Question 1

Figure: The Market for Candy
   (Figure: The Market for Candy) Look at the figure The Market for Candy.Equilibrium occurs at a price of ________, and the equilibrium quantity is equal to _. 
A.P₁; Q5
B.P₂; Q₃
C.P₃; Q₂
D.P Q

Accepted Answer

The answer of Figure: The Market for Candy
  ...

Question 2

All of the following would result in an increase in the supply of a good except:
A.a decrease in resource prices.
B.a beneficial technological change.
C.an increase in the number of suppliers.
D.an increase in input prices.

Accepted Answer

The answer of All of the following would result in...

Question 3

Researchers find a new strain of genetically modified seeds that results in a higher yield for corn producers.Holding all other things constant, this research will:
A.shift the supply curve for corn left.
B.increase the quantity supplied of corn.
C.decrease the quantity supplied of corn.
D.shift the supply curve for corn to the right.

Accepted Answer

The new strain of genetically modified seeds will result in a higher yield for corn producers, which will increase the quantity supplied of corn at all price levels. This means that the supply curve for corn will shift to the right, resulting in an increase in the supply of corn available in the market.

Question 4

A farmer finds that when he produces more corn, he also has more corn stalks that he can sell as decorations.To the farmer, corn and corn stalks are:
A.complements in production.
B.substitutes in production.
C.unrelated goods.
D.inferior goods.

Accepted Answer

Complements in production are goods that are produced together and used together. In this case, the more corn the farmer produces, the more cornstalks he has to sell as decorations, indicating that they are complementary goods in production.

Question 5

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

Accepted Answer

If suppliers expect prices for their product to rise next year, they will be incentivized to hold onto their inventory and supply less this year, causing a shift in the supply curve to the left. This means that the quantity supplied at any given price will be lower, resulting in higher prices and potentially fewer sales. This does not directly affect the demand curve, so choices A and B are incorrect. A decrease in price would cause a shift in the supply curve to the right (not a increase in price), so choice D is also incorrect.

Question 6

(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z.The equilibrium price and quantity in this market are, respectively:
A.$5 and 40 units.
B.$20 and 60 units.
C.$10 and 30 units.
D.$15 and 20 units.

Accepted Answer

At a price of $10, the quantity demanded by consumers is 30 units, which is exactly equal to the quantity supplied by producers. This is the definition of market equilibrium. Therefore, the equilibrium price and quantity in this market are $10 and 30 units, respectively.

Question 7

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:
A.the supply curve for soft drinks to shift left.
B.the quantity supplied of soft drinks to increase.
C.the demand for soft drinks to increase.
D.the supply curve for soft drinks to shift right.

Accepted Answer

Since high-fructose corn syrup is an important ingredient in the production of soft drinks and its price has increased, the cost of production will increase for soft drink manufacturers, causing them to supply less at any given price. This will cause the supply curve for soft drinks to shift left.

Question 8

The market for good Y, a perfectly competitive good, is made up of 15 producers who each produce the same amount of good Y.If the price of good Y is currently $100 and the total quantity supplied is 150, how many units of good Y is each producer supplying?
A.10
B.150
C.100
D.15

Accepted Answer

The answer of The market for good Y, a perfectly...

Question 9

If Benjamin considers sushi to be a normal good and if his income increases by 20%, his purchases of sushi will:
A.decrease by 20%.
B.increase.
C.decrease.
D.not change.

Accepted Answer

Since sushi is a normal good, an increase in income will lead to an increase in demand for sushi. Therefore, Benjamin's purchases of sushi will increase.

Question 10

(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z.If the demand curve for good Z is linear, it can be expressed as:
A.Qd = 3P.
B.Qd = 50 - 2P.
C.Qd = Qs.
D.Qd = 100 - 2P.

Accepted Answer

The answer of (Table: Competitive Market for Good Z) Look...

Question 11

Suppose the demand curve for good Z is downward sloping.If the price of good Z decreases because of a shift in the supply of good Z, this will cause:
A.an increase in the demand for good Z.
B.a movement along the demand curve of good Z.
C.no effect on the quantity demanded of good Z.
D.fewer people to purchase good Z.

Accepted Answer

The answer of Suppose the demand curve for good Z...

Question 12

Suppose people expect the price of MP₃ players to rise next year.As a result of this expectation, people will most likely:
A.purchase fewer MP₃ players this year.
B.observe higher prices for MP₃ players this year.
C.purchase the same amount of MP₃ players, since this expectation will have no effect on consumers this year.
D.decide to wait and purchase the MP₃ players next year.

Accepted Answer

The answer of Suppose people expect the price of MP₃...

Question 13

(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z.If the supply curve for good Z is linear, it can be expressed as:
A.Qs = 3P.
B.Qs = 50 - 2P.
C.Qs = 100 - 2P.
D.Qs = Qd

Accepted Answer

The answer of (Table: Competitive Market for Good Z) Look...

Question 14

(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z.A surplus of the good will occur at a price of _.
A.$0
B.$5
C.$10
D.$15

Accepted Answer

The answer of (Table: Competitive Market for Good Z) Look...

Question 15

Figure: The Market for Candy
  (Figure: The Market for Candy) Look at the figure The Market for Candy.A surplus of the good will exist at a price of: 
A.P₁.
B.P₂.
C.P₃.
D.There are no surpluses in this market.

Accepted Answer

The answer of Figure: The Market for Candy
  (Figure:...

Question 16

Substitutes in production suggest that a producer with a fixed set of resources initially will need to reduce production of one good when the producer:
A.produces less of the other good.
B.produces more of the other good.
C.experiences an increase in resources.
D.produces more of the other good and when the producer experiences an increase in resources.

Accepted Answer

The answer of Substitutes in production suggest that a producer...

Question 17

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:
A.the supply curve for ice cream to shift left.
B.the supply curve for ice cream to shift right.
C.no change in the supply curve for ice cream.
D.a movement along the supply curve for ice cream curve, resulting in more ice cream supplied.

Accepted Answer

An increase in the price of milk, a key ingredient in ice cream production, would lead to an increase in the cost of producing ice cream. This would cause ice cream producers to reduce their supply of ice cream, shifting the supply curve for ice cream to the left. Therefore, the correct answer is A.

Question 18

The demand for a good will increase if:
A.there is a decrease in the price of the good.
B.the price of inputs needed in the production of the good decrease.
C.there is an increase in the number of consumers in this market.
D.the price of a complementary good increases.

Accepted Answer

An increase in the number of consumers in the market will lead to an increase in demand for the good. This is because more people are interested and willing to purchase the good at any given price. Conversely, a decrease in the number of consumers will lead to a decrease in demand. Options A and D are incorrect because a decrease in the price of the good or an increase in the price of a complementary good will affect the quantity demanded of the good, not the overall demand. Option B is incorrect because a decrease in the price of inputs needed in production may lead to an increase in the supply of the good, but it does not necessarily affect the demand.

Question 19

The horizontal summation of individual demand curves for a particular product, holding the quantity demanded constant, is referred to as:
A.market demand.
B.market supply.
C.complements in production.
D.substitutes in production.

Accepted Answer

The answer of The horizontal summation of individual demand curves...

Question 20

When a market is in equilibrium, one will find that the:

Accepted Answer

In a market equilibrium, the quantity demanded by consumers is equal to the quantity supplied by producers. This means that buyers and sellers are both satisfied with the prevailing market price and there is no shortage or surplus of the good or service being traded. Therefore, option B "Quantity demanded is equal to quantity supplied" is the correct answer.

Quiz 3: Supply and Demand

Figure: The Market for Candy (Figure: The Market for Candy) Look at the figure The Market for Candy.Equilibrium occurs at a price of ________, and the equilibrium quantity is equal to _. A.P₁; Q5 B.P₂; Q₃ C.P₃; Q₂ D.P Q

All of the following would result in an increase in the supply of a good except: A.a decrease in resource prices. B.a beneficial technological change. C.an increase in the number of suppliers. D.an increase in input prices.

A farmer finds that when he produces more corn, he also has more corn stalks that he can sell as decorations.To the farmer, corn and corn stalks are: A.complements in production. B.substitutes in production. C.unrelated goods. D.inferior goods.

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

(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z.The equilibrium price and quantity in this market are, respectively: A.$5 and 40 units. B.$20 and 60 units. C.$10 and 30 units. D.$15 and 20 units.

The market for good Y, a perfectly competitive good, is made up of 15 producers who each produce the same amount of good Y.If the price of good Y is currently $100 and the total quantity supplied is 150, how many units of good Y is each producer supplying? A.10 B.150 C.100 D.15

If Benjamin considers sushi to be a normal good and if his income increases by 20%, his purchases of sushi will: A.decrease by 20%. B.increase. C.decrease. D.not change.

(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z.If the demand curve for good Z is linear, it can be expressed as: A.Qd = 3P. B.Qd = 50 - 2P. C.Qd = Qs. D.Qd = 100 - 2P.

(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z.If the supply curve for good Z is linear, it can be expressed as: A.Qs = 3P. B.Qs = 50 - 2P. C.Qs = 100 - 2P. D.Qs = Qd

(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z.A surplus of the good will occur at a price of _. A.$0 B.$5 C.$10 D.$15

Figure: The Market for Candy (Figure: The Market for Candy) Look at the figure The Market for Candy.A surplus of the good will exist at a price of: A.P₁. B.P₂. C.P₃. D.There are no surpluses in this market.

The demand for a good will increase if: A.there is a decrease in the price of the good. B.the price of inputs needed in the production of the good decrease. C.there is an increase in the number of consumers in this market. D.the price of a complementary good increases.

The horizontal summation of individual demand curves for a particular product, holding the quantity demanded constant, is referred to as: A.market demand. B.market supply. C.complements in production. D.substitutes in production.

When a market is in equilibrium, one will find that the: