Chapter 3
A change in quantity supplied is reflected by a movement along the same supply curve while a change in supply refers to a shift in the entire supply curve.
True
A decrease in the cost of inputs will shift the supply curve down and to the right.
True
A decrease in income causes demand for a normal good to ________, and an increase in income causes demand for an inferior good to ________.
decrease; decrease
In the diagram, for a market price of $4 total consumer surplus equals:
$30
Refer to the figure. Producer surplus at a price of $40 is:
$100
Refer to the figure. Calculate the dollar amount of consumer surplus being earned in this market when the price is $30 and there are 300 units consumed.
$4,500
Refer to the figure. What is the maximum price per book that buyers are willing to pay for 2,500 books?
$45
Refer to the figure. Calculate the total dollar amount of producer surplus earned in this market at a price of $100.
$5,000
In the figure, a $10 tax is imposed on the market for lobsters. What is the market price that lobster producers would need to receive to induce them to produce 5,000 bushels of lobster per day?
$60
Refer to the figure. The market price of the product is $20 per unit. Calculate the dollar amount of consumer surplus being earned in this market.
$60,000
Refer to the figure. If the price of bananas in the diagram is $6 a pound, what is the total producer surplus?
$80,000
Refer to the figure. Calculate the total dollar amount of producer surplus earned in this market if the market price is $60.
$800
(Figure: Bananas) Refer to the figure. If the price of bananas is $2 a pound, how many pounds of bananas will suppliers supply?
0
Refer to the figure. What is the maximum amount that buyers are willing and able to pay at a price of $45 per book?
100 books
(Figure: Good X) From the figure, the maximum price that consumers are willing to pay for _____ units of Good X is _____ per unit.
36; $4
(Figure: Bananas) Refer to the figure. If the price of bananas is $10 a pound, which number is closest to the number of pounds that suppliers will supply?
80,000
Which statement is TRUE regarding the figure?
At a price of $6 per unit, consumers are willing and able to buy 10 units.
(Figure: Good X) From the figure, which statement is TRUE?
At a price of $6 per unit, consumers are willing and able to purchase 26 units of Good X.
Which of the following could explain the figure?
Consumer income increases in the market for a normal good.
An increase in a per unit production tax ______ supply.
Decreases
A higher opportunity cost of producing a good increases the supply of that good.
False
Advertising, fads, and fashion are examples of influences on demand that are generally referred to as altering expectations about products.
False
Refer to the two figures. Which statement is TRUE?
Figure A depicts an increase in taxes.
An increase in a per unit production subsidy ______ supply.
Increases
A firm produces volleyballs and soccer balls. What happens to the supply of soccer balls if the market price of volleyballs increases?
The opportunity cost of producing soccer balls rises, so the supply curve of soccer balls decreases.
A change in price is reflected by a movement along the same demand curve while a change in demand refers to a shift of the entire demand curve.
True
A decrease in expected future supply of a good will lead to:
a change in the demand for the good even before the supply actually decreases.
Refer to the figure. Which factor would cause the change in the figure?
a decrease in the price of a complement good
A decrease in the price of one substitute good causes:
a leftward shift in the demand curve for the other substitute good.
A decrease in demand refers to:
a leftward shift of the demand curve.
Which of the following factors would cause the change in the figure?
an increase in the price of a substitute good
A decrease in production costs at any given quantity ______ supply.
increases
A good is considered normal if demand for it ______ when income ______.
increases; increases
A farmer can grow either apples or oranges. An increase in the price of apples ______ the opportunity cost of growing oranges so that the supply curve of oranges shifts ______.
increases; up and to the left
A farmer can grow soy or sorghum. If the price of soy increases, the opportunity cost of growing sorghum ______, shifting the supply curve of sorghum ______.
increases; up and to the left
A decrease in the opportunity cost of steel production will:
make suppliers more likely to produce steel, thus shifting the supply curve up and to the left.
A change in which factor would shift the supply curve?
production technology
In the diagram, the current demand curve for chicken legs is represented by D1. If the price of chicken thighs, a substitute for chicken legs, decreases, the demand curve for chicken legs will:
shift to D3.
A government subsidy to producers causes the:
supply of the product to increase.
A demand curve indicates that:
the quantity demanded of a good is higher when its price is lower.