Microeconomics ch. 3

A firm produces volleyballs and soccer balls. What happens to the supply of soccer balls if the market price of volleyballs increases?

The opportunity cost of producing soccer balls rises, so the supply curve of soccer balls decreases.

A decrease in expected future supply of a good will lead to:

a change in the demand for the good even before the supply actually decreases.

A decrease in the price of one substitute good causes:

a leftward shift in the demand curve for the other substitute good.

A decrease in demand refers to:

a leftward shift of the demand curve.

A decrease in income causes demand for a normal good to ________, and an increase in income causes demand for an inferior good to ________.

decrease; decrease

An increase in a per unit production tax ______ supply.

decreases

t/f: A higher opportunity cost of producing a good increases the supply of that good.

false

t/f: Advances in technology such as personal computers and cellular telecommunications are indicated in the supply graph by a movement along the supply curve.

false

t/f: Advertising, fads, and fashion are examples of influences on demand that are generally referred to as altering expectations about products.

false

A decrease in production costs at any given quantity ______ supply.

increases

An increase in a per unit production subsidy ______ supply.

increases

A good is considered normal if demand for it ______ when income ______.

increases; increases

A farmer can grow either apples or oranges. An increase in the price of apples ______ the opportunity cost of growing oranges so that the supply curve of oranges shifts ______.

increases; up and to the left

A farmer can grow soy or sorghum. If the price of soy increases, the opportunity cost of growing sorghum ______, shifting the supply curve of sorghum ______.

increases; up and to the left

A decrease in the opportunity cost of steel production will:

make suppliers more likely to produce steel, thus shifting the supply curve down and to the right.

A change in which factor would shift the supply curve?

production technology

A government subsidy to producers causes the:

supply of the product to increase

A demand curve indicates that:

the quantity demanded of a good is higher when its price is lower.

t/f: A change in price is reflected by a movement along the same demand curve while a change in demand refers to a shift of the entire demand curve.

true

t/f: A decrease in the cost of inputs will shift the supply curve down and to the right.

true