeds quantity supplied. at the market clearing price. when quantity supplied exceeds quantity demanded.
when quantity supplied exceeds quantity demanded