ECON - 2301.301 Chapter 3 Quiz
(Exhibit: Demand and Supply of Gasoline) When the supply curve shifted from the initial equilibrium to the new intersection of supply and demand at a price of ________ and quantity of 400, this could have resulted from ________.
$1.50; an improvement in refining technology
(Exhibit: The Demand for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts increases from 40 cents to 50 cents, Dan will reduce his quantity demanded from 160 bags to 140 bags due to:
the law of demand.
(Exhibit: The Supply of Music downloads) A decrease in the number of websites supplying music downloads would result in a change illustrated by:
the move from p to q in Figure (b).
If demand and supply both decrease:
quantity will go down but the effect on price is indeterminate.
Supply is best defined as the:
relationship between the quantity of a good or service sellers are willing to offer for sale and various prices, all other things unchanged.
In the textbook, the prices of the factors of production, returns from alternative activities, technology, seller expectations regarding future prices, and the number of sellers are called:
supply shifters.
(Exhibit: The Supply of Music Downloads) A decrease in the fee charged for music downloads would result in a change illustrated by the move from:
u to v in Figure (d).
A decrease in supply means:
a shift to the left of the entire supply curve.
(Exhibit: Demand and Supply of Gasoline) The initial price and quantity (at intersection of S1 and D) in equilibrium are:
$2.50 and 300 gallons.
(Exhibit: Demand and Supply of Gasoline) Given the initial equilibrium of S1 and D, any price lower than _____________ will create pressure for the price to ________.
$2.50; rise
(Exhibit: The Demand for Chocolate-Covered Peanuts) If George, Barbara, and Dan are the only three buyers in the market, and the price of a bag of chocolate-covered peanuts is 80 cents, the total market demand is ________ bags per month.
105
(Exhibit: The Demand for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is 60 cents, the quantity demanded by George is ________ bags per month.
25
(Exhibit: The Demand for Chocolate-Covered Peanuts) If George is only able to purchase 30 bags of chocolate-covered peanuts, the maximum price he is willing and able to pay for each bag is ________ cents.
50
(Exhibit: The Demand for Chocolate-Covered Peanuts) If Barbara is only able to purchase 20 bags of chocolate-covered peanuts, the maximum price she is willing and able to pay for each bag is ________ cents.
70
The price of apples falls. What happens in the market for apple pies?
The equilibrium price falls, and the equilibrium quantity rises.
There is equilibrium in the market when:
a and b are true.
Which of the following would result in a movement along the demand curve?
a change in price
A decrease in supply is caused by:
a decrease in the number of sellers in the market.
Given that meat and potatoes are complementary goods, if the price of meat decreases substantially, there would be:
an increase in the demand for potatoes.
The law of demand is illustrated when:
an increase in the purchases of personal computers results from lower prices.
(Exhibit: Demand and Supply of Gasoline) 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.
(Exhibit: Demand and Supply of Gasoline) A factor that may have changed supply from S1 to S2 is:
better technology in the production of gasoline.
A decrease in the demand for eggs caused by concerns over cholesterol is most likely attributable to which demand shifter?
consumer preferences and information
The relationship between the price of a good and the quantity people are willing and able to purchase is:
demand.
A market surplus occurs if the:
equilibrium price is below the actual price.
