Deck 4: Essay

Question 1

Figure 4-30
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Refer to Figure 4-30.In this market for tablet computers,more suppliers enter the market and the price of laptops,a substitute good,increases,while all other factors remain constant.Which curve(s)shift(s)and in which direction?

Answer 1

Demand shifts right and supply shifts right.

Question 2

Suppose consumers expect the price of a good to be higher in the future than it is today.Would the current demand for the good increase or decrease?

Answer 2

The current demand will increase.

Question 3

Figure 4-28
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Refer to Figure 4-28.Using the points on the figure,describe the change that would occur if the price of this good increases.

Answer 3

B to A

Question 4

Suppose the number of buyers in a market decreases.As a result,would the demand curve in this market shift to the right or to the left?

Question 5

If income rises in the market for an inferior good,will the demand curve for the inferior good shift to the right or to the left?

Question 6

Figure 4-30
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Refer to Figure 4-30.In this market for iPhones,the technology improves while all other factors remain constant.Which curve(s)shift(s)and in which direction?

Question 7

Figure 4-29
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Refer to Figure 4-29.If the price increases from $5 to $6,how does the quantity demanded change?

Question 8

Since individual buyers and individual sellers in a competitive market have no influence on the market price,what do we call the buyers and sellers in a competitive market?

Question 9

Does a change in the price in a market result in a shift of the demand curve or in a movement along the demand curve?

Question 10

Figure 4-28
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Refer to Figure 4-28.Using the points on the figure,describe the change that would occur if consumer incomes increase and this is an inferior good.

Question 11

Studies show that lower cigarette prices are associated with greater use of marijuana;therefore,tobacco and marijuana are

Question 12

Figure 4-28
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Refer to Figure 4-28.Using the points on the figure,describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Question 13

Suppose goods A and B are substitutes.If the price of good A increases,will the demand for good B increase or decrease?

Question 14

Figure 4-30
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Refer to Figure 4-30.In this market for iPhones,the technology improves while all other factors remain constant.Explain the change(s)in the equilibrium price and quantity.

Question 15

A group of buyers and sellers of a particular good or service is called a

Question 16

Suppose goods A and B are complements.If the price of good A increases,will the demand for good B increase or decrease?

Question 17

Figure 4-29
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Refer to Figure 4-29.The movement from S1 to S2 is a

Question 18

According to the law of demand,when price increases the quantity demanded of a good

Question 19

If income rises in the market for a normal good,will the demand curve for the normal good shift to the right or to the left?

Question 20

Figure 4-28
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Refer to Figure 4-28.Using the points on the figure,describe the change that would occur if the price of a substitute for this good becomes more expensive.

Question 21

Figure 4-31
Consider the market for 2-packs of light bulbs below.
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Refer to Figure 4-31.At a price of $6,is there a shortage or surplus,and how large is the shortage/surplus?

Question 22

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation ,where is the quantity demanded and is the price.Also,suppose the supply schedule can be represented by the equation ,where is the quantity supplied.
Refer to Scenario 4-1.What is the equilibrium price in this market?

Question 23

Fill in the table below,showing whether equilibrium price and equilibrium quantity go up,go down,stay the same,or change ambiguously.
No Change in Supply
An Increase in Supply
A Decrease in Supply
No Change in
Demand
An Increase in
Demand
A Decrease in
Demand

Question 24

Figure 4-31
Consider the market for 2-packs of light bulbs below.
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Refer to Figure 4-31.At a price of $3,is there a shortage or surplus,and how large is the shortage/surplus?

Question 25

Figure 4-31
Consider the market for 2-packs of light bulbs below.
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Refer to Figure 4-31.What are the values of the equilibrium price and quantity?

Question 26

Figure 4-31
Consider the market for 2-packs of light bulbs below.
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Refer to Figure 4-31.Suppose there is an improvement in technology in this market and the price of lamps,a complementary good,increases.What changes do you predict in the equilibrium price and quantity?

Question 27

If corn is an input into the production of ethanol,will a decrease in the price of corn increase the supply of ethanol or decrease the supply of ethanol?

Question 28

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation ,where is the quantity demanded and is the price.Also,suppose the supply schedule can be represented by the equation ,where is the quantity supplied.
Refer to Scenario 4-1.Suppose the supply curve shifts to
.What is the new equilibrium price and quantity in this market?

Question 29

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation ,where is the quantity demanded and is the price.Also,suppose the supply schedule can be represented by the equation ,where is the quantity supplied.
Refer to Scenario 4-1.Suppose the price is currently equal to 10 in this market.Is there a shortage or surplus in this market,and how large is the shortage/surplus?

Question 30

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation ,where is the quantity demanded and is the price.Also,suppose the supply schedule can be represented by the equation ,where is the quantity supplied.
Refer to Scenario 4-1.Suppose the price is currently equal to 18 in this market.Is there a shortage or surplus in this market,and how large is the shortage/surplus?

Question 31

If the demand for a good increases at the same time as the supply of the same good decreases,what will happen to the equilibrium price and quantity of the good?

Question 32

Suppose the supply and demand of corn both increase.As a result,what will happen to the equilibrium price and equilibrium quantity in the market?

Question 33

Suppose researchers discover a new,lower cost method of producing calculators.As a result,will the supply of calculators increase or decrease?

Question 34

If the supply of pencils,a substitute for pens,increases,what will happen to the equilibrium price of pencils and to the equilibrium price of pens?

Question 35

If the price of steel,an input into the production of automobiles,rises,and at the same time the price of gasoline rises,what will happen to the equilibrium price and quantity of automobiles?

Question 36

Figure 4-30
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Refer to Figure 4-30.In this market for tablet computers,more suppliers enter the market and the price of laptops,a substitute good,increases,while all other factors remain constant.Explain the change(s)in the equilibrium price and quantity.

Question 37

If the supply of tennis balls,a complement to tennis racquets,decreases,what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

Question 38

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation ,where is the quantity demanded and is the price.Also,suppose the supply schedule can be represented by the equation ,where is the quantity supplied.
Refer to Scenario 4-1.What is the equilibrium quantity in this market?