Chapter 2
Given the following market equations: Supply: Qs = -1 + 3P Demand: Qd = 79 - 1p Solve for the equilibrium price.
$20
Suppose the supply function for avocados is Q = 58 + 15p -20p, where p is the price of fertilizer. Holding the price of fertilizer constant, by how much would the price of avocados need to rise to cause an increase of 105 (million lbs. per month) in the quantity of avocados supplied? To increase the quantity of avocados by 105 million lbs. per month, the price of avocados would need to change by ...
$7
Consider the demand for avocados. Does an increase in average income cause a shift of the demand curve for avocados or a movement along the demand curve? Explain. An increase in average income causes A. a shift of the avocado demand curve because all factors including the price of avocados cause quantity to change for a given price B. a shift of the avocado demand curve because only a change in the price of avocados causes a movement along the avocado demand curve. C. A shift of the avocado demand curve because consumers will not spend any of the new income D. A movement along the demand curve for avocados but a shift in the supply curve for avocados
Answer: B
If the inverse demand curve for hairspray is represented by equation P = 10 - 0.2Q^D, then the corresponding demand curve is represented by the equation ... A. Q^D = 5P - 2 B. Q^D = 50 - 5P C. Q^D = -10 + 0.2P D. Q^D = 0.5P + 2
Answer: B
In the economic sense, almost everything is scarce. ___ of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price. A. Overstock B. Shortage C. Scarcity D. Surplus
Answer: B
An increase in consumer's income will lead to: A. A movement upward along the demand curve for a normal good B. A rightward shift of the supply curve for a normal good C. A rightward shift of the demand curve for a normal good D. No change of the demand curve for a normal good
Answer: C
Rent control is an example of A. a black market B. a subsidy for low-skilled workers C. a price ceiling D. a price floor
Answer: C
The following equations represent the demand and supply for silver pendants. Qd= 50 - 2P Qs = -10 + 2P What is the equilibrium price (P) and quantity of (Q - thousands) of pendants? A. P = $10 ; Q = 30,000 B. P = $20 ; Q = 15,000 C. P = $50 ; Q = 10,000 D. P = $15 ; Q = 20,000
Answer: D
The estimated monthly US demand function for avocados is Q = 144 - 40P + 20Pt, where P is the price of avocados and Pt is the price of tomatoes. The estimated supply function is Q = 50 + 15P. The initial price of tomatoes is $0.80 cents per pound. Using algebra, determine the initial equilibrium price and quantity of avocados, and then determine how price and quantity change if the price of tomatoes increased by $1.95 to $2.75. Given Pt = $0.80, the initial equilibrium of avocados is P = ... and the initial equilibrium quantity of avocados is Q =... Given Pt = $2.75, the new equilibrium price of avocados is p = ... and the new equilibrium quantity of avocados is Q =...
P = $2, Q = 80 ; P = $2.71, Q = 90.6
Suppose the demand function for avocados is Q= 104 − 40p + 20pt + 0.01Y, where p is the price of avocados, pt is the price of tomatoes, and Y is average income, and the supply function for avocados is Q= 58 + 15p − 20pf, where pf is the price of fertilizer. Suppose pt=$0.80, Y=$4,000, and pf=$0.40. What is the equilibrium price and quantity of avocados? The equilibrium price of avocados is ... and the equilibrium quantity is ...
p = $2 ; Q = 80 units
An increase in the price of a good will lead to: A. A movement up along the demand curve for that good B. A leftward shift of the demand curve for that good C. A movement down along the demand curve for that good D. A rightward shift of the demand curve for that good
Answer: A
According to the Law of Demand, the demand curve for a good will A. slope upward B. Slope downward C. shift rightward when the price of the good increases D. shift leftward when the price of the good increases
Answer: B
An increase in production costs will lead to: A. A movement upward along the supply curve B. A leftward shift of the supply curve C. A rightward shift of the demand curve for this good D. No change of the supply curve
Answer: B
An increase in the price of a good will lead to: A. A rightward shift of the supply curve for that good B. A movement up along the supply curve for that good C. A leftward shift of the supply curve for that good D. A movement down along the supply curve for that good
Answer: B
