Chapter 3 Quiz

Indicate whether a change in the value of each of the following determinants of supply leads to a movement along the supply curve or a shift in the supply curve. Change in factor productivity

A shift in the supply curve

Indicate whether a change in the value of each of the following determinants of supply leads to a movement along the supply curve or a shift in the supply curve. Change in producer expectations

A shift in the supply curve

Indicate whether a change in the value of each of the following determinants of supply leads to a movement along the supply curve or a shift in the supply curve. Change in resource prices

A shift in the supply curve

Indicate whether a change in the value of each of the following determinants of supply leads to a movement along the supply curve or a shift in the supply curve. Change in taxes

A shift in the supply curve

Indicate whether a change in the value of each of the following determinants of supply leads to a movement along the supply curve or a shift in the supply curve. Change in technology

A shift in the supply curve

Indicate whether a change in the value of each of the following determinants of supply leads to a movement along the supply curve or a shift in the supply curve. Change in the price of other goods

A shift in the supply curve

What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500? The price of gasoline substantially drops

Cannot be determined

In 2001 an outbreak of hoof-and-mouth disease in Europe led to the burning of millions of cattle carcasses. What impact do you think this had on the following? The supply of cattle hides

Decrease

In 2001 an outbreak of hoof-and-mouth disease in Europe led to the burning of millions of cattle carcasses. What impact do you think this had on the following? The supply of leather goods

Decrease

What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500? Consumers anticipate that the price of small autos will greatly come down in the near future

Decrease

What effect will each of the following have on the supply of auto tires? (Keeping all else constant) A decline in the number of firms in the tire industry

Decrease

What effect will each of the following have on the supply of auto tires? (Keeping all else constant) An increase in the prices of rubber used in the production of tires

Decrease

What effect will each of the following have on the supply of auto tires? (Keeping all else constant) The levying of a per-unit tax on each auto tire sold

Decrease

How is a market demand curve derived from individual demand curves? Add up quantities ____ by all individual consumers for each price.

Demanded

True or False: A "change in quantity demanded" is a shift of the entire demand curve to the right or to the left.

False

In 2001 an outbreak of hoof-and-mouth disease in Europe led to the burning of millions of cattle carcasses. What impact do you think this had on the following? Hide prices

Increase

In 2001 an outbreak of hoof-and-mouth disease in Europe led to the burning of millions of cattle carcasses. What impact do you think this had on the following? The price of leather goods

Increase

What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500? Income declines and small autos are an inferior good

Increase

What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500? Small automobiles become more fashionable

Increase

What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500? The price of large automobiles rises (with the price of small autos remaining the same)

Increase

What effect will each of the following have on the supply of auto tires? (Keeping all else constant) A decline in the price of large tires used for semi-trucks and earth-hauling rigs, a substitute in production. (with no change in the price of auto tires)

Increase

What effect will each of the following have on the supply of auto tires? (Keeping all else constant) A technological advance in the methods of producing tires

Increase

What effect will each of the following have on the supply of auto tires? (Keeping all else constant) The expectation that the equilibrium price of auto tires will be lower in the future than currently

Increase

What effect will each of the following have on the supply of auto tires? (Keeping all else constant) The granting of a 50-cent-per-unit subsidy for each auto tire produced

Increase

Which statement is consistent with the law of demand? A reduction in market price will lead to an ____ in quantity demanded.

Increase

Which of the following characteristics lead to a downward-sloping demand curve? An ____ in purchasing power as market price ____. ____ marginal utility.

Increase Decreases Diminishing

Which statement is consistent with the law of supply? An ____ in market price will lead to an ____ in quantity supplied.

Increase Increase

A price ceiling will result in a shortage only if the ceiling price is ____ the equilibrium price.

Less than

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve. Change in market price

Movement along demand curve

Indicate whether a change in the value of each of the following determinants of supply leads to a movement along the supply curve or a shift in the supply curve. Change in market price

Movement along the supply curve

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve. Change in the price of an unrelated good

No change

Which of the following characteristics leads to an upward-sloping supply curve? Increasing ____ costs. Increasing ____ costs.

Opportunity Marginal

On a cold day, both the demand for ice cream and the supply of ice cream decrease. Price and Quantity?

Price- ? Quantity- decrease

On a hot day, both the demand for lemonade and the supply of lemonade increase. Price and Quantity?

Price- ? Quantity- increase

In a hot area of Arizona where they generate a lot of their electricity with wind turbines, the demand for electricity falls on windy days as people switch off their air conditioners and enjoy the breeze. But at the same time, the amount of electricity supplied increases as the wind turbines spin faster. Price and Quantity?

Price- decrease Quantity- ?

Demand decreases and supply is constant. Price and Quantity?

Price- decreases Quantity- decreases

Supply increases and demand is constant. Price and Quantity?

Price- decreases Quantity- increases

Supply increases and demand decreases. Price and Quantity?

Price- decreases Quantity- indeterminate

When Hawaii's Mt. Kilauea erupts violently, the demand on the part of tourists for sightseeing flights increases but the supply of pilots willing to provide these dangerous flights decreases. Price and Quantity?

Price- increase Quantity- ?

Supply decreases and demand is constant. Price and Quantity?

Price- increases Quantity- decreases

Demand increases and supply is constant. Price and Quantity?

Price- increases Quantity- increases

Demand increases and supply decreases. Price and Quantity?

Price- increases Quantity- indeterminate

Demand decreases and supply decreases. Price and Quantity?

Price- indeterminate Quantity- decreases

Demand increases and supply increases. Price and Quantity?

Price- indeterminate Quantity- increases

For each stock in the stock market, the number of shares sold daily equals the number of shares purchased. That is, the quantity of each firm's shares demanded equals the quantity supplied. So, if this equality always occurs, why do the prices of stock shares ever change?

Prices change in reaction to a mismatch between Qd and Qs.

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve. Change in consumer expectations

Shift in demand curve

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve. Change in income

Shift in demand curve

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve. Change in preferences for this good

Shift in demand curve

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve. Change in the price of a related good

Shift in demand curve

In which of these two statements are the terms "supply" and "demand" used correctly? A. "In the corn market, demand often exceeds supply and supply sometimes exceeds demand." B. "The price of corn rises and falls in response to changes in supply and demand."

Statement B

How do you derive a market supply curve from individual supply curves? Add up quantities ____ by all individual producers for each price.

Supplied

Suppose that in the market for computer memory chips, the equilibrium price is $50 per chip. If the current price is $55 per chip, then there will be a ____ of memory chips.

Surplus