econ hw 2

during the recession of 07-09, despite falling income levels, mcdonald's experienced increased sales. the increase in demand for big macs despite the decline in income indicates that big macs are considered

inferior goods

T/F: if the demand for a product increases and the supple of the same product increases, the equilibrium price will increase

false

T/F: if the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase

false

T/F: market equilibrium occurs where supply equals demand

false

if the price of automobiles was to increase, then

the demand for gasoline would decrease

select the phrase that correctly completes the following statement. "a positive change in technology caused an increase in the supply of flat screen tvs. as a result ___."

the price of the flat-screen televisions decreased and the quantity demanded of flat-screen televisions increased

What is the difference between an "increase in supply" and an "increase in quantity supplied"?

An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" refers to a movement along a given supply curve in response to an increase in price

last year, the pottery palace supplied 8000 ceramic pots at $40 each. this year, the company supplied the same quantity of ceramic pots at $55 each. based on this evidence, the pottery palace has experienced

a decrease in supply

which of the following will shift the demand curve for a good

a decrease in the price of a complementary goof

in an increase in income leads to an increase in demand for peanut butter, then peanut butter is

a normal good

what is the difference between an "increase in demand" and an "increase in quantity demanded"?

an "increase in demand" is represented by a rightward shift of the demand curve while and "increase in quantity demanded" is represented by a movement along a given demand curve

which of the following would cause both the equilibrium price and equilibrium quantity of cotton (normal good) to increase?

an increase in consumer income

if an increase in income leads to a decrease in the demand for popcorn, then popcorn is

an inferior good

which of the following is the correct way to describe equilibrium in a market

at equilibrium, quantity demanded equals quantity supplied

T/F: scarcity is defined as the situation that exists when the quantity demanded for a good is greater than the quantity supplied

false

a successful marketing campaign will increase the demand for red bull. this will ___ the equilibrium price and ___ the equilibrium quantity of red bull

increase; increase

olive oil producers want to sell more olive oil at a higher price. which of the following events would have this effect

research finds that consumption of olive oil reduces the risk of heart disease

prices of cali merlot wine (normal good) have risen steadily in recent years. over this same period, prices for french oak barrels used for wine storage have dropped and consumer incomes have risen. which of the following best explains the rising prices of cali merlots?

the demand curve for merlot has shifted to the right more than the supply curve has shifted to the right

the internet has created a new category in the book selling market, namely, the "barely used" book. how does the availability of barely used books affect the market for new books?

the demand curve for new books shifts to the left

technological advances have resulted in lower prices for digital cameras. what is the impact of this on the market for traditional cameras

the demand curve for traditional cameras shifts to the left

positive technological change in the production of lcd televisions caused the price of lcd televisions to fall. holding everything else constant, how would this affect the market for blu-ray players (a complement to lcd tvs)

the demand for blu-ray players would increase and the equilibrium price of blu-ray players would increase

a change in all of the following variables will change the market demand for a product except

the price of the product

the popularity of digital cameras has enticed large discount stores like walmart and costco to offer digital photo printing services. how does this affect the digital photo printing market?

the supply curve for digital photo printing services shifts to the right

in oct 2005, the US fish and wildlife service banned the importation of beluga caviar, the most prized of caviars, from the caspian sea. what happened in the market for caviar in the US?

the supply curve shifted to the left

T/F: an increase in demand causes a change in equilibrium price; the change in price does not cause a further change in demand or supply

true

T/F: as the number of firms in a market decreases, the supply curve will shift to the left and the equilibrium price will rise

true

T/F: if the demand curve for a product shifts to the left and the supply curve for the product shifts to the left, the equilibrium quantity will decrease

true