SEction 2 REv quiz

(Figure 7-4: Market for Candies) Equilibrium occurs at a price of ________, and the equilibrium quantity is equal to ________.

P2; Q3

Assume that corn is an input in the production of beef but not in the production of pork. Further, beef and pork are substitutes. A decrease in the price of corn will:

increase the supply of beef and decrease the demand for pork.

The Kansas market for corn is considered a competitive market. This means there are ________ buyers and ________ sellers of corn in Kansas.

many many

Use the "Demand and Supply of Gasoline" Figure 7-1. When the supply curve shifted from S1 to S2, the new intersection of supply and demand has a price of ________ and quantity of 400. This could have resulted from ________.

$1.50; an increase in refining technology

Use the "Supply and Demand in the Orange Juice Market" Figure 7-3. Assume that a hurricane damages the Florida orange crop. In response, what would be the most likely equilibrium point in the orange juice market illustrated?

A

Use the "Supply and Demand in the Orange Juice Market" Figure 7-3. A reputable scientist asserts in a major scientific publication that drinking orange juice will increase your life span. We can expect the new equilibrium point in the orange juice market to be at:

B

Use the "Demand and Supply of Gasoline" Figure 7-1. What might cause the supply curve to shift from S2 back to the initial supply curve S1?

The Organization of Petroleum Exporting Countries (OPEC) restricts the production of crude oil.

In the market for corn tortilla chips, what would definitely cause a price increase?

There is a fungus that kills much of the corn crop in Nebraska.

A decrease in supply means:

a shift to the left of the entire supply curve.

Which of the following will result in an increased price of milk?

a shift to the right of the demand curve for milk

Use the "Demand and Supply of Gasoline" Figure 7-1. Given the equilibrium after a change in supply from S1 to S2:

at the old price of $2.50, there will be pressure for the price to fall.

Which of the following factors cause a movement along the demand curve for good X?

change in the price of good X

Use the "Supply and Demand in the Orange Juice Market" Figure 7-3. Suppose most people only drink orange juice with champagne. What will be the new equilibrium point in the orange juice market if a law banning alcohol passes?

d

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

decrease the demand for good A.

If goods A and Z are complements, an increase in the price of good Z 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.

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

downward movement along the supply curve of eggs.

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

greater quantity of eggs demanded.

A shift of a demand curve to the right, all other things unchanged, will:

increase equilibrium price and quantity.

If the price of good X increases, you would expect the:

quantity of good X supplied to increase.

vWhen the price of lamps increases, the:

quantity supplied increases.

A direct relationship between price and quantity is represented by:

supply cruve

You notice that the price of DVD players falls and the quantity of DVD players sold increases. This set of observations can be the result of the:

supply of DVD players shifting to the right.

A good is inferior if:

when income increases, the demand decreases. `

A good is normal if:

when income increases, the demand increases.