Unit 2- Supply and Demand

(Figure 6-5: Demand and Supply of Wheat II) What is the equilibrium quantity in this wheat market?

6,000 bushels

(Figure 7-1: Demand and Supply of Gasoline) When the supply curve shifted from S1 to S2, the new intersection of supply and demand has a price of ________ and quantity of 400. This could have resulted from ________.

$1.50; an increase in refining technology.

Given that chicken and beef are substitute goods, if the price of chicken decreases substantially, there would be:

A decrease in the demand for beef.

Which of the following is most likely to shift the supply of milk to the right?

A increase in the price of feed to given to dairy cows

A decrease in supply means:

A shift to the left of the entire supply curve.

Consider a Texaco gas station. If it introduces a new technology where customers pay at the pump, thus decreasing production costs, there will be:

A shift to the right in the station's supply curve and lower gas prices.

Which of the following would shift the demand curve for new textbooks to the right?

An increase in college enrollments.

A new wonder diet that results in a dramatic loss of weight sweeps through America. The key to the diet is to eat unlimited amounts of red meat (beef) but no poultry (chicken) or carbohydrate-rich foods. As millions of American switch to the new diet, we can expect:

An increase in the demand for beef, leading to a shift to the right in the demand curve for beef and higher beef prices.

The demand curve for DVDs has shifted to the right. What could've caused it?

An increase in the incomes of buyers.

In the market for beef tacos, a normal good, you observe that the equilibrium price and quantity have increased. This can only be caused by:

An increase in the incomes of people who eat tacos.

An increase in supply of a good is caused by:

An increase in the number of sellers.

A decrease in the price of a good will result in:

An increase in the quantity demanded along a given demand curve.

If the price of mozzarella cheese (an ingredient in pizza) declines due to a major technological breakthrough in the dairy industry, there would be:

An increase in the supply of pizza.

suppose the input costs associated with manufacturing hair-replacement medication decreases over time. This would lead to:

An increase in the supply of such treatments, lower prices, and an increase in the equilibrium quantity.

French fries and hamburgers are complements. Suppose that the cost of the ingredients used to make hamburgers rises, so that the price of a hamburger rises. The demand for french fries will ________, the equilibrium price of french fries will ________, and the equilibrium quantity will ________.

Demand: decrease, Price: decrease, Quantity: decrease.

An increase in the price of wheat, an important ingredient in the production of bread, combined with an increase in the number of people consuming bread, will result in which of the following changes in the bread market?

Equilibrium price will increase, but equilibrium quantity may decrease, increase, or stay the same.

In the soft drink market, an increase in the price of sugar, a necessary ingredient for soft drinks, and an increased concerned about tooth decay caused by the consumption of soft drinks will result in which of the following?

Equilibrium quantity will decrease, but equilibrium price may decrease, increase, or stay the same.

Suppose the local real estate market is in equilibrium. recently a recession has caused local household incomes to decline. at the same time, construction of a large subdivision of new homes has just been completed. Given these two changes, we can predict the price of real estate will _____ and the quantity of real estate bought and sold will ______.

Fall; Fall if the demand decrease is larger than the supply increase.

A decrease in the price of eggs will result in a(n):

Greater quantity of eggs demanded.

After graduation from college, you will receive a substantial increase in your income from a new job. If you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger would be considered a(n):

Inferior good.

For most goods, purchases tend to rise with increases in buyers' incomes and to fall with decreases in buyers' incomes. Such goods are known as:

Normal goods.

The market equilibrium is found at the:

Price where quantity demanded equals quantity supplied.

If steak and potatoes are complements, when the price of state goes up, the demand curve for potatoes:

Shifts to the left.

(Figure 6-5: Demand and Supply of Wheat II) if a price of $8 temporarily exists in this market, a:

Surplus of 4,000 bushels will result.

(Figure 6-4: Demand and Supply of Wheat) If a price of $10 temporarily exists in this market, a:

Surplus of 8,000 bushels will result.

If suppliers expect prices to rise next year for their product, then one would expect:

That this will shift the supply curve for the product to the left this year.

recent research suggests that certain plastic containers may have cancer-causing elements in them. As a result of this research, one would expect that:

The demand for such containers would decrease.

Milk is an important ingredient in the production of ice cream. If the price of milk increases, then one would expect, holding all other things constant:

The supply curve for ice cream to shift left.

High-fructose corn syrup, which is derived from corn, is an important ingredient in the production of many soft drinks. If the price of corn increases, one would expect:

The supply curve for soft drinks to shift left.

In the local market for coffee, what would happen if Joyce's Java and Everyday Joe's coffee shops go out of business?

The supply curve shifts to the left.