Question 1

A shortage occurs whenever

Accepted Answer

A shortage occurs when the quantity of a good or service demanded by consumers exceeds the quantity supplied by producers at the current market price. In other words, the quantity supplied is less than the quantity demanded.

Question 2

The latest data from the movie studios reveals that attendance at movies has declined as well as the average ticket price. How could this have possibly happened?

Accepted Answer

The decline in attendance and average ticket price suggests a decrease in demand. There was no mention of any increase in the supply of movies, so there was no change in supply. Therefore, the best choice is D - a decrease in demand and no change in supply.

Question 3

Some studies have shown that eating chocolate before a test can increase brain activity, thereby causing students to score higher on exams. When these findings were announced, the price and quantity sold of chocolate increased in college towns. One reason for this could have been that the

Accepted Answer

The increase in price and quantity sold of chocolate in college towns suggests that there was an increase in demand for chocolate from consumers. The other answer choices do not align with this observation.

Question 4

Old Navy stocks more Bermuda shorts during the summer months than in the winter months. The resulting shift in supply explains

Accepted Answer

Price expectations influence Old Navy's decision to stock more Bermuda shorts in the summer, anticipating higher demand and potentially higher prices, rather than changes in technology, income, input costs, or the number of firms.

Question 5

The equilibrium price of peanut butter is $5. A study comes out that says the fat in peanut butter is good for the heart. Holding all other factors constant, which of the following scenarios could happen?

Accepted Answer

The study about the health benefits of the fat in peanut butter will increase the demand for peanut butter. The increase in demand will cause an increase in the equilibrium price of peanut butter. Therefore, the price of peanut butter will increase to $7 because of a demand shift.

Question 6

When the price is_____ the equilibrium price, we would expect there to be a _____, causing the market to put ______pressure on the price until it went back to the equilibrium price.

Accepted Answer

When the price is above the equilibrium price, there is typically a surplus because supply exceeds demand at that price level. This surplus puts downward pressure on the price as sellers compete to find buyers, leading the price to move back towards the equilibrium.

Question 7

If the price of Gatorade increases, the equilibrium price of Powerade, a substitute good, will_____ because of a shift in ______.

Accepted Answer

When the price of Gatorade increases, consumers will likely switch to Powerade, a substitute good, increasing the demand for Powerade. This shift in demand causes the equilibrium price of Powerade to increase.

Question 8

Refer to the following figure to answer the next two questions.
 
-According to the accompanying figure, if the price is $10, there is a_____ of _______units.

Accepted Answer

At a price of $10, the quantity demanded is less than the quantity supplied, leading to a surplus. The surplus is the difference between the quantity supplied and the quantity demanded at this price, which is 15 units.

Question 9

When the price of ground beef increases and all else is held constant, we would expect the supply of hamburgers to____ , causing the price to_______ .

Accepted Answer

When the price of ground beef (a key ingredient in hamburgers) increases, the cost of producing hamburgers also increases. This typically leads to a decrease in the supply of hamburgers because producers may not be able to or willing to produce the same amount at higher costs. With a decrease in supply and assuming demand remains constant, the price of hamburgers would increase due to the scarcity of the product.

Question 10

The economists at JET Consulting consider Campbell's Soup to be an inferior good. During a recession, when the income in the economy is decreasing, economists at JET Consulting would expect the demand curve for Campbell's Soup to , causing the equilibrium price to and the equilibrium quantity to .

Accepted Answer

Inferior goods are those for which demand increases as consumer income decreases. During a recession, when incomes fall, demand for an inferior good like Campbell's Soup would increase, shifting the demand curve to the right. This shift would lead to an increase in both the equilibrium price and quantity.

Question 11

In the first few months of 2012, the price of gasoline increased by approximately 15 percent. Because of this increase, we would expect the _____curve in the market for hybrid cars to_____ .

Accepted Answer

The increase in gasoline prices makes hybrid cars more attractive to consumers as they offer better fuel efficiency. This increased attractiveness leads to higher demand for hybrid cars, hence the demand curve shifts to the right.

Question 12

Refer to the accompanying diagram. Which of the following scenarios would explain this change in equilibrium?

Accepted Answer

The answer of Refer to the accompanying diagram. Which of...

Question 13

James specializes in college-level economics tutoring. He knows that during the two weeks before finals he can charge more for an hour of private tutoring. Expecting this price increase, James will

Accepted Answer

James will supply less tutoring now and shift the supply to the left because he anticipates being able to charge more during the two weeks before finals. This expectation of higher future prices incentivizes him to decrease his current supply to save his tutoring hours for when he can charge more.

Question 14

If the number of buyers in a market increases from 50 to 100, you would expect the equilibrium price to ______and the equilibrium quantity to_____ , holding all else constant.

Accepted Answer

When the number of buyers in a market increases, the demand for the product increases, causing an increase in the equilibrium price and equilibrium quantity, assuming supply remains constant.

Question 15

When the demand curve shifts to the right and the supply curve is held constant,

Accepted Answer

When the demand curve shifts to the right and the supply curve is held constant, the equilibrium price and quantity both increase. This is because there is a greater demand for the same supply, leading to an increase in both price and quantity.

Question 16

Refer to the accompanying graph. If a tax is placed on a good and all else is held constant, we would assume that the supply curve would

Accepted Answer

The answer of Refer to the accompanying graph. If a...

Question 17

Refer to the following figure to answer the next two questions.
 
-Which of the quantity Q) and price P) combinations in the accompanying figure represents the market at competitive equilibrium?

Accepted Answer

The market at competitive equilibrium occurs at the intersection of the supply and demand curves. This occurs at a quantity of 22 and a price of $8, which is represented by choice C.

Question 18

Which of the following situations would cause the demand curve to shift to the right?

Accepted Answer

The answer of Which of the following situations would cause...

Question 19

After a new technology is introduced, the price typically falls. What is a possible explanation for this?

Accepted Answer

The answer of After a new technology is introduced, the...

Question 20

Firm A notices that Firm B is making a profit by producing footballs. There is nothing stopping Firm A from entering the football market, so it does. Holding all else constant, the number of firms in the market will

Accepted Answer

When Firm A enters the football market, the number of firms increases. This addition of a new firm increases the overall market supply of footballs, assuming all else is constant.

Quiz 3: The Market at Work: Supply and Demand Y

A shortage occurs whenever

The latest data from the movie studios reveals that attendance at movies has declined as well as the average ticket price. How could this have possibly happened?

Some studies have shown that eating chocolate before a test can increase brain activity, thereby causing students to score higher on exams. When these findings were announced, the price and quantity sold of chocolate increased in college towns. One reason for this could have been that the

Old Navy stocks more Bermuda shorts during the summer months than in the winter months. The resulting shift in supply explains

The equilibrium price of peanut butter is $5. A study comes out that says the fat in peanut butter is good for the heart. Holding all other factors constant, which of the following scenarios could happen?

When the price is___ the equilibrium price, we would expect there to be a _, causing the market to put ____pressure on the price until it went back to the equilibrium price.

If the price of Gatorade increases, the equilibrium price of Powerade, a substitute good, will_ because of a shift in __.

Refer to the following figure to answer the next two questions. -According to the accompanying figure, if the price is $10, there is a_ of ___units.

When the price of ground beef increases and all else is held constant, we would expect the supply of hamburgers to , causing the price to___ .

The economists at JET Consulting consider Campbell's Soup to be an inferior good. During a recession, when the income in the economy is decreasing, economists at JET Consulting would expect the demand curve for Campbell's Soup to , causing the equilibrium price to and the equilibrium quantity to .

In the first few months of 2012, the price of gasoline increased by approximately 15 percent. Because of this increase, we would expect the _curve in the market for hybrid cars to_ .

Refer to the accompanying diagram. Which of the following scenarios would explain this change in equilibrium?

James specializes in college-level economics tutoring. He knows that during the two weeks before finals he can charge more for an hour of private tutoring. Expecting this price increase, James will

If the number of buyers in a market increases from 50 to 100, you would expect the equilibrium price to __and the equilibrium quantity to_ , holding all else constant.

When the demand curve shifts to the right and the supply curve is held constant,

Refer to the accompanying graph. If a tax is placed on a good and all else is held constant, we would assume that the supply curve would

Refer to the following figure to answer the next two questions. -Which of the quantity Q) and price P) combinations in the accompanying figure represents the market at competitive equilibrium?

Which of the following situations would cause the demand curve to shift to the right?

After a new technology is introduced, the price typically falls. What is a possible explanation for this?

Firm A notices that Firm B is making a profit by producing footballs. There is nothing stopping Firm A from entering the football market, so it does. Holding all else constant, the number of firms in the market will

Quiz 3: The Market at Work: Supply and Demand Y

A shortage occurs whenever

The latest data from the movie studios reveals that attendance at movies has declined as well as the average ticket price. How could this have possibly happened?

Some studies have shown that eating chocolate before a test can increase brain activity, thereby causing students to score higher on exams. When these findings were announced, the price and quantity sold of chocolate increased in college towns. One reason for this could have been that the

Old Navy stocks more Bermuda shorts during the summer months than in the winter months. The resulting shift in supply explains

The equilibrium price of peanut butter is $5. A study comes out that says the fat in peanut butter is good for the heart. Holding all other factors constant, which of the following scenarios could happen?

When the price is_____ the equilibrium price, we would expect there to be a _____, causing the market to put ______pressure on the price until it went back to the equilibrium price.

If the price of Gatorade increases, the equilibrium price of Powerade, a substitute good, will_____ because of a shift in ______.

Refer to the following figure to answer the next two questions. -According to the accompanying figure, if the price is $10, there is a_____ of _______units.

When the price of ground beef increases and all else is held constant, we would expect the supply of hamburgers to____ , causing the price to_______ .

The economists at JET Consulting consider Campbell's Soup to be an inferior good. During a recession, when the income in the economy is decreasing, economists at JET Consulting would expect the demand curve for Campbell's Soup to , causing the equilibrium price to and the equilibrium quantity to .

In the first few months of 2012, the price of gasoline increased by approximately 15 percent. Because of this increase, we would expect the _____curve in the market for hybrid cars to_____ .

Refer to the accompanying diagram. Which of the following scenarios would explain this change in equilibrium?

James specializes in college-level economics tutoring. He knows that during the two weeks before finals he can charge more for an hour of private tutoring. Expecting this price increase, James will

If the number of buyers in a market increases from 50 to 100, you would expect the equilibrium price to ______and the equilibrium quantity to_____ , holding all else constant.

When the demand curve shifts to the right and the supply curve is held constant,

Refer to the accompanying graph. If a tax is placed on a good and all else is held constant, we would assume that the supply curve would

Refer to the following figure to answer the next two questions. -Which of the quantity Q) and price P) combinations in the accompanying figure represents the market at competitive equilibrium?

Which of the following situations would cause the demand curve to shift to the right?

After a new technology is introduced, the price typically falls. What is a possible explanation for this?

Firm A notices that Firm B is making a profit by producing footballs. There is nothing stopping Firm A from entering the football market, so it does. Holding all else constant, the number of firms in the market will

When the price is___ the equilibrium price, we would expect there to be a _, causing the market to put ____pressure on the price until it went back to the equilibrium price.

If the price of Gatorade increases, the equilibrium price of Powerade, a substitute good, will_ because of a shift in __.

Refer to the following figure to answer the next two questions. -According to the accompanying figure, if the price is $10, there is a_ of ___units.

When the price of ground beef increases and all else is held constant, we would expect the supply of hamburgers to , causing the price to___ .

In the first few months of 2012, the price of gasoline increased by approximately 15 percent. Because of this increase, we would expect the _curve in the market for hybrid cars to_ .

If the number of buyers in a market increases from 50 to 100, you would expect the equilibrium price to __and the equilibrium quantity to_ , holding all else constant.