ECON_Ch. 3 Part 1 HW
In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by
A change in buyer tastes.
If producers must obtain higher prices than before to produce a given level of output, then the following has occurred.
A decrease in supply.
If two goods are complements
A decrease in the price of one will increase the demand for the other.
Which of the following will cause the demand curve for product A to shift to the left?
An increase in money income if A is an inferior good.
An increase in the price of a product will reduce the amount of it purchased because
Consumers will substitute other products for the one whose price has risen.
Suppose an excise tax is imposed on product X. We expect this tax to
Decrease the demand for complementary good Y and increase the demand from the substitute product Z.
The upward slope of the supply curve reflects the
Law of supply
Refer to the diagram. A decrease in quantity demanded is depicted by a
Move from point y to point x.
Refer to the diagram. A decrease in supply is depicted by a
Shift from S2 to S1.
A leftward shift of a product supply curve might be caused by
Some firms leaving the industry.
An increase in the excise tax on cigarettes raises the price of cigarettes by shifting the
Supply curve for cigarettes leftward.
Other things equal, which of the following might shift the demand curve for gasoline to the left?
The development of a low-cost electric automobile.
According to the concept of diminishing marginal utility, consumers will purchase more of a good when the price falls because
The marginal benefit of additional units of the good now outweigh the marginal cost.
By an "increase in demand," economists mean that
The quantity demanded at each price in a set of prices is greater.
When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls, and fewer Adidas soccer balls. Which of the following best explains Ronaldo's decision to buy more Nike soccer balls?
The substitution effect.
In which of the following statements are the terms "demand" and "quantity demanded" used correctly?
When the price of ice cream rose, the quantity demanded of ice cream fell, and the demand for ice cream toppings fell.
Increasing marginal cost of production explains
Why the supply curve is upsloping.
Suppose there are three buyers of candy in a market: Tex, Dex, and Rex. The market demand and the individual demands of Tex, Dex, and Rex are shown in the table below. a. Fill in the table (gray-shaded cells) for the missing values. b. Which buyer demands the least at a price of $5? The most at a price of $7? c. Which buyer's quantity demanded increases the most when the price is lowered from $7 to $6? d. Which direction would the market demand curve shift if Tex withdrew from the market? What is Dex doubled his purchase at each possible price? e. Suppose that at a price of $6, the total quantity demanded increases from 19 to 29. Is this a "change in the quantity demanded" or a "change in demand"?
a. Row 1: total quantity demanded: 5 Row 2: Rex: 6 invididual Q Dem Row 3: Tex: 6 individual Q Dem Row 4: Dex: 4 individual Q Dem Row 5: total quantity demanded: 33 b. Dex c. Rex d. To the left; to the right e. Change in demand
In 2001 an outbreak of hoof-and-mouth disease in Europe led to the burning of millions of cattle carcasses. What impact do you think this had on the following? a. The supply of cattle hides: b. Hide prices: c. The supply of leather goods: d. The price of leather goods:
a. decrease b. increase c. decrease d. increase
