Which of the following events in the market for cell phones illustrates the law of demand? ECO
If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. This is known as ___________.
shortage (on the supply side).
If the price of corn in the market increases, which of the graph options below best describes what happens in the market for milk? Hint: Corn is feed for the cows, which produce milk.
A graph showing only a shift of Supply to the left.
Using the theoretical concepts in the Supply and Demand model, select which of the following statements describes a change in the quantity supplied and which describes a change in supply? I Farms are selling less chicken because the price of turkey has increased. II Farms are selling less chicken because the price of chicken has fallen. III Farms are selling more chicken because the price of chicken has risen. IV Farms are selling more chicken because the cost of chicken feed has fallen.
I and IV are changes in supply and II and III are changes in the quantity supplied.
Using the theoretical concepts in the Supply and Demand model select which of the following statements about the market for chicken describes a change in the quantity demanded and which describes a change in demand? I People are buying less chicken because the price of beef has fallen. II People are buying less chicken because the price of chicken has increased. III People are buying more chicken because the price of chicken has fallen. IV The cost of chicken feed has increased.
I is a change in demand and II and III are changes in the quantity demanded. Response Feedback: As described in the model, a change in demand occurs when factors other than price (of chicken in this case) change. A change in the quantity demanded occurs when the price (of chicken in this case) change.
__________ are enacted when discontented sellers, feeling that prices are too low, appeal to legislators to keep prices from falling.
Price floors
Consider the U.S. market for Caribbean cruises. Suppose crime rates increase in Caribbean ports. Explain the effect of this event on the quantity of Caribbean cruises demanded and on the demand for Caribbean cruises.
The demand for Caribbean cruises decreases.
Consider the market for car washes. Suppose that due to a severe recession people's income has fallen drastically. Using the theoretical concepts in the Supply and Demand model, explain the effect of this event on the quantity of car washes demanded and on the demand for car washes.
The demand for car washes decreases.
Suppose using desktop computers becomes less popular. Using the theoretical concepts in the Supply and Demand model explain the effect of this event on the quantity of laptops demanded and on the demand for laptops.
The demand for desktop computers decreases. (wrong) Response Feedback: A change in the quantity demanded is a change in the quantity of a good that people plan to buy that results from a change in the price of the good with all other influences on buying plans remaining the same. A change in demand is a change in the quantity that people plan to buy when any influence on buying plans other than the price of the good changes. Tastes or preferences, as economists call them, influence demand. When using desktop computers becomes less popular the demand for desktop computers decreases, and given that laptops are very close substitutes to desktop computers, people will demand more laptops, all else equal, which will increase the demand for laptops, but NOT the quantity demanded for laptops, which would have occurred if the price of laptops went down, information which is not provided in this question, and thus we cannot assume.
Consider the market for desktop computers. Suppose using desktop computers becomes less popular. Using the theoretical concepts in the Supply and Demand model, explain the effect of this event on the quantity of desktop computers demanded and on the demand for desktop computers.
The demand for desktop computers decreases. Response Feedback: A change in the quantity demanded is a change in the quantity of a good that people plan to buy that results from a change in the price of the good with all other influences on buying plans remaining the same. A change in demand is a change in the quantity that people plan to buy when any influence on buying plans other than the price of the good changes. Tastes or preferences, as economists call them influence demand. When using desktop computers becomes less popular the demand for desktop computers decreases.
Which of the following events in the market for cell phones illustrates the law of demand?
The price of a cell phone falls.
Draw a supply and demand graph which illustrates the market for tea. The initial equilibrium is at point A. After one or more changes, the new equilibrium moves to point B, which is located to the right of point A and has the same corresponding equilibrium price than point A. You predict that the market for tea was influenced by _______.
a rise in household income and an increase in the number of plantations.
Any given demand or supply curve is based on the ceteris paribus assumption that __________.
all else is held equal
If the demand for a good or service increases and the supply for the same good or service decreases, and we know that the shift in demand is greater than the shift in supply, then the equilibrium quantity ______ and the equilibrium price ______. Hint: You are encouraged to draw one graph to help you analyze this scenario before concluding.
increases; increases
If both the demand for and the supply of a good or service increase, but we do not have information regarding which shift is greater than the other, then the equilibrium quantity ______ and the equilibrium price ______. Hint: You are encouraged to draw one or more graphs to help you analyze all the possible scenarios, before making any conclusions.
increases; might rise, fall, or not change
A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of:
the supply curve.
