Question 1

Exhibit 5-1 The diagram below represents the market for butter.  Refer to Exhibit 5-1.If a price floor of $4 is imposed,____ units of butter will be sold.

Accepted Answer

The answer of Exhibit 5-1 The diagram below represents the...

Question 2

Exhibit 5-2 Refer to Exhibit 5-2.A movement from S₁ to S₂ could occur if:

Accepted Answer

The answer of Exhibit 5-2  Refer to Exhibit 5-2.A...

Question 3

A simultaneous increase in demand and decrease in supply would lead to:

Accepted Answer

An increase in demand tends to raise both price and quantity, while a decrease in supply tends to raise price but lower quantity. The net effect on quantity is uncertain, but the price will definitely increase.

Question 4

Coca-Cola bottlers increased their prices as the price of sugar (an important ingredient in producing Coke)rose sharply in the late 1980s.Under these circumstances,the increase in the price of Coke occurs as a result of a(n):

Accepted Answer

An increase in the price of a key ingredient for producing Coke (sugar) would lead to a decrease in supply, as bottlers would need to pay more to produce the same quantity of Coke. This would result in higher costs for bottlers, leading them to increase the price of Coke. Therefore, the increase in the price of Coke is a result of a decrease in supply.

Question 5

Which of the following would most likely increase the price of chicken,a normal good?

Accepted Answer

Unusually hot weather that kills millions of chickens before they are ready for market would decrease the supply of chicken, which would increase the price. A reduction in the price of grains used to produce chicken feed would decrease the costs of production for chicken farmers, which could potentially decrease the price of chicken. A reduction in the price of a substitute for chicken (beef) would decrease the demand for chicken, which could potentially decrease the price. A decrease in consumer income could lead to a decrease in demand for chicken, which could potentially decrease the price.

Question 6

A more efficient process for refining oil into gasoline is developed.As a result,the market price of gasoline:

Accepted Answer

A more efficient refining process reduces the cost of producing gasoline, leading to a decrease in its market price. As the price decreases, consumers are likely to buy more, hence the quantity of gasoline purchased rises. This reflects a movement along the demand curve, not a shift of the demand curve itself.

Question 7

If the price of ice cream increases substantially (ceteris paribus),the equilibrium quantity of hot fudge sauce,a complement,is likely to:

Accepted Answer

If the price of ice cream increases substantially, it will lead to a decrease in the demand for ice cream. As hot fudge sauce is a complement to ice cream, the decrease in the demand for ice cream will lead to a decrease in the demand for hot fudge sauce as well. Thus, the equilibrium quantity of hot fudge sauce is likely to decrease. As for its equilibrium price, it is likely to decrease as well due to the decrease in demand.

Question 8

In 1975 a pocket calculator cost more than $50; in 1990 a calculator of the same quality cost less than $10.Which of the following explanations is most consistent with these facts?

Accepted Answer

An improvement in technology caused the supply of calculators to increase, depressing their price.

Question 9

A safety report is released that contends that sport utility vehicles are prone to roll over during crashes.At the same time,the price of steel (used to produce motor vehicles)increases.The net effect of these two incidents on the market for sport utility vehicles is a(n):

Accepted Answer

The answer of A safety report is released that contends...

Question 10

Exhibit 5-2  Refer to Exhibit 5-2.The movement from ____ is consistent with an increase in supply.

Accepted Answer

The answer of Exhibit 5-2  Refer to Exhibit 5-2.The...

Question 11

Exhibit 5-1 The diagram below represents the market for butter.  Refer to Exhibit 5-1.If a price ceiling of $2 is imposed,____ units of butter will be sold.

Accepted Answer

The answer of Exhibit 5-1 The diagram below represents the...

Question 12

A major grocery store chain switches from bagging groceries in paper sacks to bagging them in plastic bags.The grocery chain demands more plastic bags than are available at the current market price.As a result:

Accepted Answer

With the increased demand for plastic bags, the market price for plastic bags is likely to increase. The switch from paper to plastic bags does not directly impact the demand for paper sacks or their market price.

Question 13

Ceteris paribus,the fear among travelers created by the 9-11 attacks would have what impact on the market for air travel?

Accepted Answer

The fear among travelers due to the 9-11 attacks would decrease the demand for air travel, leading to a decrease in both the equilibrium price and quantity as fewer people are willing to fly, reducing the overall demand in the market.

Question 14

Exhibit 5-2 Refer to Exhibit 5-2.A movement from D₁ to D₂ could occur if:

Accepted Answer

The answer of Exhibit 5-2  Refer to Exhibit 5-2.A...

Question 15

Exhibit 5-2  Refer to Exhibit 5-2.The movement from ____ is consistent with a decrease in demand.

Accepted Answer

The answer of Exhibit 5-2  Refer to Exhibit 5-2.The...

Question 16

In an effort to reduce the surplus of dairy products,agricultural legislation paid dairy farmers to slaughter their herds and sell them to packinghouses (meat producers)in 1996-1997.How did this influence the market for beef?

Accepted Answer

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Question 17

Exhibit 5-3 Use the following information about demand and supply schedules to answer the question. Refer to Exhibit 5-3.If D₁ and S₁ represent the demand and supply schedules in a particular market,the equilibrium price and quantity are ____ and ____,respectively.

Accepted Answer

The answer of Exhibit 5-3 Use the following information about...

Question 18

Cold weather in the Midwestern and eastern United States increases the popularity of vacations in sunny California.At the same time,the hotel employees' union in California negotiates a significant pay increase for its members.The likely impact on the hotel market in California is:

Accepted Answer

The answer of Cold weather in the Midwestern and eastern...

Question 19

Exhibit 5-1 The diagram below represents the market for butter.  Refer to Exhibit 5-1.If a price ceiling of $4 is imposed,we would expect that ____ units of butter will be sold.

Accepted Answer

The answer of Exhibit 5-1 The diagram below represents the...

Question 20

Exhibit 5-2 Refer to Exhibit 5-2.A movement from S₁ to S₃ could occur if:

Accepted Answer

The answer of Exhibit 5-2  Refer to Exhibit 5-2.A...

Quiz 5: Markets in Motion and Price Controls

Exhibit 5-1 The diagram below represents the market for butter. Refer to Exhibit 5-1.If a price floor of $4 is imposed,____ units of butter will be sold.

Exhibit 5-2 Refer to Exhibit 5-2.A movement from S₁ to S₂ could occur if:

A simultaneous increase in demand and decrease in supply would lead to:

Coca-Cola bottlers increased their prices as the price of sugar (an important ingredient in producing Coke) rose sharply in the late 1980s.Under these circumstances,the increase in the price of Coke occurs as a result of a(n) :

Which of the following would most likely increase the price of chicken,a normal good?

A more efficient process for refining oil into gasoline is developed.As a result,the market price of gasoline:

If the price of ice cream increases substantially (ceteris paribus) ,the equilibrium quantity of hot fudge sauce,a complement,is likely to:

In 1975 a pocket calculator cost more than $50; in 1990 a calculator of the same quality cost less than $10.Which of the following explanations is most consistent with these facts?

A safety report is released that contends that sport utility vehicles are prone to roll over during crashes.At the same time,the price of steel (used to produce motor vehicles) increases.The net effect of these two incidents on the market for sport utility vehicles is a(n) :

Exhibit 5-2 Refer to Exhibit 5-2.The movement from ____ is consistent with an increase in supply.

Exhibit 5-1 The diagram below represents the market for butter. Refer to Exhibit 5-1.If a price ceiling of $2 is imposed,____ units of butter will be sold.

A major grocery store chain switches from bagging groceries in paper sacks to bagging them in plastic bags.The grocery chain demands more plastic bags than are available at the current market price.As a result:

Ceteris paribus,the fear among travelers created by the 9-11 attacks would have what impact on the market for air travel?

Exhibit 5-2 Refer to Exhibit 5-2.A movement from D₁ to D₂ could occur if:

Exhibit 5-2 Refer to Exhibit 5-2.The movement from ____ is consistent with a decrease in demand.

In an effort to reduce the surplus of dairy products,agricultural legislation paid dairy farmers to slaughter their herds and sell them to packinghouses (meat producers) in 1996-1997.How did this influence the market for beef?

Exhibit 5-3 Use the following information about demand and supply schedules to answer the question. Refer to Exhibit 5-3.If D₁ and S₁ represent the demand and supply schedules in a particular market,the equilibrium price and quantity are and ,respectively.

Cold weather in the Midwestern and eastern United States increases the popularity of vacations in sunny California.At the same time,the hotel employees' union in California negotiates a significant pay increase for its members.The likely impact on the hotel market in California is:

Exhibit 5-1 The diagram below represents the market for butter. Refer to Exhibit 5-1.If a price ceiling of $4 is imposed,we would expect that ____ units of butter will be sold.

Exhibit 5-2 Refer to Exhibit 5-2.A movement from S₁ to S₃ could occur if:

Quiz 5: Markets in Motion and Price Controls

Exhibit 5-1 The diagram below represents the market for butter. Refer to Exhibit 5-1.If a price floor of $4 is imposed,____ units of butter will be sold.

Exhibit 5-2 Refer to Exhibit 5-2.A movement from S1 to S2 could occur if:

A simultaneous increase in demand and decrease in supply would lead to:

Coca-Cola bottlers increased their prices as the price of sugar (an important ingredient in producing Coke) rose sharply in the late 1980s.Under these circumstances,the increase in the price of Coke occurs as a result of a(n) :

Which of the following would most likely increase the price of chicken,a normal good?

A more efficient process for refining oil into gasoline is developed.As a result,the market price of gasoline:

If the price of ice cream increases substantially (ceteris paribus) ,the equilibrium quantity of hot fudge sauce,a complement,is likely to:

In 1975 a pocket calculator cost more than $50; in 1990 a calculator of the same quality cost less than $10.Which of the following explanations is most consistent with these facts?

A safety report is released that contends that sport utility vehicles are prone to roll over during crashes.At the same time,the price of steel (used to produce motor vehicles) increases.The net effect of these two incidents on the market for sport utility vehicles is a(n) :

Exhibit 5-2 Refer to Exhibit 5-2.The movement from ____ is consistent with an increase in supply.

Exhibit 5-1 The diagram below represents the market for butter. Refer to Exhibit 5-1.If a price ceiling of $2 is imposed,____ units of butter will be sold.

A major grocery store chain switches from bagging groceries in paper sacks to bagging them in plastic bags.The grocery chain demands more plastic bags than are available at the current market price.As a result:

Ceteris paribus,the fear among travelers created by the 9-11 attacks would have what impact on the market for air travel?

Exhibit 5-2 Refer to Exhibit 5-2.A movement from D1 to D2 could occur if:

Exhibit 5-2 Refer to Exhibit 5-2.The movement from ____ is consistent with a decrease in demand.

In an effort to reduce the surplus of dairy products,agricultural legislation paid dairy farmers to slaughter their herds and sell them to packinghouses (meat producers) in 1996-1997.How did this influence the market for beef?

Exhibit 5-3 Use the following information about demand and supply schedules to answer the question. Refer to Exhibit 5-3.If D1 and S1 represent the demand and supply schedules in a particular market,the equilibrium price and quantity are ____ and ____,respectively.

Cold weather in the Midwestern and eastern United States increases the popularity of vacations in sunny California.At the same time,the hotel employees' union in California negotiates a significant pay increase for its members.The likely impact on the hotel market in California is:

Exhibit 5-1 The diagram below represents the market for butter. Refer to Exhibit 5-1.If a price ceiling of $4 is imposed,we would expect that ____ units of butter will be sold.

Exhibit 5-2 Refer to Exhibit 5-2.A movement from S1 to S3 could occur if:

Exhibit 5-2 Refer to Exhibit 5-2.A movement from S₁ to S₂ could occur if:

Exhibit 5-2 Refer to Exhibit 5-2.A movement from D₁ to D₂ could occur if:

Exhibit 5-3 Use the following information about demand and supply schedules to answer the question. Refer to Exhibit 5-3.If D₁ and S₁ represent the demand and supply schedules in a particular market,the equilibrium price and quantity are and ,respectively.

Exhibit 5-2 Refer to Exhibit 5-2.A movement from S₁ to S₃ could occur if: