Norbery Eco: 5 & 6

*look at table* 5-1* If Barbara is only able to purchase 20 bags of chocolate-covered peanuts, the maximum price she is willing and able to pay for each bag is ______.

$0.70

Which of the following best describes the typical upward sloping shape of supply curves?

As the price of cattle falls, ranchers are less willing to sell their cattle at livestock auctions.

Which of the following would shift the demand curve for new textbooks to the right?

An increase in college enrollments

If suppliers expect prices to rise next year for their product, then one would expect:

That this will shift the supply curve for the product to the left this year.

Raclette is a popular wintertime dish in Switzerland. It is essentially melted Raclette cheese over boiled new potatoes. If the price of this cheese decreased, we would expect:

An increase in demand for new potatoes.

A decrease in supply of a good is caused by:

An increase in prices of goods that are substitutes in production.

The law of demand is illustrated when:

An increase in the purchases of personal computers results fromlower prices.

The law of demand states that, other things equal:

As the price increases, the quantity demanded will decrease.

*look at graph 6-1* If there is an expectation of the part of coconut suppliers that the price of coconuts will be significantly higher in the very near future, then the movement in the model to reflect today's market behavior would be:

B to E

*look at graph 5-1* If coconuts are considered a normal good and the overall income level of consumers is falling, then the movement that would take place in the model could be:

C to A

*look at graph 6-1* If the prices of inputs used to produce and transport coconuts are increasing, then the movement in the model could be:

C to A

Markets that are characterized by many buyers and many sellers are referred to as:

Competitive

When the price of gasoline goes up and the demand for tires goes down, this means tires and gasoline are:

Complements

A direct relationship between price and quantity is represented by:

The supply curve

An inverse relationship between the quantity demanded and price is called the law of:

Demand

Over the past several years, consumer tastes for tattoos have increased. This means that the ______ for tattoos has _____.

Demand; increased.

A decrease in the price of eggs will result in a(n):

Downward movement along the supply curve for eggs.

An increase in the demand for gasoline today caused by concerns that gasoline prices will be higher tomorrow is most likely attributable to which of the following?

Consumer expectations

If goods A and B are substitutes, a decrease in the price of good B will:

Decrease the demand for good A.

Consider the supply curve for cotton shirts. An increase in the price of cotton will:

Decrease the supply of cotton shirts.

*look at table* If George, Barbara, and Dan are the only three buyers in the market, and the price of a bag of chocolate-covered peanuts is $0.80, the total market demand is ______ bags per month.

105

*look at table 5-1* If the price of chocolate-covered peanuts is $0.60 the quantity demanded by George is ______ bags per month.

25

*look at table 6-1* When the price of lemonade is $1 per cup, tje quantity of lemonade supplied by Eli will be:

40 cups

*look at table 6-1* If the price of lemonade is $1 per cup, total quantity of lemonade supplied will be:

90 cups

A decrease in supply means:

A shift to the left of the entire supply curve.

*look at graph 6-1* If the price of coconuts decreases, then the movement that would take place in the model could be:

A to B

*look at graph 5-1* If fish is a substitute good for coconuts and the price of fish increases, then the movement that would take place in the model could be:

A to C

*look at graph 5-1* If there is an overall increase in taste and preferences for coconuts, then the movement that would take place in the model could be:

A to C

*look at graph 6-1* If there is an improvement in the technology used to harvest coconuts (e.g., faster, less expensive coconut picker), then the movement in the model could be:

A to C

When the economy suffers a downturn, vacationers are more likely to take car trips than to fly. Which of the following provides the most reasonable explanation for this phenomenon?

Air travel is a normal good and vacation travel by car is an inferior good.

A farmer finds that when he produces more corn, he also has more corn stalks that he can then sell as decorative ornaments. To the farmer, corn and corn stalks are:

Complements in production.

*look at graph 5-1* If coconuts are considered a normal good and there is an expectation on the part of consumers that the prices of coconuts will rise significantly in the near future, then the movement that would take place in the model could be:

E to B

*look at graph 6-1* If the prices of inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts are decreasing, then the movement in the model could be:

E to B

A decrease in the price of eggs will result in a(n):

Greater quantity of eggs demanded.

When the price of lamps increases, the:

Quantity supplied increases.