Question 1

If it is discovered that using a smartphone regularly causes brain cancer,then in the market for smartphones,

Accepted Answer

If using a smartphone regularly is discovered to cause brain cancer, it will decrease demand for smartphones, as fewer people will want to purchase them. This will shift the demand curve to the left, leading to a decrease in both equilibrium price and quantity. Therefore, neither A, C, D or E are correct choices.

Question 2

A market is in equilibrium when a price is low enough for all consumers to afford.

Accepted Answer

A market is in equilibrium when the quantity supplied by producers equals the quantity demanded by consumers at a certain price. The price at which this occurs is not necessarily low enough for all consumers to afford, but rather determined by the intersection of the supply and demand curves.

Question 3

Exhibit 3-4 -Refer to Exhibit 3-4.If S₁ and D₁ are the original supply and demand curves and they shift to S₂ and D₂,respectively,then the new equilibrium price and quantity will be

Accepted Answer

Both the supply and demand curves have shifted to the right, indicating an increase in both supply and demand. This typically results in a higher equilibrium quantity and could lead to a higher or lower equilibrium price depending on the magnitude of the shifts. However, without specific details on the shifts' magnitudes and their effects on price and quantity, it's challenging to deduce the exact changes in equilibrium price and quantity. The choice provided suggests an understanding that both quantity and price are affected by shifts in supply and demand.

Question 4

The U.S.surgeon general warns that animal fat in the diet is unhealthy.With the discovery that longhorn beef cattle have little body fat,you would expect

Accepted Answer

As the demand for lean meat increases due to the health concerns associated with animal fat, ranchers would be more willing to produce longhorn cattle as they have less body fat, making it profitable for them to do so. This would result in a rise in the price of longhorn beef.

Question 5

If incomes increase,then the ____ in the market for luxury cars as normal goods ____.

Accepted Answer

An increase in incomes would lead to an increase in demand for luxury cars as they are normal goods, meaning that as incomes increase, people will purchase more luxury cars, thereby increasing the demand. There is no direct relationship between incomes and supply, so options A and B can be eliminated. Option D is incorrect because as demand increases, suppliers will likely try to meet this increased demand, leading to an increase in supply, not a decrease. Option E is incorrect because there is no indication that the supply would increase as a result of an increase in incomes.

Question 6

Suppose it is observed in a market that price has fallen but more product is being produced and sold.This could be caused by a(n)

Accepted Answer

A fall in price accompanied by an increase in quantity supplied and sold suggests an increase in supply.

Question 7

Exhibit 3-4 -Refer to Exhibit 3-4.If S₂ and D₂ are the original supply and demand curves and,ceteris paribus,supply shifts to S₁,

Accepted Answer

The answer of Exhibit 3-4 -Refer to Exhibit 3-4.If S₂...

Question 8

When both supply and demand shift right at the same time,

Accepted Answer

When both supply and demand increase, it leads to a definite increase in the equilibrium quantity because both forces push the quantity in the same direction. However, the effect on price is ambiguous without knowing the relative magnitudes of the shifts in supply and demand.

Question 9

Suppose it becomes a common belief among consumers that the current cotton crop falls because of a drought,the price of cotton clothing will rise greatly next year.Then in the current market for cotton clothing,the

Accepted Answer

The anticipation of higher future prices for cotton clothing due to a reduced cotton crop can lead consumers to buy more now before prices rise, increasing current demand. This increase in demand shifts the demand curve to the right, leading to a higher equilibrium price and quantity in the current market for cotton clothing.

Question 10

Exhibit 3-4 -In Exhibit 3-4,which of the following is the most likely reason for the shift of the demand curve from D₁ to D₂?

Accepted Answer

The shift of the demand curve from D₁ to D₂ indicates an increase in demand for the good. This could be caused by an increase in the number of consumers who are interested in purchasing the good, which shifts the entire demand curve to the right. Therefore, the most likely reason for the shift is an increase in the number of consumers.

Question 11

If the equilibrium quantity decreases while the equilibrium price increases,which of the following is the most likely reason?

Accepted Answer

When the equilibrium quantity decreases while the equilibrium price increases, it suggests that both supply and demand decrease. This means that there is less of a product available and consumers are still willing to pay a higher price for it.

Question 12

More television sets are being sold today than one year ago,and the selling price has increased.This could have been caused by a(n)

Accepted Answer

An increase in the number of television sets being sold and an increase in price suggest that demand has increased.

Question 13

Exhibit 3-4 -In Exhibit 3-4,if D₁ and S₁ are the original supply and demand curves and D₂ and S₂ are the new curves,respectively,then

Accepted Answer

The answer of Exhibit 3-4 -In Exhibit 3-4,if D₁ and...

Question 14

If a technological improvement took place in the computer industry,we would expect to see the equilibrium price of computers to

Accepted Answer

A technological improvement would lead to an increase in supply of computers, which would shift the supply curve to the right. This would result in a decrease in the equilibrium price of computers and an increase in the quantity of computers sold.

Question 15

Which of the following is the most likely reason for the increase in the price of roses on Valentine's Day?

Accepted Answer

Valentine's Day is a special occasion where people tend to express their love by gifting flowers, especially roses. Hence, the demand for roses increases on this day, leading to an increase in price.

Question 16

When there is a decrease in supply,all else held equal,

Accepted Answer

When there is a decrease in supply, the equilibrium price rises because the goods become scarcer, quantity demanded decreases as a result of the higher price, and the equilibrium quantity decreases because there is less supply available.

Question 17

Suppose computer technicians have been making earning a high wage rate and the number of individuals becoming computer technicians doubles.Then,in the market for computer technicians,

Accepted Answer

When the number of individuals becoming computer technicians doubles, the supply of computer technicians increases. This shifts the supply curve to the right, causing the equilibrium wage rate to fall. Additionally, the increase in supply allows firms to hire more technicians at a lower wage rate, so the quantity of technicians hired increases. Therefore, the best choice is E, as it correctly identifies that the equilibrium wage rate for computer technicians falls.

Question 18

Suppose in a financial crisis,major automakers reduce their production of autos while consumers reduce their demand for autos.We can conclude with certainty that in the market of autos,

Accepted Answer

The answer of Suppose in a financial crisis,major automakers reduce...

Question 19

Exhibit 3-4 -Refer to Exhibit 3-4.If S₁ and D₁ are the original supply and demand curves and,ceteris paribus,demand shifts to D₂,

Accepted Answer

The answer of Exhibit 3-4 -Refer to Exhibit 3-4.If S₁...

Question 20

Exhibit 3-3 
-Refer to Exhibit 3-3.If the price is $27,

Accepted Answer

The answer of Exhibit 3-3 
-Refer to Exhibit 3-3.If the...

Quiz 3: The Supply and Demand Model

If it is discovered that using a smartphone regularly causes brain cancer,then in the market for smartphones,

A market is in equilibrium when a price is low enough for all consumers to afford.

Exhibit 3-4 -Refer to Exhibit 3-4.If S₁ and D₁ are the original supply and demand curves and they shift to S₂ and D₂,respectively,then the new equilibrium price and quantity will be

The U.S.surgeon general warns that animal fat in the diet is unhealthy.With the discovery that longhorn beef cattle have little body fat,you would expect

If incomes increase,then the in the market for luxury cars as normal goods .

Suppose it is observed in a market that price has fallen but more product is being produced and sold.This could be caused by a(n)

Exhibit 3-4 -Refer to Exhibit 3-4.If S₂ and D₂ are the original supply and demand curves and,ceteris paribus,supply shifts to S₁,

When both supply and demand shift right at the same time,

Suppose it becomes a common belief among consumers that the current cotton crop falls because of a drought,the price of cotton clothing will rise greatly next year.Then in the current market for cotton clothing,the

Exhibit 3-4 -In Exhibit 3-4,which of the following is the most likely reason for the shift of the demand curve from D₁ to D₂?

If the equilibrium quantity decreases while the equilibrium price increases,which of the following is the most likely reason?

More television sets are being sold today than one year ago,and the selling price has increased.This could have been caused by a(n)

Exhibit 3-4 -In Exhibit 3-4,if D₁ and S₁ are the original supply and demand curves and D₂ and S₂ are the new curves,respectively,then

If a technological improvement took place in the computer industry,we would expect to see the equilibrium price of computers to

Which of the following is the most likely reason for the increase in the price of roses on Valentine's Day?

When there is a decrease in supply,all else held equal,

Suppose computer technicians have been making earning a high wage rate and the number of individuals becoming computer technicians doubles.Then,in the market for computer technicians,

Suppose in a financial crisis,major automakers reduce their production of autos while consumers reduce their demand for autos.We can conclude with certainty that in the market of autos,

Exhibit 3-4 -Refer to Exhibit 3-4.If S₁ and D₁ are the original supply and demand curves and,ceteris paribus,demand shifts to D₂,

Exhibit 3-3 -Refer to Exhibit 3-3.If the price is $27,

Quiz 3: The Supply and Demand Model

If it is discovered that using a smartphone regularly causes brain cancer,then in the market for smartphones,

A market is in equilibrium when a price is low enough for all consumers to afford.

Exhibit 3-4 -Refer to Exhibit 3-4.If S1 and D1 are the original supply and demand curves and they shift to S2 and D2,respectively,then the new equilibrium price and quantity will be

The U.S.surgeon general warns that animal fat in the diet is unhealthy.With the discovery that longhorn beef cattle have little body fat,you would expect

If incomes increase,then the ____ in the market for luxury cars as normal goods ____.

Suppose it is observed in a market that price has fallen but more product is being produced and sold.This could be caused by a(n)

Exhibit 3-4 -Refer to Exhibit 3-4.If S2 and D2 are the original supply and demand curves and,ceteris paribus,supply shifts to S1,

When both supply and demand shift right at the same time,

Suppose it becomes a common belief among consumers that the current cotton crop falls because of a drought,the price of cotton clothing will rise greatly next year.Then in the current market for cotton clothing,the

Exhibit 3-4 -In Exhibit 3-4,which of the following is the most likely reason for the shift of the demand curve from D1 to D2?

If the equilibrium quantity decreases while the equilibrium price increases,which of the following is the most likely reason?

More television sets are being sold today than one year ago,and the selling price has increased.This could have been caused by a(n)

Exhibit 3-4 -In Exhibit 3-4,if D1 and S1 are the original supply and demand curves and D2 and S2 are the new curves,respectively,then

If a technological improvement took place in the computer industry,we would expect to see the equilibrium price of computers to

Which of the following is the most likely reason for the increase in the price of roses on Valentine's Day?

When there is a decrease in supply,all else held equal,

Suppose computer technicians have been making earning a high wage rate and the number of individuals becoming computer technicians doubles.Then,in the market for computer technicians,

Suppose in a financial crisis,major automakers reduce their production of autos while consumers reduce their demand for autos.We can conclude with certainty that in the market of autos,

Exhibit 3-4 -Refer to Exhibit 3-4.If S1 and D1 are the original supply and demand curves and,ceteris paribus,demand shifts to D2,

Exhibit 3-3 -Refer to Exhibit 3-3.If the price is $27,

Exhibit 3-4 -Refer to Exhibit 3-4.If S₁ and D₁ are the original supply and demand curves and they shift to S₂ and D₂,respectively,then the new equilibrium price and quantity will be

If incomes increase,then the in the market for luxury cars as normal goods .

Exhibit 3-4 -Refer to Exhibit 3-4.If S₂ and D₂ are the original supply and demand curves and,ceteris paribus,supply shifts to S₁,

Exhibit 3-4 -In Exhibit 3-4,which of the following is the most likely reason for the shift of the demand curve from D₁ to D₂?

Exhibit 3-4 -In Exhibit 3-4,if D₁ and S₁ are the original supply and demand curves and D₂ and S₂ are the new curves,respectively,then

Exhibit 3-4 -Refer to Exhibit 3-4.If S₁ and D₁ are the original supply and demand curves and,ceteris paribus,demand shifts to D₂,