Marianna Sidoryanskaya Macroeconomics Quiz 3
Other things being equal, an increase in the price of a good leads to an increase in the amount produced. This is known as
the law of supply.
Adding the quantities demanded by all consumers at every price will yield
the market demand curve.
There will be an increase in supply when
there is an improvement in technology.
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.
1) Suppose that the price of a jar of peanut butter is $10 and the price of a jar of jelly is $6. What is the relative price of a jar of peanut butter? 2) What is the relative price of a jar of jelly?
1) 1.667 2) 0.600
Suppose that in a recent market period, an industrywide survey determined the following relationship between the price of prerecorded movie Blu-rays and the quantity supplied and quantity demanded. ____________________________________________________________________________________ Price----------Quantity Demanded--------Quantity Supplied $19-------------100 million----------------------40 million----- $20-------------90 million-----------------------60 million---- $21--------------80 million-----------------------80 million---- $22--------------70 million-----------------------100 million--- $23--------------60 million-----------------------120 million--- ____________________________________________________________________________________ 1) What is the equilibrium price _____ 2) What is the equilibrium quantity? _____ million units 3) If the industry price of DVDs is $2020, there is a _____ 4) How much is the shortage or surplus? _____ million units
1) 21 2) 80 3) shortage 4) 30
The following table gives the demand and supply schedules for widgets ____________________________________________________________________________________ Price -----Quantity Demanded----Quantity Supplied $40-----------140-----------------------245----------- $35-----------160-----------------------230----------- $30-----------180-----------------------215------------ $25------------200----------------------200------------ $20------------220----------------------185------------- ____________________________________________________________________________________ 1) The equilibrium price in this market is $ 2) The equilibrium quantity in this market in _____ units 3) If the price in this market was $3535, there would be a _____ of ______ units
1) 25 2) 200 3) surplus; 70
1.) Using the multipoint curve drawing tool, draw and label the new demand curve for movie DVDs. Properly label this line. 2.) Using the point drawing tool, indicate the new equilibrium point. Label it 'E1'. ____________________________________________________________________________________ Demand has______ 1. What is the new equilibrium price? $ _____ 2. What is the new equilibrium quantity? _____ million units. 3. If a change in ceteris paribus condition described below could cause the demand to increase, indicate 'yes'. Otherwise, indicate 'no'. 4. An increase in the number of buyers. 5. A decrease in the cost of production. 6. Consumer incomes decrease (DVDs are a normal good). 7. The price of movie downloads rise 8. The number of sellers increases.
1. increased 2. 22 3. 110 4. yes 5. no 6. no 7. yes 8. no
1) The law of supply states that there is a _____ relationship between the price and _____ 2) Thus, as the price decreases, 3) According to the law of supply, as the price of the good decreases, it causes
1. positive; the quantity supplied 2. the quantity produced by firms decreases 3. a movement downward along the supply curve.
Market place: A-----B-----C-----D--- _______7__________3-------4-----7-----8---- ___________________________________________________________________________________ The table above indicates the demand schedules for four types of consumers. Suppose there are 8,000 consumers, evenly divided between the four types of customers above (A−D). The quantity demanded at a price of $7 is
40000
If the price of airline travel in Europe falls and the demand for train travel in Europe also falls, then the two goods are
substitutes.
The following table indicates the demand schedules for four types of consumers: A, B, C, and D and the number of consumers in each group (top row). The quantity demanded by each type of consumer (QA, QB, QC, and QD) is shown for market prices ranging from $10 down to $4. What is the combined quantity demanded at a market price of $5?
83000
In the market for flash memory drives, indicate whether the following events would cause an "increase or a decrease in demand" or an "increase or a decrease in the quantity demanded." ____________________________________________________________________________________ A) There are increases in the prices of storage racks and boxes used to store flash memory drives. -Equilibrium quantity would ______ Equilibrium price would _____ ------------------------------------------------------------------ B)There is a decrease in the price of computer drives that read the information contained on flash memory drives. -Equilibrium quantity would ______ Equilibrium price would _____ ------------------------------------------------------------------ C)There is a dramatic increase in the price of secure digital cards that, like flash memory drives, can be used to store digital data. -Equilibrium quantity would ______ Equilibrium price would _____ ------------------------------------------------------------------ D) A booming economy increases the income of the typical buyer of flash memory drives (this is a normal good). -Equilibrium quantity would ______ Equilibrium price would _____ ------------------------------------------------------------------ E) Consumers of flash memory drives anticipate that the price of this good will decline in the future. -Equilibrium quantity would ______ Equilibrium price would _____
A) decrease in demand.; decrease & decrease B) increase in demand.; increase & increase C) increase in demand; increase & increase D) increase in demand; increase & increase E) decrease in demand; 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. ____________________________________________________________________________________ A)The market price of paper increases. This will cause a(n) ____________________________________________________________________________________ B) The market price of economics textbooks increases. This will cause a(n) ____________________________________________________________________________________ C) The number of publishers of economics textbooks increases. This will cause a(n) ____________________________________________________________________________________ D) Publishers expect that the market price of economics textbooks will increase next month. This will cause a(n) ____________________________________________________________________________________
A) decrease in supply. B) increase in quantity supplied. C) increase in supply. D) decrease in supply.
Which of the following is consistent with the law of supply?
An increase in the market price of MP3 players causes an increase in the production of MP3 players
Which of the following represents the law of supply?
An increase in the price of a good causes an increase in the quantity supplied of that good.
According to the figure at right, a shortage is shown between which two points? A) A and B B) A and E C) E and F D) C and B
C) E and F
Which of the following situations could generate a shortage?
Demand for a good increases, but the price is not permitted to rise.
Money Prices ----------------------------------------------- ............................................2003...................2004 Hospital Room__________$250__________$275 hotel Suite________________$350__________$375 ___________________________________________________________ Based on the table above, which of the following is true?
The money prices of both goods increased, the relative price of hospital rooms increased, and the relative price of hotel suites decreased. Both increased! 250/350=.714 275/375=.733 Relative Price for Hospital: 350/250=1.4 (Increased) Relative Price for Hotel: 375/275=1.36 (Decreased)
Which of the following is an example of the law of supply?
The price of gum has increased so producers are making more gum
Last year, the price of chicken was $6 per pound and the price of fish was $7 per pound. This year, the price of chicken is $10 per pound and the price of fish is $11 per pound. All other things equal, and assuming that Brian purchased both items before, what would you expect to happen to his purchases of chicken (relative to fish) this year?
The relative price of chicken has increased, so Brian would be expected to purchase less.
Consider the market for laptop computers. Click on the graph to the right to determine how the following event will impact this market. Do this by illustrating the event on the graph and then assess its impact on the equilibrium quantity and the market price. Event: The price of machinery used to produce laptop computers decreases
The supply increases, causing the equilibrium quantity to rise and the market price to fall.
What happens as the result of a shortage?
There is upward pressure on prices.
The effects of a per-unit tax imposed on sales of an industry's product would likely include
a leftward shift of the market supply curve for the product.
Any improvement in overall production technology that permits more output to be produced with the same level of inputs causes
a rightward shift of the supply curve so that more is offered at each price.
All of the following will decrease the supply of train trips except
a technological change that makes trains safer and more fuel-efficient.
In deriving the demand schedule for a good, economists assume that
all other influences on demand except the product price are held constant.
If the price of an item can freely adjust, a market will
always move towards equilibrium.
The law of supply states that
as price increases, quantity supplied increases, all other things equal.
Morgan graduates from college and gets a job paying $50,000 a year. While in school, she consumed 4 pounds of chicken and 1 pound of shrimp a month. After she starts work, she consumes 2 pounds of chicken and 3 pounds of shrimp a month. If everything else is held constant, we know that
chicken is an inferior good and shrimp is a normal good for Morgan.
If Apple's iTunes Music Store increases its "fee" for its music services, the law of demand predicts
downloads would decrease.
Another name for a surplus is
excess quantity supplied.
Other things being constant, the only way to move along a given supply curve for a product is for
he product's relative price to change.
Total market demand can be calculated by
horizontally summing individual demand curves at each and every price level.
Graphically, the market supply curve is obtained by
horizontally summing quantity supplied at various prices for individual producers
A subsidy to carrot farmers will
increase the supply of carrots.
A change in quantity demanded
is a movement along the demand curve.
The law of demand
is supported by observations of human behavior in the marketplace.
The graph on the right shows the supply of automobiles. Suppose that there is an increase in the number of firms in the market. Using the line drawing tool, show the effect on the current supply curve. Label your new curve 'S2'.
just draw a line under the current line of the same line format
The law of demand is based on the observation that
people buy more of a product when the price falls.
The supply curve has a
positive slope.
All of the following are non-price determinants of demand EXCEPT
price of raw materials used in production of the good.
At the market equilibrium price,
quantity demanded equals quantity supplied.
If the price of a product increases, we would expect
quantity supplied to increase
If goods X and Y are substitute goods, then an increase in the price of Y, other things constant,
results in a decrease in the quantity of Y consumed, but increases the demand for X.
The supply curve will shift to the left when
some producers leave the industry.
Which of the following are complementary goods?
sport utility vehicles and gasoline