HW 2
Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular telephone is
60,000 and $50.
A demand curve
Both answers B and C are correct.
Which figure above shows the effect if research is published claiming that eating pizza is healthy?
Figure A
Which figure above shows the effect of an increase in the cost of the tomato sauce used to produce pizza?
Figure C
Which figure above shows the effect of a technological advance in the production of pizza?
Figure D
Consumers eat salsa with taco chips. The price of salsa rises. How does the increase in the price of salsa affect the demand for taco chips?
It decreases the demand for taco chips.
Plywood is used in the construction of houses. If the price of plywood rises, what happens to the supply of houses?
The supply decreases so that the supply curve shifts leftward.
A change in the demand for apples could result from any of the following EXCEPT
a change in the price of an apple.
If the demand for digital cameras increases when consumers' incomes rise, then digital cameras are
a normal good.
Using the data in the table above, at the price of $80 a phone,
a surplus of 25,000 cellular telephones occurs.
In the above figure, the shift in the demand curve from D to D1 can be the result of
an increase in the price of a sub sandwich, a substitute for pizza.
In the above figure, the shift in the supply curve from S to S2 reflects
an increase in the supply of pizza.
If income increases and the demand for bus rides decreases,
bus rides are an inferior good.
Computer chips are a normal good. Suppose the economy slips into a recession so that income falls. As a result, the demand for computer chips ________ so that the price of a computer chip ________.
decreases; falls
If good weather conditions result in a larger than normal crop of peaches, then the
equilibrium price of peaches falls and the equilibrium quantity of peaches increases.
The law of supply states that, other things remaining the same,
if the price of a good increases, the quantity supplied increases.
Researchers have found a hybrid of corn that is cheaper to grow. This technological breakthrough
increases the supply of corn.
Which of the following increases the supply of a product?
lower prices for the resources used to produce the product
An increase in the quantity demanded is shown as a
movement along the demand curve.
The graph illustrates the market for bottled water. If the producers of bottled water switch to using improved technology, then the
quantity demanded of bottled water increases.
When the demand curve shifts rightward and the market moves to a new equilibrium, then the
quantity supplied increases.
Suppose the equilibrium price of oranges is $2.00 per pound. If the actual price is above the equilibrium price a
surplus exists and the price falls to restore equilibrium.
Market equilibrium occurs when
the quantity demanded equals the quantity supplied.
The price of cotton clothing falls. As a result,
the quantity demanded of cotton clothing increases.
If the price is below the equilibrium price,
there is a shortage.
