Chapter 2 - Demand, Supply, and Markets
Suppose the supply and demand schedules for Japanese cars in the U.S. are as follows: What is the equilibrium price? PICTURE
14000.0
What is the equilibrium quantity? PICTURE
2.0
Indicate which of the following will cause a movement along a supply curve. Which will shift the supply curve to the left? Which will shift the supply curve to the right? Will supply increase or decrease? A decrease in the price of an input¸ such as wages for labor A decrease in the price of another good that firms in the industry could produce A decrease in the price of the good itself A tax on the land used by the producer Expectations of rising prices of the good in the near future
A decrease in the price of an input¸ such as wages for labor- shift the supply curve to the right; an increase in supply A decrease in the price of another good that firms in the industry could produce- shift the supply curve to the right; an increase in supply A decrease in the price of the good itself- a movement along a supply curve; no change in supply A tax on the land used by the producer- shift the supply curve to the left; a decrease in supply Expectations of rising prices of the good in the near future- shift the supply curve to the left; a decrease in supply
Indicate which of the following will cause a movement along a demand curve. Which will shift the demand curve to the left? Which will shift the demand curve to the right? Will demand increase or decrease? An increase in the price of the good an increase in income for a normal good a decrease in the price of a substitute good expectations of falling income in the near future expectations of rising prices in the near future
An increase in the price of the good- a movement along a demand curve, no change in demand an increase in income for a normal good- shift the demand curve to the right and an increase in demand a decrease in the price of a substitute good- shift the demand curve to the left and a decrease in demand expectations of falling income in the near future- Shift the demand curve to the left and a decrease in demand. (If the good is normal.) expectations of rising prices in the near future- Shift the demand curve to the right and an increase in demand now.
Match the economic change to its associated effect on demand, supply, quantity demanded, or quantity supplied. Change in technology Price of the good sold by a firm Number of sellers Tastes and preferences Price of related goods
Change in technology- supply change Price of the good sold by a firm- quantity supplied changes Number of sellers- supply changes Tastes and preferences- demand changes Price of related goods- demand and supply change
Since 1950, the labor force participation rate of women with young children has increased dramatically. In accordance with this trend, one would predict that there has been _______________. a) an increase in the demand for child care services b) an increase in the quantity demanded of child care services c) a decrease in the demand for child care services d) a decrease in the quantity demanded of child care services
a) an increase in the demand for child care services
What will happen to current purchases if people expect lower prices in the future? What will happen with expectations of higher incomes? a) demand increases; demand increases b) demand decreases; demand increases c) demand increases; demand decreases d) demand decreases; demand decreases
b) demand decreases; demand increases
Okra was $13.00 per bushel in 2015, and 1.5 million bushels were sold. Okra was $14.00 per bushel in 2016, and 2.0 million bushels were sold. "If in both cases the okra market was in equilibrium, this must be an example of an exception to the law of demand." a) true b) false
b) false
Suppose the U.S. supply and demand schedules for computers manufactured in Japan are in the table below. What is the equilibrium price? PICTURE a) $5 b) $9 c) $11 d) $13 e) $15
c) $11
Indicate how a decrease in the cost of producing oranges (a substitute for apples) will affect the equilibrium price and the equilibrium quantity in the market for apples. a) increase; increase b) increase; decrease c) decrease; decrease d) decrease; increase
c) decrease; decrease
How does an decrease in input costs affect suppliers? a) demand increases b) demand decreases c) supply increases d) supply decreases
c) supply increases
How will an increase in the price of DVDs affect the demand for DVD players? Why? a) quantity demanded of DVD players increase b) demand for DVD players increases c) quantity demanded of DVD players decreases d) demand for DVD players decreases
d) demand for DVD players decreases
Which of the following does not cause a change in demand? a) tastes and preferences b) income c) prices of related goods- substitutes and complements d) price of the good e) the number of potential buys
d) price of the good
"Falling oil prices have caused a sharp decrease in the supply of oil." Speaking precisely, this quotation is _______. a)Correct; a decrease in price always causes a decrease in supply. b)Incorrect; a decrease in price causes an increase in supply, not a decrease in supply. c)Incorrect; a decrease in price causes an increase in the quantity supplied, not a decrease in supply. d)Incorrect; a decrease in price causes a decrease in the quantity supplied, not a decrease in supply.
d)Incorrect; a decrease in price causes a decrease in the quantity supplied, not a decrease in supply.
Health insurance makes medical care more affordable for individuals. What will happen to the equilibrium price of medical care as a result of better health care coverage and why? a)Price decreases because demand increases b)Price decreases because supply increases c)Price increases because supply decreases d)Price increases because demand increases
d)Price increases because demand increases
New technology lowering the costs of production will cause the equilibrium price to ______________ and the equilibrium quantity to ______________. a)increase; increase b)increase; decrease c)decrease; decrease d)decrease;increase
d)decrease;increase
