Econ practice quiz chap 3

Assume that the cost of aluminum used by​ soft-drink companies increases. Indicate which of the following statements describing the resulting effects in the market for soft drinks distributed in aluminum cans are true​ (T) or false​ (F). a. The demand for soft drinks decreases b. The quantity of soft drinks demanded decreases. c. The supply of soft drinks decreases. d. The quantity of soft drinks supplied decreases.

A. F B. T C. T D. F

Which of the following is an implication of the law of​ supply? A. Producers will offer more units at a higher price and fewer units at a lower price. B. Individuals will purchase fewer units at a higher price and more units at a lower price. C. Changes in the price of a good leads to a shift in the supply curve. D. Increases in money prices will lead to an increase in supply while increases in relative prices will lead to a decrease in supply.

A. Producers will offer more units at a higher price and fewer units at a lower price.

Which of the following will cause an outward​ (rightward) shift in​ supply? A. A decline in labor productivity. B. A technological improvement. C. The cost of an input increases. D. A reduction in consumer incomes.

B. A technological improvement.

What if the increase in demand were smaller than the increase in supply?

Equilibrium price falls and quantity rises.

Identify which of the following would generate a decrease in the market demand for​ e-book readers, which are a normal good. I. An increase in the price of downloadable apps utilized to enhance the​ e-book reading​ experience, which are complements. II. An increase in the number of consumers in the market for​ e-book readers. III. A decrease in the price of tablet​ devices, which are substitutes. IV. A reduction in the income of consumers of​ e-book readers.

I, III, and IV

Assume the cost of aluminum used by​ soft-drink companies increases. Which of the following correctly describes the resulting effects in the market for canned soft​ drinks? I. The demand for soft drinks decreases. II. The quantity of soft drinks demanded decreases. III. The supply of soft drinks decreases. IV. The quantity of soft drinks supplied decreases.

II and III

If the present rental rate of​ one-bedroom apartments is​ $1,000 per​ month, through what mechanism will the rental rate adjust to the equilibrium rental rate of​ $800?

Since the price is above​ equilibrium, the surplus of apartments will cause the quantity supplied to fall and the quantity demanded to rise.

If the present rental rate of​ one-bedroom apartments is​ $600 per​ month, through what mechanism will the rental rate adjust to the equilibrium rental rate of​ $800?

Since the price is below​ equilibrium, the shortage of apartments will cause the quantity supplied to rise and the quantity demanded to fall.

What if the increase in demand were larger than the increase in supply?

The equilibrium price and quantity increase.

Explain whether the change in the price of the complement or substitute must have been an increase or a decrease: A rise in the demand for a dashborard global positioning - system device follows a change in the price of automobiles, which are complements.

The price of the complement decreased.

Explain whether the change in the price of the complement or substitute must have been an increase or a decrease: A rise in the demand for tablet devices follows a change in the price of ultrathin laptop computers, which are substitutes.

The price of the substitute increased.

According to the law of supply, as the price of the good decreases, it causes

a movement downward along the supply curve.

The law of demand states that

as price increases, quantity demanded decreases, all other things equal

The law of supply states that

as price increasesm quantity supplies increases, all other things equal

According to the same example in the​ book, medical research has shown that grapefruit juice can reduce the effectiveness of certain medications.​ However, there is also evidence that grapefruit consumption can lower cholesterol in young people. The net effect on demand from these two findings

cannot be determined because they have opposite effects on demand

Consider the market for smartphones. Explain whether the following event would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied: There is a decrease in the market demand for smartphones. This will cause a(n) Equilibrium quantity would ___. Equilibrium price would ___.

decrease in quantity supplies, decrease, decrease

Consider the market for economics textbooks. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied: Publishers expect that the market price of economics textbooks will increase next month. This will cause a(n)

decrease in supply

Consider the market for economics textbooks. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied: The market price of editorial services increases. This will cause a(n)

decrease in supply

Consider the market for smartphones. Explain whether the following event would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied: The price of machinery used to produce smartphones increases. This will cause a(n) Equilibrium quantity would ___. Equilibrium price would ___.

decrease in supply, decrease, increase

According to the​ text, firms encounter rising costs when they attempt to produce more in the same time period. As a​ consequence, they must be offered a higher price to be willing to incur these higher costs. The resulting relationship between price and quantity supplied is

direct (or positive) and is called the law of supply

According to the law of supply, price and quatntity are _____ related.

directly

If the demand and supply curves increase (shift outward) by identical proportions then

equilibrium price stays the same and quantity rises.

Consider the market for economics textbooks. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied: The market price of economics textbooks increases. This will cause a(n)

increase in quantity supplied

Consider the market for economics textbooks. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied: The number of publishers of economics textbooks increases. This will cause a(n)

increase in supply

Consider the market for smartphones. Explain whether the following event would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied: The number of manufactures of smartphones increases. This will cause a(n) Equilibrium quantity would ___. Equilibrium price would ___.

increase in supply, increase, decrease

Consider the market for smartphones. Explain whether the following event would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied: The price of touch screens used in smartphones declines. This will cause a(n) Equilibrium quantity would ____. Equilibrium price would ___.

increase in supply, increase, decrease

The law of supply then implies that a _________ the supply curve occurs due to a change in market price.

movement along

According to the law of supply, when prices increase, the quantity supplied _____.

increases

According to the example in the​ book, medical research has shown that grapefruit juice can adversely affect the effectiveness of certain medications. This is likely to affect the demand for grapefruit because

people will buy less grapefruit because their tastes and preferences have changed.

The law of supply states that there is a ____ relationship between the price and ____.

positive, the quantity supplied

At the market equilibrium price,

quantity demanded equals quantity supplied.

If the price of flash memory chips used in manufacturing smartphones​ decreases, what will happen in the market for​ smartphones? This would cause smartphone _____ to ____ causing the equilibrium price to ___ and the equilibrium quantity to ___.

supply, increase, decrease, increase

According to the law of supply, as the price decreases,

the quantity produced by firms decreases.