ECO 201 Ch 4

Which of the four panels represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester?

Panel (a)

Suppose that the federal government is concerned about obesity in the United States. Congress is considering two plans. One would require "junk food" producers to include warning labels on all junk food. The other would impose a tax on all products considered to be junk food. We could illustrate the tax as producing a movement from

Point A to Point C in Panel 2.

The two words most often used by economists are

supply and demand.

Suppose Phil and Miss Kay are the only consumers in the market. If the price is $12, then the market quantity demanded is

2 units.

What is the equilibrium quantity in this market?

2.5 units

If the market consists of Michelle and Laura only and the price falls by $1, the quantity demanded in the market increases by

3 units.

If the market consists of Michelle, Laura, and Hillary and the price falls by $1, the quantity demanded in the market increases by

5 units.

Suppose the market consists of Adam and Barb only. If the price rises by $2, the quantity demanded in the market falls by

6 units.

Which combination would produce an increase in equilibrium quantity and an indeterminate change in equilibrium price?

A

Which of the following events would unambiguously cause an increase in the equilibrium price of cotton shirts?

An increase in the price of wool shirts and an increase in the price of raw cotton

Which of these statements does not apply to market economies?

Prices ensure that anyone who wants a product can get it.

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?

Quantity will fall, and the effect on price is ambiguous.

Which of the following events would cause a movement downward and to the left along the supply curve for mangos?

The price of mangos falls.

The demand for a good or service is determined by

those who buy the good or service.

If macaroni and cheese is an inferior good, then an increase in

a consumer's income will cause the demand curve for macaroni and cheese to shift to the left.

Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for tennis balls in the United States?

a decrease in the number of people in the United States under age 70

If toast and butter are complements, then which of the following would increase the demand for toast?

a decrease in the price of butter

A supply curve slopes upward because

an increase in price gives producers an incentive to supply a larger quantity.

A decrease in input costs to firms in a market will result in a(n)

decrease in equilibrium price and an increase in equilibrium quantity.

The shift from S to S' in the market for peaches could be caused by a(n)

decrease in the labor costs of the workers who pick peaches.

An early frost in the vineyards of Napa Valley would cause a(n)

decrease in the supply of wine, increasing price.

At a price of $35, there would be

excess supply, and the price would tend to fall from $35 to a lower price.

A rightward shift of a demand curve is called a(n)

increase in demand.

A decrease in the price of a good would

increase the quantity demanded of the good.

Elena loves orange juice. She reads in the newspaper that 20 percent of the Florida orange crop was destroyed by a late spring frost. Economists predict that the price of oranges will rise by 50 percent by the end of the year. As a result, Elena's demand for orange juice

increases today.

A group of buyers and sellers of a particular good or service is called a(n)

market.

The term price takers refers to buyers and sellers in

perfectly competitive markets.

Suppose John and Wayne are the only two demanders of cowboy movies. Each month, John buys six cowboy movies when the price is $10 each, and he buys four cowboy movies when the price is $15 each. Each month, Wayne buys four cowboy movies when the price is $10 each, and he buys two cowboy movies when the price is $15 each. Which of the following points is on the market demand curve?

quantity demanded = 10; price = $10

Holding the nonprice determinants of demand constant, a change in price would

result in a movement along a stationary demand curve.

A decrease in quantity demanded

results in a movement upward and to the left along a demand curve.

In markets, prices move toward equilibrium because of

the actions of buyers and sellers.

A decrease in the number of sellers in the market causes

the supply curve to shift to the left.

A university's football stadium is never more than half-full during football games. This indicates

the ticket price is above the equilibrium price.

When the price of a good or service changes,

there is a movement along a given supply curve.

All else equal, the premature deaths of thousands of turkeys would cause a move from

x to y.