supply/ demand macro

A leftward shift of the supply curve for computers could be caused by which of the following in the short run? A A decrease in the number of computer manufacturers B A decease in taxes on computer manufacturers C A decrease in the price of computers D A decrease in the price of components used to assemble computers E An increase in the price of mobile devices, a substitute good

A

The diagram above shows two demand curves for video games identified as D1 and D2. Which of the following changes will most likely cause a shift of the demand curve from D1 to D2 as shown in the diagram? A An increase in consumers' income, assuming that video games are a normal good B An increase in the price of game consoles, a complementary good C A decrease in the price of mobile games, a substitute good D A decrease in the number of buyers in the market E A decrease in the price of video games

A

Law of Supply

An increase in the number of sellers will increase the supply of a good, decrease in sellers means decrease in supply (directly related)

If the wage rate of workers producing a good decreases, then which of the following will most likely occur? A The demand curve will shift to the right. B The supply of the good will increase. C The quantity supplied of the good will decrease. D Demand for the good will increase E Quantity demanded for the good will decrease.

B

Which of the following changes will most likely result in a movement from point X to point Y along the demand curve D1 ? A A decrease in the number of buyers B A decrease in the price of video games C A decrease in the expected future price of video games D An increase in the negative effects of video games on players E An increase in the use of video games for educational purposes

B

At a price of P2 in the diagram above which of the following will happen in the market? A There will be a surplus of 30 units and 90 units will be exchanged. B There will be a surplus of 90 units and 30 units will be exchanged. C There will be a surplus of 60 units and 30 units will be exchanged. D There will be a shortage of 90 units and 30 units will be exchanged. E There will be a shortage of 30 units and 90 units will be exchanged.

C

If the production technology of a good improves and at the same time the number of consumers willing and able to buy the good in the market increases, which of the following will definitely occur? A Equilibrium price will increase. B Equilibrium price will decrease. C Equilibrium quantity will increase. D Equilibrium quantity will decrease. E Equilibrium quantity will remain the same.

C

Assume that for consumers, pears and apples are substitutes. It is announced that pesticides used on most apples may be dangerous to consumers' health. As a result of this announcement, which of the following market changes is most likely to occur in the short run in the pear market?

D

The graph above shows the demand for and supply of a good. If the market price is P1, then A there is a shortage, and the price will rise B there is a shortage, and the price will fall C there is a surplus, and the price will rise D there is a surplus, and the price will fall E demand will decrease and supply will increase

D

The supply (S) and demand (D) for a good are shown in the diagram above. At a price of P0 in the diagram above, which of the following is true? A The existing surplus in the market will cause upward pressure on prices until equilibrium is reached at 75 units. B The existing surplus in the market will cause downward pressure on prices until equilibrium is reached at 60 units. C The existing shortage in the market will cause upward pressure on prices until equilibrium is reached at 30 units. D The existing shortage in the market will cause upward pressure on prices until equilibrium is reached at 60 units. E The existing shortage in the market will cause downward pressure on prices until equilibrium is reached at 45 units.

D

Which of the following describes the law of supply? A An increase in the price of a good will decrease the quantity demanded. B The price of a good will increase if production input costs increase. C An increase in taxes will decrease the supply of a good. D An increase in the number of sellers will increase the supply of a good. E An increase in the price of a good will increase the quantity supplied.

E

What is supply?

Producers willingness and ability to sell a good/service

Which of the following is true about a floor price?

To be an effective floor price, it must be set above the equilibrium price

What is demand?

a consumer's desire and willingness to pay a price for a specific good or service

Law of Demand

higher price of a good means lower quantity and lower price means higher quantity of a good (inversely related)

Changes in Demand

increase or decrease in demand changes curve (more or less quantity demanded)

Changes in Supply

increase or decrease in supply changes curve (more and less quantity supplied )

N.I.C.E.J.A.G (supply)

n- natural/ manmade resources i- input cost c- competition e- expectations j- joint supply goods profit a- alternative goods profit g- government regulations

The table above shows the quantity demanded and quantity supplied for bushels of wheat at various prices. Which of the following combinations is the equilibrium price and quantity for wheat?

price: 1.50 bushels: 20,000

If labor costs rise in the automobile industry, which of the following will happen to car prices and the quantity of cars sold?

price: increase quantity sold: decrease

If one-fourth of a nation's wheat crop is destroyed by a flood in a given season, then the price of wheat and the quantity sold will change in the short run in which of the following ways?

price: increase quantity: decrease

A simultaneous increase in both the demand for and the supply of a good in a market will lead to which of the following changes in the equilibrium price and quantity of the good?

price: indeterminate quantity: increase

Three reasons for law of demand

substitution/ complement effect, income effect, diminishing marginal utility

Which of the following changes in the supply of and the demand for a good will definitely result in a decrease in both the equilibrium price and quantity of the good?

supply: no change demand: decrease

T.R.I.P.E. in demand

t- tastes/ preferences r- related goods i- income of consumers p- population e- expectations for future price

When the govt taxes suppliers for the goods they sell, what effect does it have on the market?

the supply curve shifts inwards