Supply and Demand

A likely example of complementary goods for most people would be

Chips and salsa

Which of the following demonstrates the law of demand?

Dave buys more donuts at .25 per donut than at .50 per donut, other things equal

Suppose you like to make, from scratch, pies filled with banana cream and vanilla pudding. You notice that the price of bananas has increased. As a result, your demand for vanilla pudding would

Decrease

Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous

Pizza is a normal good if the demand

For pizza rises when income rises

If a good is normal, then an increase in income will result in

Increase in the demand for the good

During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains the decrease in production?

Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the equilibrium price of beef, making it less attractive to produce

Currently you purchase ten frozen per month. You will graduate from college in December, you will start a new job in January. You have no plans to purchase frozen pizzas in January. For you, frozen pizzas are a(n)

Inferior good

A decrease in demand is represented by a

Leftward shift of a demand curve

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy

A likely example of substitute goods for most people would be

Pencils and pens

The demand curve for a good is a line that relates

Price and quantity demanded

Pens are normal goods. What will happen to the equilibrium price of pens if the price of pencils rises, consumers experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to rise in the near future, the population increases, fewer firms manufacture pens, and the wages of pen-makers increase?

Price will rise

The market demand curve

Represents the sum of the quantities demanded by all the buyers at each price of the good

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

Result in a movement along a stationary supply curve

A decrease in quantity demanded

Results in a movement upward and to the left along a demand curve

You wear either shorts or sweatpants every day. You notice that sweatpants have gone on sale, so your demand for

Shorts will decrease

What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

The price change will be ambiguous

Assume a market is perfectly competitive. When a new producer enters the market,

The price in the market does not change

When quantity demanded has increased at every price, it might be because

The price of a complementary good has decreased

The quantity demanded of a good is the amount that buyers are

Willing and able to purchase

Which of the following changes would not shift the supply curve for a good or service

a change in the price of the good or service

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

a decrease in consumer income

Suppose scientists provide evidence that chocolate pudding increases the bad cholesterol levels of those who eat it. We could expect to see

a decrease in the demand for chocolate pudding

A supply curve slopes upward because

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

Today, producers changed their expectations about the future. This change

can affect today's supply

An improvement in production technology will

decrease a firm's costs and increase its supply

Suppose buyers of computers and printers regard the two goods are complements. Then an increase in the price of computers will cause a(n)

decrease in the demand for printers and a decrease in the quantity supplied of printers

An early frost int he vineyards of Napa Valley would cause a(n)

decrease in the supply of wine, increasing the price

Suppose the income of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous

Suppose the income of buyers in a market for particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous

Suppose the number of buyers in a market increase and a technological advancement occurs also. What would we expect to happen in the market?

equilibrium quantity would increase, but the impact of equilibrium price would be ambiguous

Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor Toysorama is mass producing an excellent copy and plans to flood the market with their $5 doll in 6 weeks. Funsters should increase the supply of their doll now before the other doll hits the market

increase the supply of its doll now before the other doll hits the market

You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut butter

increases today

When a surplus exists in a market, sellers

lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

non of the above is necessarily correct

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

price would fall, and the effect on quantity would be ambiguous

The market supply curve

represents the sum of the quantities supplied by all the sellers at each price of the good

An increase in quantity supplied

results in a movement upward and to the right along a fixed supply curve

Suppose there is an increase in the price of steel. We would expect the supply curve for steel beams to

shift leftward

Matthew bakes apple pies that he sells at the local farmer's market. If the price of apples increases, the

supply curve for Matthew's pies will decrease

Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the

supply of bicycles will shift to the left

Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the

supply of flour to increase

What would happen to the equilibrium price and quantity of lattes if the cost of producing steamed milk, which is used to make lattes, rise?

the equilibrium price would increase, and the equilibrium quantity would decrease

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

the ticket price is above the equilibrium price

Which of the following demonstrates the law of supply

when ketchup prices roses, ketchup sellers increased their quantity supplied of ketchup