HW Ch.4

Which of the following is likely to lead to a rightward shift in the supply curve of​ cotton?

An increase in labor productivity due to training programs

Which of the following is not one of the four major factors that shifts the supply curve when it​ changes?

Anything other than these:1. Prices of inputs used to produce a good2. Technology used to produce a good3. Number and scale of sellers4.​ Sellers' beliefs about the future

the price of anti-venom serum, sold to those with snake bites, increased from $45 to $52, but consumption has still remained the samein this situation, the Law demand The demand curve for anti - venom serum is a drought in the grape regions of the country increases the cost of producing jelling

Does not hold, since the product sold is required for survival, so increasing the price did not affect consumption Near vertical, since even if the price rises bite victims will be willing to buy the same quantity Holds, since the demand curves for both jelly and peanut butter are downward-sloping; it is their shifts that are determing the impact on the quantity consumed

If the demand for gem−quality diamonds decreases AND the supply of gem−quality diamonds​ decreases, what can be said about equilibrium price and quantity in this​ market?

Equilibrium quantity will​ fall, but the change in equilibrium price is uncertain.

Which would be the correct sequence of events in the speedboat industry if waterway access was improved​ and, at the same​ time, a lighter polymer became available that increased production​ efficiency?

Supply would shift​ right, demand would shift​ right, equilibrium price would be​ indeterminable, and equilibrium quantity would increase.

All else being equal, an increase in the price of Nike Air Jordan XXXI Fly Low shoes will cause an ________.

Increase in quantity supplied

The development of genetically modified soybean seeds such as Roundup Ready seeds lowered tillage costs for soybean growers. How will this technological advance affect the supply of​ soybeans?

Increase in supply

If the current market price of wheat in the United States is​ $6 per bushel and the federal government sets the maximum price of wheat at​ $4 per​ bushel, what happens to the market price and quantity of wheat in the U.S. wheat​ market?

The market price of wheat falls and the quantity traded falls.

The competitive equilibrium price equates

quantity demanded and the quantity supplied. When prices are not free to fluctuate, markets fail to equate quantity demanded and quality supplied. A group of economic agents who are trading a good or service, and the rules and arrangements for trading.

Given the supply and demand curves on the​ right, when the price of the good is​ $20, we say that the market is in _______________. At this​ price, we know that the quantity supplied is ______________ the quantity demanded.

competitive equilibrium; equal to

If the government sets a minimum wage for seasonal workers, then the supply curve for sparkling wine would ______

decrease (shift left)

If widespread unemployment leads to a drop in incomes, then the demand for the Toyota Rav4 SUV would​ __________.

decrease (shift left)

Read the story to the​ right, and then answer the following​ questions: Based on what happened at the Richmond​ event, it is apparent that at a price of​ $50, the quantity​ _________ of laptops exceeded the quantity​ _________. This resulted in an excess​ _________ for laptops. Which of the following ways of distributing the laptops would be more​ efficient? ​(Check all that apply.​)

demanded; supplied; demand Using flexible​ prices, so those who value the laptop more would pay more for it. This is the correct answer. AND Using a random lottery to decide who gets the laptops.

If the only change in the market was that the price increased to​ $30, then we know that the quantity supplied will be ________________ the quantity​ demanded, resulting in ________________, which is also known as _____________

greater than; an excess supply; a surplus

For a trade to take​ place, a​ buyer's willingness to pay must be​ ____________.

higher than the​ seller's willingness to accept. AND equal to the​ seller's willingness to accept.

As a firm produces more of a​ good, the cost of producing each additional unit ____________ This implies that the marginal cost of producing a good ____________ as you make more of that good.

increases; increases

Suppose instead that the price of the good dropped below the competitive equilibrium price to a price of​ $15 per unit. If this were to​ occur, then the quantity supplied would be ______________the quantity​ demanded, resulting in _______________ ​, which is also known as ______________

less than; an excess demand; a shortage

Assume that a seller in a perfectly competitive market charges more than the equilibrium price. It is likely that this seller will​ ________.

lose almost all of his buyers

Suppose a new​ off-campus university apartment complex could rent its rooms on the open market for​ $900 a month. ​If, instead, the university chooses to cap the price of rooms to​ $500 a month for​ students, the result would be that​ ____________. Suppose the university is trying to determine the most efficient way to allocate the rooms such that those who value the rooms the most get them. Which of the following would you suggest as the most​ efficient?

quantity demanded would exceed the quantity​ supplied, resulting in a shortage. Auctioning the rooms to the highest bidders.

Consider a market where the demand curve is downward sloping and the supply curve is upward sloping​ (so they are neither vertical nor​ horizontal). If the​ consumers' willingness to pay for the hundredth unit is​ $7.00 and the​ seller's willingness to accept for the hundredth unit is​ $10.00, then the equilibrium​ ________.

quantity is less than 100 units

Coffee and tea are likely __________ because an increase in the price of coffee ________ the demand for tea

substitutes, increases

The supply curve represents​ ___________.

the minimum price sellers are willing to accept to sell an extra unit of a good.

Which of the following is not one of the five major factors that shifts the demand curve when it​ changes?

the price of the good itself

The lowest price that a seller is willing to receive to sell an extra unit of a good is called _____________ ​, while the highest price that a buyer is willing to pay for an extra unit of a good is called _____________

willingness to accept; willing to pay

In​ 2007, an unseasonably dry spring led to a sharp decline in the quantity harvested of black​ morels, a wild mushroom found throughout the upper Midwest. Due to the scant​ harvest, the price of black morels rose from​ $9 per pound to nearly​ $45 per pound. In​ 2008, slightly above−normal rainfall levels led to a large black morel harvest. Assuming that the demand for black morels did not change from 2007 to​ 2008, we would expect the 2008 black morel supply to​ ________ and the equilibrium price of black morels to​ ________.

​increase; fall