Unit: Supply and Demand (Demand and Supply)

b

A government is concerned about whether young children in a community are receiving enough healthcare. Which of the following is the LEAST likely to increase the amount of healthcare that people provide their children? (a) Lowering regulations on who can provide healthcare, such as allowing nurses to provide healthcare rather than just doctors (b) increase the price of healthcare (c) subsidize healthcare (d) reduce the distance traveled to get healthcare (e) Provide coupons for free healthcare

a

According to the law of supply, what happens when the price of a good increases? (a) The quantity supplied increases. (b) The supply curve shifts to the right. (c) The supply curve shifts to the left. (d) People are willing to buy what is supplied. (e) The supply curve flattens out.

e

The demand for Good X is given in the graph shown here. Which of the following could cause the shift of demand shown here? (a) People do not like good X as much as they did before (b) Buyers of good X expect the price of good X to decrease in the future (c) An increase in the price of good Y, which is a complement to good X (d) An increase in income if good X is an inferior good (e) An increase in the number of buyers of a good

e

Which of the following statements correctly describes how an event will impact supply or quantity supplied? (a) A price decrease increases quantity supplied. (b) An increase in demand causes an increase in supply. (c) An increase in costs of production causes the supply curve to increase. (d) A price increase causes an increase in supply. (e) A decrease in resource costs causes an increase in the supply curve

c

Which of the two following movements in this graph would represent an increase in quantity demanded but not a change in demand? (a) From point R to point U (b) From point U to point T (c) From point S to point U (d) From point S to point R (e) From point S to point T

a

Something has changed about how consumers buy hats, which has resulted in the change shown in the graph shown here. Which of the following changes could this graph represent? (a) People do not like hats as much as they did before, so their demand has decreased (b) People like hats more than they did before, and their demand for hats has increased because of this (c) There has been a decrease in the price of hats, resulting in an increase in the quantity demanded for hats (d) People do not like hats as much as they did before, resulting in a movement along the demand curve.

c

The table below shows the supply schedules for 3 sellers in a market. How much is supplied in this market at a price of $2 and at a price of $5? (a) 3 units when the price is $2; 7 units when the price is $5 (b) 0 units when the price is $2; 3 units when the price is $5 (c) 3 units when the price is $2; 15 units when the price is $5 (d) 2 units when the price is $2; 8 units when the price is $5 (e) 2 units when the price is $2; 5 units when the price is $5

a

Use the figure shown to answer the question. According to each supply curve, what quantities would be produced at $30? (a) S1: 40 S2: 0 (b) S1: 0 S2: 0 (c) S1: 0 S2: 30 (d) S1: 30 S2: 30 (e) S1: 30 S2: 10

c

What are the elements of property rights that help markets function? (a) central planning of resource use, central planning of allocation of goods, centrally set prices (b) rivalry and non-excludability (c) exclusivity, enforceability, and transferability (d) non-rivalry and non-excludability (e) durability, portability, divisibility

a

What is necessary for the effective functioning of a market system? (a) well-defined system of property rights (b) weak enforcement of ownership claims (c) prohibitions on transferring ownership (d) centrally coordinated prices (e) central control of resources of production

d

Which of the following best describes a change in quantity demanded and a change in demand? (a) The two terms can be used interchangeably. (b) Both ΔQd​ and ΔD occur when price changes. (c) ΔD occurs when the cost of inputs to production increase, ΔQd​ occurs when the cost of inputs to production decrease (d) ΔQd​ is a movement along a curve and ΔD is a movement of the entire curve. (e) ΔD and ΔQd both change in response to income, expectations, preferences, number of buyers, and prices of other goods.​

c

Which of the following best describes the law of demand? (a) Sellers set the price that demanders pay. (b) Legal authorities regulate prices. (c) When price decreases, the quantity demanded increases. (d) People demand the same amount of a good no matter its price. (e) Demand decreases for a normal good when incomes increase.

e

Which of the following best describes the law of supply? (a) Sellers set the price that demanders pay. (b) Producers sell the same amount of a good no matter its price. (c) Supply is infinite. (d) Legal authorities regulate markets. (e) As price increases, quantity supplied increases.

a

Which of the following correctly describes a change in quantity demanded and a change in demand? (a) A change in quantity demanded is a response to a price change and a change in demand is a response to a non-price change (b) A change in demand and a change in quantity demanded both happen in response to price changes (c) Both describe a movement along a single demand curve (d) The two terms can be used interchangeably (e) A change in quantity demanded occurs when price increases and a change in demand occur when a price decreases

d

Which of the following could cause the movement indicated by the arrow in the graph shown here? (a) Reduced government regulation of producers (b) Lower worker wages (c) A decrease in consumer income (d) Increased government regulations of producers (e) Seller's expectation that the good's price will fall in the future

b

Which of the following could cause the shift from S1 to S2 shown in the graph shown? (a) A decrease in the number of producers in the market (b) A reduction in raw material prices (c) An increase in consumer incomes (d) Higher worker wages (e) An increases in taxes on producers

a

Which of the following could cause the shift shown in this graph? (a) an increase in the cost of an input to production (b) a reduction in regulations (c) an increase in the number of producers in the market (d) lower cost of labor (e) sellers expect a lower price in the future

d

Which of the following is NOT a likely consequence of weakly established or absent property rights? (a) prices that do not reflect the true value and cost of something (b) pollution (c) overuse of a resource (d) innovation (e) uncertainty about ownership claims

e

Which of the following movements would be described as an increase in supply of a good? (a) B to A (b) A to C (c) D to C (d) D to A (e) A to D

b,e

Which of the following movements would represent a decrease in the quantity supplied? (a) B to A (b) D to B (c) A to C (d) D to A (e) C to A

e

Which of the following movements would represent an increase in the demand for a good? (a) From S to U (b) From T to U (c) From R to S (d) From R to T (e) From S to R

c

All of the following influence whether a consumer buys more of a good EXCEPT: (a) how much other goods cost (b) how much income the consumer has to spend (c) how much the consumer previously spent on the good (d) a change in the good's price (e) whether or not it is legal to buy more of the good

b

All of the following will result in a shift in a demand curve except: (a) A change in the income of buyers (b) A change in the supply of a good (c) A change in expected future prices (d) A change in the price of related goods (e) A change in buyers' preferences

d

Anthony's Ephemera Emporium sells signed photos of cryptids like Bigfoot, chupacabra, and other mythical creatures. These photos are substitutes in production. If Anthony expects the price of signed photos of Bigfoot to increase, what happens? (a) The demand for signed photos of either good increase. (b) The supply of signed photos of chupacabras increases (c) The supply of signed photos of Bigfoot decreases (d) The supply of signed photos of chupacabras decrease. (e) The supply of signed photos of Bigfoot increases

a

As a result of an increase in consumer incomes, the demand for Meeps has decreased. Based on this information, what can we definitely say about what type of good a Meep is? (a) It is an inferior good. (b) It has many substitutes. (c) It is a substitute good. (d) It is a complement good. (e) It is a normal good.

e

Assume that crayons can be stored indefinitely. What happens today if producers of crayons expect to get higher prices in the future? (a) The supply of crayons increases (b) The demand for crayons increases (c) The quantity supplied of crayons decreases (d) The supply and demand for crayons both increase (e) The supply of crayons decreases

a

Assume that good A and good B are substitutes for each other. Andrea is currently consuming the utility-maximizing combination of these two goods. How will the MUA and MUB change if Andrea alters her consumption as a result of an increase in the price of good B? (a) MUB will increase and MUA will decrease as the consumer reallocates consumption. (b) MUA will increase and MUB will decrease as the consumer reallocates consumption. (c) MUA and MUB will both definitely increase. (d) MUA and MUB will both definitely decrease. (e) MU will both increase, but the MUA will increase by more than the increase in MUB

a

Coffee bean merchants notice that coffee prices are at a historic low today, but they expect the price of coffee beans to increase in the next six months. How will the expectation of an increase in future prices most likely affect the supply of coffee beans on the market today? (a) Supply will decrease. (b) Supply will increase. (c) There will be a movement along the same supply curve to a new higher quantity supplied. (d) There will be a movement along the same supply curve to a new lower quantity supplied. (e) There is no change in supply.

d

Economists have observed that when average incomes increase, purchases of fast food tends to decline. Based on this information, what can we definitely say about fast food? (a) Demand for fast food is upward sloping (b) Fast food has no substitutes (c) The price of a complement to fast food has risen (d) Fast food is an inferior good (e) Fast food is a normal good

b

Jeff is a rational consumer who spends his entire income on food and vacations. The table below describes his marginal utility and the prices of food and vacations. If the price of a vacation decreases to $300, which of the following best describes the income effect of this price change? (a) The price of a vacation relative to food has decreased, so he will buy more vacations. (b) He now effectively has more disposable income, which he can spend on more vacations, more food, or both. (c) He will purchase more of both goods because his total income has increased. (d) The marginal utility per dollar spent on vacations is lower, so he will increase how many vacations he purchases. (e) He will purchase less food because the marginal utility per dollar spent on food has decreased.

c

Land in the United States can be used to produce either soybeans or corn. The price of soybean fertilizer has fallen due to cheaper imports from Ghana. What will change for soybeans and corn? (a) Supply of both corn and soybeans will increase (b) Supply of soybeans will decrease and supply of corn will increase (c) Supply of soybeans will increase and the supply of corn will decrease (d) Quantity supplied of corn and quantity supplied of soybeans will both increase (e) Quantity supplied of corn and quantity supplied of soybeans will both decrease

b

Meeps and Blops are two goods that are related to each other. When the price of Meeps goes down, the demand for Blops goes down. Based only on the information given here, what kind of goods are Meeps and Blops? (a) complements (b) substitutes (c) normal goods (d) inferior goods (e) superior goods

b

Owen saw that the price of peaches had gone down, and so he decided to buy more peaches. Based on this information only, what does Owen's reaction reflect? (a) Owen's demand for peaches has increased. (b) Owen's quantity demanded for peaches has increased. (c) Owen has experienced an increase in income. (d) Owen observed that there has been an increase in the price of other fruit, a substitute for peaches. (e) Owen expects future price changes.

b

Pam considers t-shirts and gym classes to be complementary goods. How will Pam react if the price of gym classes increases? (a) Her quantity demanded of gym classes will decrease, and her demand for t-shirts will be unaffected. (b) Her quantity demanded of gym classes will decrease, and her demand for t-shirts will decrease. (c) Her quantity demanded of gym classes won't change, and her demand for t-shirts will increase. (d) Her quantity demanded of gym classes will increase, and her demand for t-shirts will increase. (e) Her quantity demanded of gym classes will increase, and her demand for t-shirts will decrease.

e

Pam sells hand-shaped soaps at farmer's market. She recently created a revolutionary new soap production technique that doubled her production without having to use more resources. What changes as a result of Pam's innovation? (a) The demand for soap decreases. (b) The demand for soap increases. (c) The supply of hand-shaped soap decreases. (d) The quantity supplied of hand-shaped soap decreases. (e) The supply of hand-shaped soap increases.

d

Penny thinks that the price of books will decrease next week. If everything else is equal, which of the following would reflect how Penny's behavior will change in response to her expectations? (a) Penny's demand for books today will increase (b) Penny will move to a new, lower quantity along her demand curve (c) Penny will demand more complementary goods to books (d) Penny's demand for books today will decrease (e) Penny will move to a new, higher quantity on her demand curve