Ch. 4 quiz

The table gives the demand and supply schedules for milkshakes. What are the equilibrium price and equilibrium quantity in the market for milkshakes​? The equilibrium price is ​___ a milkshake. The equilibrium quantity is _____ milkshakes per day.

5 and 500

What is the effect of an increase in the demand for ramen noodles on the price of ramen noodles and on the quantity of ramen noodles ​supplied? An increase in the demand for ramen noodles brings a​ ______ in the price of ramen noodles and​ ______ in the quantity of ramen noodles supplied. A. rise​; an increase B. rise​; a decrease C. fall​; an increase D. fall​;

A

If both demand and supply​ increase, the equilibrium quantity​ ______ and the equilibrium price​ ______. A. ​increases; might​ rise, fall, or not change B. might​ increase, decrease, or not​ change; might​ rise, fall, or not change C. ​increases; rises D. might​ increase, decrease, or not​ change; rises E. ​increases; falls Graph: The graph shows the demand for and supply of smartphones. Draw a point to show the market equilibrium. Label it 1. Draw a new demand curve that shows the effect in this market when the price of a smartphone app falls. Label it D1. Draw a new supply curve to show what happens in this market if a technological advance cuts the cost of producing smartphones. Label it S1. Draw a point to show the new market equilibrium. Label it 2. If both demand and supply​ increase, what happens to the equilibrium quantity and the equilibrium​ price?

A For graph: as price decreases demand increases so d curve move to the right cut in cost = lower production cost = higher supply so s curve move to the right

If the price of a laptop rises​, with all other influences on buying plans remaining the​ same, does the demand for laptops change or does the quantity of laptops demanded​ change? If the price of a laptop rises​, with all other influences on buying plans remaining the​ same, _______. A. the demand for laptops decreases B. the quantity of laptops demanded decreases C. the demand for laptops increases D. the quantity of laptops demanded

B

The graph illustrates the market for tea. The initial equilibrium is at point A. After one or more​ changes, the new equilibrium moves to point B. What events could move the market for tea to point B​? The market for tea could have experienced​ _______. A. a rise in household income and an increase in the wage rate paid to tea pickers B. a rise in household income and an increase in the number of plantations C. a fall in household income and an increase in the number of plantations D. a fall in the wage rate paid to tea pickers and a fall in household income

B

Suppose fish fillets is a substitute in production of fish cakes. How does an increase in the price of fish fillets change the equilibrium price of fish cakes and the equilibrium quantity of fish cakes​? An increase in the price of fish fillets will​ ______ the equilibrium price of fish cakes and​ ______ the equilibrium quantity of fish cakes. A. increase​; increase B. increase​; decrease C. decrease​; increase D. decrease​; decrease

B makes sense because demand behaves same as price of substitute (inc in substitute price = inc in demand therefore a higher eq price since curve moved to right) supply behaves opp of substitute price. (inc in sub price = dec in supply therefore a lower quantity at the equilibrium point since the curve moved to the left)

What is the market demand​ curve? The market demand curve is​ _______. A. a curve that illustrates the law of demand when the good is a normal good but not when the good is an inferior good B. the vertical sum of the individual demand curves C. the horizontal sum of the individual demand curves D. a curve that shows the demand for a good at each price E. a curve that illustrates the law of demand when the price of a good rises but not when the price falls

C

Maria graduates from college and her income increases by ​$40,000. Nothing else changes. Maria decreases the quantity of hot dogs and potato chips that she buys and increases the quantity of bottled water that she buys. How would Maria describe these​ goods? For Maria​, ​_______. A. hot dogs and bottled water are inferior goods B. hot dogs and potato chips have become complements C. bottled water and potato chips have become substitutes D.hot dogs and potato chips are inferior goods

D

The graph shows the supply curve of milkshakes. Draw an arrow to show what happens to​ firms' plans if the price of a milkshake rises but all other influences on selling plans remain the same. When does the supply curve​ shift? When does a movement occur along the supply​ curve? If the price of a milkshake rises​, a​ ______ the supply curve occurs. If any factor that influences selling plans other than the price​ changes, then a​ ______ the supply curve occurs. A. leftward shift​ of; movement up along B. movement up ​along; movement down along C. movement down ​along; shift of D. movement up ​along; shift of

D

What is the most likely explanation if we observed a rise in the price of rubber matting and a decrease in the quantity of rubber matting that producers​ sell? If we observed a rise in the price of rubber matting and a decrease in the quantity of rubber matting that producers​ sell, the most likely explanation would be that​ _______. A. the market for rubber matting is unpredictable B. the supply curve has shifted rightward C. it is unprofitable to produce rubber matting D. the law of supply applies to rubber matting​, but some other influence on selling plans has also changed and the supply of rubber matting has

D

What is​ productivity? What is the effect of an increase in productivity on the supply of a​ good? Productivity is​ _______. An increase in productivity​ _______. A. input per unit of​ output; does not change supply B. technological​ change; increases supply C. cost per unit of​ output; increases supply D. output per unit of​ input; increases supply E. cost per unit of​ input; decreases supply

D

For​ consumers, computers and movie downloads are complements. If the price of a computer increases​, does the demand for movie downloads ​change? If the price of a computer increases​, the demand for movie downloads will​ _______. A. increase or​ decrease, but the demand for computers will not change Your answer is not correct. B. not​ change, but there will be a movement along the demand curve for movie downloads C. increase​, and the demand curve for movie downloads will shift rightward D. decrease​, and the demand curve for movie downloads will shift

D as price increase, demand decrease Need computer for movie downloads in this case (i.e. complements) so demand for computers lowers, therefore download demand lowers as well

What is the market supply​ curve? The market supply curve is​ _______. A. a curve that illustrates the law of supply when the price of a good rises but not when the price falls B. a curve that illustrates the law of supply when the good is a substitute in production but not when the good is a complement in production C. a curve that shows the supply of a good at each price D. the vertical sum of the individual supply curves E. the horizontal sum of the individual supply curves

E

The graph shows the demand curve for smartphones and the supply curve of smartphones. Draw a point at the equilibrium price and quantity of smartphones. Label it 1. Draw a curve that shows what happens in the market for smartphones if the wage rates of workers who produce smartphones rise but all other influences on selling plans remain the same. Label it S1. Draw a point at the new equilibrium price and quantity. Label it 2.

Supply will decrease because cost of production is now higher. Therefore S curve moves left, eq price increases

The graph shows the supply curve of running shoes. Now the expected future price of a pair of running shoes falls and all other influences on selling plans remain the same. Draw a curve that shows what happens to the supply of running shoes today. Label it.

curve to the right