Microeconomics Chapter 3: Where Prices Come From: The Interaction of Demand and Supply (Exam)
At a price of $10, how many units will be sold?
200
If, in response to an increase in the price of chocolate, the quantity of chocolate demanded decreases, economists would describe this as...
A decrease in quantity demanded
Which of the following will shift the demand curve for a good?
A decrease in the price of a complementary good
Farmers can plant either corn or soybeans in their fields. Which of the following would cause the supply of soybeans to increase?
A decrease in the price of corn
If an increase in income leads to an increase in the demand for peanut butter, then peanut butter is...
A normal good
In a free market such as that depicted above, a surplus is eliminated by...
A price increase, increasing the quantity supplies and increasing the quantity demanded
In 2004, hurricanes damaged a large portion of Florida's orange crop. As a result of this, many orange growers were not able to supply fruit to the market. After the hurricane, what would we expect to see happen in the market at the pre-hurricane (initial) equilibrium price?
A shortage of oranges
A decrease in the price of the product would be represented by a movement from...
A to B
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 an "increase in quantity demanded" is represented by a movement along a given demand curve.
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 and "increase in quantity supplied refers to a movement along a given supply curve in response to an increase in price
An increase in the demand for lobster due to changes in consumer tastes, accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster, will result in...
An increase in the equilibrium price of lobster; the equilibrium quantity may increase or decrease
The law of demand implies, holding everything else constant, that...
As the price of bagels increase, the quantity of bagels will decrease
Which of the following is the correct way to describe equilibrium in a market?
At equilibrium, quantity demanded equals quantity supplied
A decrease in the price of the product would be represented by a movement from...
B to A
Assume that both the demand and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve. As a result...
Both the equilibrium price and quantity of MP3 players will increase
Elvira decreased her consumption of bananas when the price of peanut butter increased. For Elvira, peanut and bananas are...
Complements in consumption
Let D=demand, S=supply, P=equilibrium price, Q=equilibrium quantity. What happens in the market for walnuts if the Centers for Disease Control and Prevention announces that consuming a half cup of walnuts each week helps to lower bad levels of cholesterol?
D increases, S no change, P and Q increase
A decrease in the price of a complementary good would be represented by a movement from...
D1 to D2
An increase in population would be represented by movement from...
D1 to D2
If the product represented is an inferior good, an increase in income would be represented by a movement from...
D2 to D1
If a demand curve shifts to the right, then...
Demand has increased
If the Apple iPhone and the Samsung Galaxy are considered substitutes, then, other things equal, an increase in the price of the iPhone will...
Increase the demand for the Galaxy
The demand by all the consumers of a given good or service is the _________ for the good or service.
Market demand
Refer to the diagrams above. Assume that the graphs in this figure represent the demand and supply curves for bicycle helmets. Which panel best describes what happens in this market if there is a substantial increase in the price of bicycles?
Panel D
If, for a product, the quantity supplies excess the quantity demanded, the market price will fall until...
Quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.
Let D=demand, S=supply, P=equilibrium price, Q=equilibrium quantity. What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged?
S decreases, D no change, P increases, Q decreases
An increase in price of inputs would be represented by a movement from...
S2 to S1
The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D1 and S2 (point B). If there is a decrease in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar - sweetened soft drinks, how will the equilibrium point change?
The equilibrium point will move from B to C
A change in all of the following variables will change the market demand for a product except...
The price of the product
If in a market for peaches, the supply curve has shifted to the left,...
The supply of peaches has decreased
At a price of $15...
There would be a shortage of 4 units
If the price is $10,...
There would be a shortage of 600 units