ECON CHP 3 HW

Suppose that the price of a jar of peanut butter is ​$10 and the price of a T−shirt is ​$6. What is the relative price of a jar of peanut butter​? A. 4.000 B. 1.667 C. 16.000 D. 0.600 What is the relative price of a T−shirt​? A. 1.667 B. 16.000 C. 0.600 D. 4.000

B. 1.667 C. 0.600

According to the law of​ demand, the quantity demanded of any commodity is​ ________ related to its​ price, other things being equal. A. positively B. inversely C. proportionately D. directly

B. inversely

Assume that the cost of aluminum used by​ soft-drink companies increases. Indicate which of the following statements describing the resulting effects in the market for soft drinks distributed in aluminum cans are true​ or false​. a. The demand for soft drinks decreases. b. The quantity of soft drinks demanded decreases. c. The supply of soft drinks decreases. d. The quantity of soft drinks supplied decreases.

A. F B. T C. T D. F

What if the increase in demand were larger than the increase in​ supply? A. The equilibrium price and quantity increase. B. The equilibrium price and quantity decrease. C. The equilibrium price decreases and the quantity increases. D. The equilibrium price increases and the quantity decreases.

A. The equilibrium price and quantity increase.

A market demand curve is derived by summing​ (at each​ price) the individual quantities demanded by all buyers in the market. A. True B. False

A. True

A market supply curve is derived by summing the individual​ producers' supply curves. A. True B. False

A. True

The price at which quantity demanded equals quantity supplied and at which the demand curve intersects the supply curve is called the market clearing price. A. True B. False

A. True

The relative price of any commodity is its price in terms of A. another commodity. B. gold. C. dollars. D. foreign currencies.

A. another commodity.

The law of demand states that A. as price​ increases, quantity demanded​ decreases, all other things equal. B. as price​ increases, quantity demanded​ increases, all other things equal. C. supply creates its own demand. D. if supply​ increases, demand will increase to meet supply. E. if​ prices, income, and the price of other goods​ increase, demand will increase.

A. as price​ increases, quantity demanded​ decreases, all other things equal.

According to the​ text, firms encounter rising costs when they attempt to produce more in the same time period. As a​ consequence, they must be offered a higher price to be willing to incur these higher costs. The resulting relationship between price and quantity supplied is A. direct​ (or positive) and is called the law of supply. B. direct​ (or positive) and is called the law of human nature. C. inverse​ (or negative) and is called the law of supply. D. direct​ (or positive) and is called the law of demand.

A. direct​ (or positive) and is called the law of supply.

A shortage occurs when quantity demanded is​ ________ than quantity supplied at a price​ ________ the market clearing price. A. greater; below B. greater; above C. less; below D. less; above

A. greater; below

In the market for wireless earbuds​ (a normal​ good), indicate whether the following events would cause an​ "increase or a decrease in demand​" or an​ "increase or a decrease in the quantity demanded.​" A booming economy increases the income of the typical buyer of wireless earbuds ​(this is a normal good​). A. increase in demand. B. increase in quantity demanded. C. decrease in demand. D. decrease in quantity demanded. Equilibrium quantity would increase. Equilibrium price would increase.

A. increase in demand.

In the market for wireless earbuds​ (a normal​ good), indicate whether the following events would cause an​ "increase or a decrease in demand​" or an​ "increase or a decrease in the quantity demanded.​" There is an increase in the number of consumers of wireless earbuds. A. increase in demand. B. increase in quantity demanded. C. decrease in demand. D. decrease in quantity demanded. Equilibrium quantity would increase. Equilibrium price would increase.

A. increase in demand.

Indicate whether the following events would cause an​ "increase or a decrease in demand" or an​ "increase or a decrease in the quantity demanded​" for​ cable-based Internet access​ service, which is a normal good. Consumers' tastes shift away from using wireless Internet access in favor of​ cable-based Internet access services. A. increase in demand. B. increase in quantity demanded. C. decrease in demand. D. decrease in quantity demanded.

A. increase in demand.

Consider the market for economics textbooks. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. The number of publishers of economics textbooks increases. This will cause​ a(n) A. increase in supply. B. increase in quantity supplied. C. decrease in supply. D. decrease in quantity supplied.

A. increase in supply.

Suppose that the price of a jar of peanut butter is ​$5 and the price of a jar of jelly is ​$3. What is the relative price of a jar of peanut butter​? A. 0.600 B. 2.000 C. 1.667 D. 8.000 What is the relative price of a jar of jelly​? A. 8.000 B. 1.667 C. 0.600 D. 2.000

C. 1.667 C. 0.600

Consider the market for smartphones. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. The number of manufacturers of smartphones increases. This will cause​ a(n) A. increase in supply. B. increase in quantity supplied. C. decrease in supply. D. decrease in quantity supplied. Equilibrium quantity would increase. Equilibrium price would decrease.

A. increase in supply.

Consider the market for smartphones. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. The price of touch screens used in smartphones declines. This will cause​ a(n) A. increase in supply. B. increase in quantity supplied. C. decrease in supply. D. decrease in quantity supplied. Equilibrium quantity would increase. Equilibrium price would decrease.

A. increase in supply.

Consider the following cases. Substitutes or complements? a. If the price of bacon​ rises, and as a result the demand for sausage​ increases, this implies that these two goods are ______________. b. If the price of tennis racquets​ falls, and as a result the demand for tennis balls increases​, this implies that these two goods are ______________. c. If the price of coffee​ rises, and as a result the demand for sugar​ falls, this implies that these two goods are ______________. d. If the price of automobiles falls​, and as a result the demand for motorbikes​ falls, this implies that these two goods are ____________.

A. substitutes B. complements C. complements D. substitutes

Shortages and scarcity are the same thing. A. True B. False

B. False

At a rental rate of​ $600 per​ month, there is an excess quantity demanded. What is the amount of the excess quantity​ demanded? 1500 units. If the present rental rate of​ one-bedroom apartments is​ $600 per​ month, through what mechanism will the rental rate adjust to the equilibrium rental rate of​ $800? A. Since the price is below​ equilibrium, the surplus of apartments will cause the quantity supplied to fall and the quantity demanded to rise. B. Since the price is below​ equilibrium, the shortage of apartments will cause the quantity supplied to rise and the quantity demanded to fall. C. Since the price is above​ equilibrium, the surplus of apartments will cause the quantity supplied to rise and the quantity demanded to fall. D. Since the price is above​ equilibrium, the shortage of apartments will cause the quantity supplied to fall and the quantity demanded to rise.

B. Since the price is below​ equilibrium, the shortage of apartments will cause the quantity supplied to rise and the quantity demanded to fall.

At​ equilibrium, there is neither excess quantity supplied nor excess quantity demanded. A. False B. True

B. True

A supply schedule gives a schedule of​ ________ quantities supplied per time dimension at​ ________. A. alternative; the same price B. alternative; different possible prices C. ​unchanging; the same price D. unchanging; different possible prices

B. alternative; different possible prices

If the demand and supply curves increase​ (shift outward) by identical proportions then A. equilibrium price and quantity both increase. B. equilibrium price stays the same and quantity rises. C. equilibrium price increases but quantity falls. D. equilibrium price and quantity do not change.

B. equilibrium price stays the same and quantity rises.

In the market for wireless earbuds​ (a normal​ good), indicate whether the following events would cause an​ "increase or a decrease in demand​" or an​ "increase or a decrease in the quantity demanded.​" There is a decrease in the price of devices used to charge wireless earbuds. A. decrease in quantity demanded. B. increase in demand. C. increase in quantity demanded. D. decrease in demand. Equilibrium quantity would increase. Equilibrium price would increase.

B. increase in demand.

Consider the market for economics textbooks. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. The market price of economics textbooks increases. This will cause​ a(n) A. increase in supply. B. increase in quantity supplied. C. decrease in supply. D. decrease in quantity supplied.

B. increase in quantity supplied.

If an increase in the price of soft drinks leads to an increase in demand for bottled​ water, the two goods must be A. unrelated. B. substitutes. C. independent. D. complements.

B. substitutes.

Which of the following would cause an increase in the demand for chicken​? A. A decrease in the price of chicken. B. An increase in the number of firms in the market. C. An increase in the price of hamburger​, a substitute for chicken. D. A decrease in consumer incomes ​(chicken is a normal​ good).

C. An increase in the price of hamburger​, a substitute for chicken.

Identify which of the following would generate a decrease in the market demand for​ e-book readers, which are a normal good. I. An increase in the price of downloadable apps utilized to enhance the​ e-book reading​ experience, which are complements. II. An increase in the number of consumers in the market for​ e-book readers. III. A decrease in the price of tablet​ devices, which are substitutes. IV. A reduction in the income of consumers of​ e-book readers. A. Only IV. B. Both III and IV. C. I, III and IV. D. Both I and IV.

C. I, III and IV.

Which of the following is an implication of the law of​ supply? A. Individuals will purchase fewer units at a higher price and more units at a lower price. B. Changes in the price of a good leads to a shift in the supply curve. C. Producers will offer more units at a higher price and fewer units at a lower price. D. Increases in money prices will lead to an increase in supply while increases in relative prices will lead to a decrease in supply. The law of supply then implies that a _______________________ the supply curve occurs due to a change in market price.

C. Producers will offer more units at a higher price and fewer units at a lower price. movement along

Suppose that at first the price of a pair of shoes is ​$15 and the price of a t−shirt is ​$9. ​Then, the price of a pair of shoes changes to ​$30 and the price of a t−shirt changes to ​$21. What has happened the money prices and relative prices of these two​ goods? A. The money price of a pair of shoes and a t−shirt have fallen and the relative price of a t−shirt and a pair of shoes have risen. B. The money and relative prices of a pair of shoes and a t−shirt have not changed. C. The money price of a pair of shoes and a t−shirt have risen and the relative price of a pair of shoes has fallen while relative price of a t−shirt has risen. D. The money price of a pair of shoes and a t−shirt have risen and the relative prices of a t−shirt and a pair of shoes have fallen.

C. The money price of a pair of shoes and a t−shirt have risen and the relative price of a pair of shoes has fallen while relative price of a t−shirt has risen.

All of the following will decrease the supply of airline flights except A. an increase in the salaries of pilots. B. a rise in the price of jet fuel. C. a technological change that makes airplanes safer and more​ fuel-efficient. D. a reduction in the number of airline companies offering service.

C. a technological change that makes airplanes safer and more​ fuel-efficient.

Indicate whether the following events would cause an​ "increase or a decrease in demand" or an​ "increase or a decrease in the quantity demanded​" for​ cable-based Internet access​ service, which is a normal good. a. Firms providing wireless​ (an alternative to​ cable) Internet access services reduce their prices. This will cause​ a(n) A. increase in demand. B. increase in quantity demanded. C. decrease in demand. D. decrease in quantity demanded.

C. decrease in demand

In the market for wireless earbuds​ (a normal​ good), indicate whether the following events would cause an​ "increase or a decrease in demand​" or an​ "increase or a decrease in the quantity demanded.​" Consumers of wireless earbuds anticipate that the price of this good will decline in the future. A. increase in demand. B. increase in quantity demanded. C. decrease in demand. D. decrease in quantity demanded. Equilibrium quantity would decrease. Equilibrium price would decrease.

C. decrease in demand.

In the market for wireless earbuds​ (a normal​ good), indicate whether the following events would cause an​ "increase or a decrease in demand​" or an​ "increase or a decrease in the quantity demanded.​" There is an increase in the price of carry cases for wireless earbuds. A. increase in quantity demanded. B. decrease in quantity demanded. C. decrease in demand. D. increase in demand. Equilibrium quantity would decrease. Equilibrium price would decrease.

C. decrease in demand.

Indicate whether the following events would cause an​ "increase or a decrease in demand" or an​ "increase or a decrease in the quantity demanded​" for​ cable-based Internet access​ service, which is a normal good. There is a decrease in the incomes earned by consumers of​ cable-based Internet access services. This will cause​ a(n) A. decrease in quantity demanded. B. increase in demand. C. decrease in demand. D. increase in quantity demanded.

C. decrease in demand.

Consider the market for economics textbooks. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. Publishers expect that the market price of economics textbooks will increase next month. This will cause​ a(n) A. increase in supply. B. increase in quantity supplied. C. decrease in supply. D. decrease in quantity supplied.

C. decrease in supply.

Consider the market for economics textbooks. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. The market price of editorial services increases. This will cause​ a(n) A. increase in supply. B. increase in quantity supplied. C. decrease in supply. D. decrease in quantity supplied.

C. decrease in supply.

Consider the market for smartphones. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. The price of machinery used to produce smartphones increases. This will cause​ a(n) A. increase in supply. B. increase in quantity supplied. C. decrease in supply. D. decrease in quantity supplied. Equilibrium quantity would decrease. Equilibrium price would increase.

C. decrease in supply.

Indicate whether the following events would cause an​ "increase or a decrease in demand" or an​ "increase or a decrease in the quantity demanded​" for​ cable-based Internet access​ service, which is a normal good. Firms providing​ cable-based Internet access services reduce their prices. This will cause​ a(n) A. decrease in demand. B. increase in demand. C. increase in quantity demanded. D. decrease in quantity demanded.

C. increase in quantity demanded.

At the market equilibrium​ price, A. quantity and price are equal. B. demand equals supply. C. quantity demanded equals quantity supplied. D. everyone can buy the product.

C. quantity demanded equals quantity supplied.

Identify which of the following would generate an increase in the market demand for tablet​ devices, which are a normal good. I. A decrease in the incomes of consumers of tablet devices. II. An increase in the price of ultrathin​ computers, which are substitutes. III. An increase in the price of online​ apps, which are complements. IV. An increase in the number of consumers in the market for tablet devices. A. Only I. B. Only II. C. Both II and III. D. Both II and IV.

D. Both II and IV.

What if the increase in demand were smaller than the increase in​ supply? A. Equilibrium price and quantity both fall. B. Equilibrium price and quantity both rise. C. Equilibrium price rises and quantity falls. D. Equilibrium price falls and quantity rises.

D. Equilibrium price falls and quantity rises.

Which of the following describes an inferior​ good? A. When consumer income​ decreases, the demand for public transit decreases. B. When consumer income​ decreases, the demand for aspirin is unchanged. C. When consumer income​ increases, the demand for tea increases. D. When consumer income​ increases, the demand for eggs decreases.

D. When consumer income​ increases, the demand for eggs decreases.

A demand schedule gives a schedule of​ ________ quantities demanded per time dimension at​ ________. A. unchanging; different possible prices B. ​unchanging; the same price C. alternative; the same price D. alternative; different possible prices

D. alternative; different possible prices

Consider the market for smartphones. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. There is a decrease in the market demand for smartphones. This will cause​ a(n) A. increase in supply. B. increase in quantity supplied. C. decrease in supply. D. decrease in quantity supplied. Equilibrium quantity would decrease. Equilibrium price would decrease.

D. decrease in quantity supplied.

A demand schedule shows: A. the relation between price and income when all other things remain equal. B. consumer preferences for different combinations of goods and services. C. individual preference for more income rather than less. D. various quantities of a good or service demanded at various prices.

D. various quantities of a good or service demanded at various prices.