Microeconomics Chapter 3
Which statement is CORRECT?
A change in quantity demanded is a movement along the demand curve, and a change in demand is a shift of the demand curve.
_____ illustrates a positive relationship between price and quantity.
A supply curve
Consider the supply curve for cotton shirts. An increase in the price of cotton will:
decrease the supply of cotton shirts.
If steak and potatoes are complements, when the price of steak goes up, the demand curve for potatoes:
shifts to the left.
If the price of chocolate-covered peanuts is $0.50, there is a:
shortage of 70 bags per month.
Many public utilities burn oil to generate electricity. If the price of oil increases, we except a shift to the _ in the _ curve for _ and a _ price for electricity.
left; supply; electricity; higher
An announcement that smoking will harm your ability to think clearly will MOST likely result in:
a decrease in the demand for cigarettes.
Which factor will NOT cause an increase in demand for good X?
a decrease in the price of good X
In the market for tacos, the factor that does NOT shift the supply curve to the left is:
a decrease in the price of tacos
A decrease in the price of online movies sold by movie producers to rental outlets like Amazon and Apple would result in a change illustrated by the move from:
n to o in panel A.
When the price of desks increases, the:
quantity supplied increases.
If the price of a commodity increases, you can usually expect the:
quantity supplied to increase.
A shortage of 210 bags of chocolate-covered peanuts per month exists if the price is _____ per bag.
$0.30
A surplus of 210 bags of chocolate-covered peanuts per month exists if the price is _____ per bag.
$0.90
Given the initial equilibrium of S1 and D, any price lower than _____ will exert pressure for the price to _____.
$2.50; rise
What is the equilibrium quantity in this wheat market each period?
6,000 bushels
If the price of lemonade is $1 per cup, the total quantity of lemonade supplied will be _____ cups per day.
90
An expectation on the part of coconut suppliers that the price of coconuts will be significantly higher in the very near future would be represented in the figure as a movement from:
B to E.
Which statement illustrates the law of demand?
Consumers buy more personal computers because prices have fallen.
Which of the graphs illustrates what may happen in the market for online movie rentals if D1 or S1 is the original curve and D2 or S2 is the new curve and if the cost to the firm of producing online movie rentals falls?
D
If goods A and Z are complements, an increase in the price of good Z will:
If goods A and Z are complements, an increase in the price of good Z will:
Suppose a fall frost destroys one-third of the nation's grapefruit crop. Which panel BEST describes how this will affect the market for vitamin B12 tablets, which are a substitute in consumption for grapefruit?
Panel A
Suppose the technology for producing snowboards improves. Which panel BEST describes how this will affect the market for winter parkas, a complement in consumption of snowboards?
Panel A
Suppose a wet and sunny year increases the nation's corn crop by 20%. Which panel BEST describes how this will affect the market for corn?
Panel B
Which factor would result solely in a movement along the demand curve for a particular good?
a change in the price of that good
Which factor would NOT cause the supply curve to shift?
a change in the price of the good
An increase in the price of hamburger would probably result in _____ in the demand for hamburger buns.
a decrease
If chicken and beef are substitutes, then a fall in the price of chicken will bring about
a decrease in the demand for beef.
Assuming that tablets are normal goods, which factor will NOT increase demand for tablets?
a very large company that makes tablets going out of business
If the price of eggs decreased, it would probably result in _____ in the demand for bacon, a complement good.
an increase
Which factor would shift the demand curve for new textbooks to the right?
an increase in college enrollment
In much of the country, homeowners choose to heat their houses with either natural gas or heating oil, both of which are normal goods. Which factor would cause an increase in the demand for natural gas?
an increase in consumer incomes
Raclette is a popular wintertime dish in Switzerland. It is essentially melted Raclette cheese over boiled new potatoes. If the price of Raclette cheese decreased, we would expect to see:
an increase in demand for new potatoes.
Which factor would cause a LEFTWARD shift in the supply curve for a good?
an increase in the cost of an input
A factor that may have changed supply from S1 to S2 is:
better technology in the production of gasoline.
If people demand more of product A when the price of B falls, then A and B are:
complements.
If the demand for tires goes down when the price of gas goes up, then tires and gas are:
complements.
The law of demand implies that:
consumers will buy more at lower prices.
The law of demand is illustrated by a demand curve that is:
downward sloping
If supply is upward sloping, a shift of a demand curve to the right, all other things unchanged, will:
increase equilibrium price and quantity.
Which influence does NOT shift the supply curve?
people deciding that they want to buy more of the product
The _____ tomatoes will decrease if fertilizer prices rise.
supply of
An improvement in the technology used to harvest coconuts (e.g., a faster, less expensive coconut picker) would be represented in the figure as a movement from:
A to C.
Suppose vast new oilfields are discovered offshore of California and gasoline prices fall. Which panel BEST describes how this will affect the market for sport utility vehicles, a complement in consumption to gasoline?
Panel A
Suppose scientists discover that eating pomegranates causes aging. Which panel BEST describes how this will affect the market for pomegranates?
Panel B
Suppose half of the people in San Diego pack up and move to Colorado Springs. Which panel BEST describes how this will affect the supply of houses in San Diego?
Panel C
The graph shows how supply and demand might shift in response to specific events. Suppose a drought destroys one-third of the nation's peanut crop.Which panel BEST describes how this will affect the market for peanuts?
Panel C
Suppose a spring frost destroys one-third of the nation's artichoke crop. Which panel BEST describes how this will affect the market for mayonnaise, which is a complement to artichokes?
Panel D
Suppose the technology for producing ethanol fuel improves. Which panel BEST describes how this will affect the market for ethanol?
Panel D
Which statement is TRUE of a normal good?
When income increases, the demand for the good increases.
Which factor is likely to cause a rightward shift in the demand for home-delivered pizza?
a larger population
Consider two competing motorcycle manufacturers, Harley-Davidson and Honda. If Harley-Davidson raises the price of its motorcycles, we can expect:
a shift to the right in the demand curve for Hondas and higher prices for Hondas
If the supply and demand curves intersect at a price of $14, then any price below that would result in:
a shortage.
If the supply and demand curves intersect at a price of $47, then any price above that would result in:
a surplus.
The demand curve for monthly subscriptions to HBO has shifted to the right. What could have caused it?
an increase in the incomes of buyers
Which factor will NOT cause an increase in the supply of cornflakes?
an increase in the price of cornflakes
If the price of mozzarella cheese (an ingredient in pizza) declines, there will be:
an increase in the supply of pizza.
The demand curve for running shoes has shifted to the right. What could have caused it?
an increased enthusiasm among the population for running as exercise
A newspaper story recently reported that the price of new cars, a normal good, has decreased and the quantity of new cars sold has dropped. The new price and quantity could have been caused by a(n):
decrease in buyers' incomes.
Over the past several years, consumers have had an increasing interest in getting tattoos. This means that the _____ for tattoos has _____.
demand; increased
In the market for canned pinto beans, _____ will increase if income increases and if pinto beans are a(n) _____ good.
demand; normal
Suppose the local real estate market is in equilibrium. A recession causes local household incomes to decline. At the same time, construction of a large subdivision of new homes has just been completed. Given these two changes and assuming that real estate is a normal good, we can predict that the price of real estate will _____ and the quantity of real estate bought and sold will _____.
fall; rise or fall
If the United States increases tariffs on imports of lumber from Canada (which raises the price of lumber in the United States), the equilibrium price of new homes in the United States will _____ and the equilibrium quantity of new homes in the United States will _____.
increase; decrease
Over the past few years, the technology associated with producing flat-panel televisions has improved. This has led to a(n) _____ in the _____ flat-panel televisions.
increase; supply of
After graduation from college, you might have an increase in your income from a new job. If as a result you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger is a(n) _____ good.
inferior
If the market for buffalo meat is in equilibrium, the price of buffalo meat will probably _____ in the near future.
not change
If the economy booms and peoples' incomes rise, then the demand curve for a normal good like new houses will _ and the equilibrium quantity of new houses produced will _.
shift to the right; increase
A temporary price of $4 in this market would result in a _____ of _____ bushels per period.
shortage; 4,000
You notice that the price of Blu-ray players falls and the quantity of Blu-ray players sold increases. this set of observations can be the result of the _Blu-ray players shifting to the _.
supply of; right
If the rental price of Blu-ray discs rises from $5 to $7:
the quantity demanded will decrease from 50 to 30 rentals per weekend.