Supply and Demand Extra Practice
T or F: For an inferior good, when income increases, the demand curve shifts leftward.
True
T or F: Demand is the relationship between quantity demanded and the price of a good when all other influences on buying plans remain the same
Truf
A change in the demand for apples could result from anything buy
a change in the price of an apple
It is expected that the price of abushel of what will increase in one month. This belief will result in
a decrease in current supply of wheat
What shifts the supply curve of popcorn leftward?
a decrease in the number of popcorn suppliers
Which of the following increases the supply of gasoline?
a decrease in the price of a resource used to produce gasoline, such a crude oil
The law of supply states that other things remaining the same, a decrease in the price of a kayak leads to
a decrease in the quantity of kayaks supplied
Which of the following results in an increase in the supply of a good or service?
an increase in foreign imports of the good or service
If mac and cheese is an inferior good, then a decrease in income results in
an increase in the demand for mac and cheese
Consider the market for cellular phones. What would shift the demand curve rightward?
an increase in the price of regular phone service, a substitute for cellular phones
Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to
an increase in the supply electric cars so that the supply curve shifts rightward
An increase in the number of pineapple growers result in
an increase in the supply of pineapples and a rightward shift in the supply curve of pineapples
A market is defined as
any arrangement that brings buyers and sellers together
A surplus of cardboard boxes means that
at the current price of a cardboard box, the quantity demanded is less than the quantity supplied.
Demand curves slope ________ because as the price increases and other things remain the same, the quantity demanded________.
downward; decreases
If good weather conditions results in a larger than normal crop of peaches, then the
equilibrium price of peaches falls and the equilibrium quantity of peaches increases.
A normal good is defined as a good
for which demand increases when income increases
Which of the following statements is true about a competitive market? A competitive market
has so many buyers and sellers that no one can influence price
The market supply curve is the ________ of the ________.
horizontal sum; individual supply curves
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
An increase in the number of fast-food restaurants
increases the supply of fast-food meals
An increase in the number of producers of bird seed ________ the supply of bird seed and shifts the supply curve of bird seed ________.
increases; rightward
A demand schedule
is a list of the quantities demanded at each different price when all other influences on buying plans remain the same
The market demand curve
is the horizontal sum of individual demand curves
If the price of gas falls, according the the law of demand, what would happen to the quantity demanded?
it would increase
What would increase the supply of a product?
lower prices for the resources used the produce the product
An increase in the quantity demanded is shown as a
movement along the demand curve
The quantity demanded of a good or service is
one quantity at one price
A shortage will occur whenever
price is below equlibrium
What would increase the supply of a good?
productivity improves
The equilibrium or market clearing price occurs at the point at which
quantity demanded equals quantity supplied.
If the price of carrots is below the equilibrium price, the
quantity demanded of carrots exceeds the quantity supplied and a shortage exists.
When there is a surplus of snowboards, the
quantity of snowboards supplied is greater than the quantity of snowboards demanded.
If there is a surplus of tacos, then the
quantity of tacos demanded is less than the quantity of tacos supplied.
When the demand curve shifts rightward and the market moves to a new equilibrium, then the
quantity supplied increases.
The downward slope of a demand curve
represents the law of demand
If a freeze destroys oranges before they are harvested, the equilibrium price of an orange ________ and the equilibrium quantity ________.
rises; decreases
If an early frost destroys most of the apple crop, the equilibrium price of an apple ________ and the equilibrium quantity ________.
rises; decreases
Assume a competitive market is in equilibrium. There is an increase in demand, but no change in supply. As a result the equilibrium price ________, and the equilibrium quantity is ________.
rises; increases
The phrase, "a change in demand" most directly implies a
shift of the demand curve
If the number of sellers decrease, then the supply curve _______ and the supply _______
shifts leftward; decreases
The supply schedule
shows the relationship between the quantity supplied and the price of a good when all other influences on selling plans remain the same
Consider the market for cell phones. What would cause the demand curve to shift leftward?
studies showing cell phones cause brain cancer
If the demand for used cars decreased after the price of a new car falls, used cars and new cars are
substitute goods
To find the market demand curve for in-line skates, we must
sum horizontally the individual demand curves of all the buyers
Market demand curves are obtained by
summing the quantities every consumer is willing to buy at each different price
In any given market, prices are determined by
supply and demand
Because of the high cost of fuel, railroads such as Union Pacific Corp and CSX Corp have increased the price they charge to haul freight. This change means that the
supply curve for hauling freight has shifted leftward.
If the number of companies producing memory chips increases, then the
supply of memory chips increases
f the costs to produce pizza increase, which will occur?
supply of pizza will decrease
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.
If a market begins in equilibrium and then the demand curve shifts leftward, a
surplus is created, which is eliminated by a fall in price.
Suppose the current price of a pound of steak is $12 per pound and the equilibrium price is $9 per pound. In this case, there is a
surplus, so the price falls and quantity demanded increases.
What would increase the supply of a good and shift the supply curve rightward?
technological advance in how the good is produced.
What is quantity demanded?
the amount of good people are able and willing to buy during specific time period and at a given price
The quantity demanded of any good or service is ______ during a specified time period and at a specified price.
the amount people are willing and able to buy
In a recession, consumers have less income to spend. As a result, if dining out is a normal good, then which of the following would happen to the demand curve for dining out?
the demand curve would shift leftward
Water bottlers announce that next month the price of bottled water will rise by 25%. Which of the following occurs immediately?
the demand for bottled water increases
The ADA starts a highly successful ad campagin that makes most people want to drink more milk. As a result,
the demand for milk increases
What would increase the demand for a good?
the expectation that future income will be higher
If the demand for a good increases when people's incomes increase,
the good is a normal good
The market demand curve for mousetraps is
the horizontal sum of the individual demand curves for mousetraps of all the buyers
Market equilibrium always occurs at
the intersection of the supply and demand curves
When a surplus of rice occurs,
the price of rice falls.
Changes in what factor would not shift the demand curve?
the price of the good
If a demand curve shifts, we know that
the price of the good itself is not a factor.
The "law of demand" refers to how
the quantity demanded changes when the price of the good changes
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
An increase in the productivity of producing jeans results in
the supply of jeans increasing.
If the price is below the equilibrium price,
there is a shortage
The "law of demand" refers to the fact that, other things remaining the same, when the price of a good rises,
there is movement up along the demand curve to a smaller quantity demanded
Plywood is used to construct houses. If plywood price increases, what happens to the supply of houses.
Supply decreases so that the supply curve shifts leftward
A demand curve
1) has a downward slope 2) is a graph of the relationship between quantity demanded of a good and its price.
A demand schedule shows
1)the quantities that people plan to buy at each different price when all other influences on buying plans remain the same
The number of corn producers increases, so the supply of corn ________ and the supply curve of corn ________.
A) increases; shifts rightward
What indicates that the law of supply applies to makers of soda?
An increase in the price of soda leads to an increase in the quantity of soda supplied
39) 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 ________,
D) decreases; falls
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
What happens to the demand for a good if a complement's price increases?
The demand decreases and the demand curve shifts leftward
To access Internet services, consumers must use a computer. If computer prices fall, what is the effect on the demand for Internet services?
The demand for Internet services increases
A huge 50% off sale on golf clubs is advertised for next week. What happens this week in the market for golf clubs?
The demand for golf clubs decreases
Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound. What takes place?
There is a shortage, so the price rises and quantity demanded decreases.
One reason supply curves have an upward slope is because
a higher price brings a greater profit, so firms want to sell more of that good.
What would increase the quantity supplied of compact discs but does NOT increase the supply of compact discs?
a increase in the price of a compact disc
If the demand for digital cameras increases when consumers' incomes rise, then digital cameras are
a normal good
Which of the following increases the demand for a good or service?
a rise in the price of a substitute good or service
An increase in demand is shown graphically by
a shift of the demand curve to the right
If income increases and the demand for bus rides decreaes
bus rides are an inferior good
A market requires
buyers and sellers
When demand increases,
consumers are willing to buy more at any price
As a falling price eliminates a surplus in the jersey market,
consumers increase the quantity of jerseys they demand.
Advances in productivity increase supply because they
decrease the cost of production
Suppose the price of leather used to produce shoes increases. The higher price of leather ________ the supply of shoes and the supply curve of shoes ________.
decreases; shifts leftward
Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the
demand for Apple computers decreases
Car insurance and cars are complements. If the price of car insurance increases, the
demand for cars decreases
Hot dogs and hot dog buns are complements. If hot dog prices fall, then
demand for hot dog buns will increase
Which of the following shifts the supply curve for oranges?
disastrous weather that destroys about half of this year's orange crop
A change in the price of a good ________ its supply curve and ________ a movement along its supply curve.
does not shift; causes
