Question 1

If the price of rubber were to increase by 20% over the fiscal year and if all else were held constant, what would you expect to happen to the supply curve of tires that are sold separately from automobiles?

Accepted Answer

An increase in the cost of rubber would increase the production cost of tires. This would cause tire manufacturers to decrease the quantity supplied at any given price, resulting in a leftward shift of the supply curve.

Question 2

Refer to the accompanying graph. If consumers expect the price of a good to decrease in the future and all else is held constant, we would assume that the demand curve would:

Accepted Answer

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

Question 3

As more people migrated West during the gold rush, what do you think happened to the demand curve in most Western markets, holding all else constant?

Accepted Answer

As more people migrated West during the gold rush, the population in Western markets increased, leading to an increase in demand for goods and services. This would shift the demand curve to the right.

Question 4

An expectation of a lower price in the future will:

Accepted Answer

If consumers expect a lower price in the future, they are likely to delay their purchase until the price drops. This will result in a decrease in current demand.

Question 5

Which of the following is both a shift in supply and a shift in demand?

Accepted Answer

Expectations of future prices can both shift the supply curve and the demand curve. If sellers expect higher prices in the future, they might hold off on selling now, shifting the supply curve to the left. Similarly, if buyers expect higher prices in the future, they might increase their purchases now, shifting the demand curve to the right.

Question 6

Assume there are 100 suppliers of widgets in the widget market. Half of these suppliers supply 35 widgets to the market each, a quarter of these suppliers supply 40 widgets to the market each, and a quarter of these suppliers supply 50 widgets to the market each. What is the market supply for widgets?

Accepted Answer

The answer of Assume there are 100 suppliers of widgets...

Question 7

Changes in population can:

Accepted Answer

The answer of Changes in population can:
...

Question 8

Chuck drives past the same gas station every day. He realizes that the gas station always changes its prices on Tuesdays but keeps the price steady the rest of the week. On Saturday, Chuck turns on the news and hears a report projecting that the price of gasoline is going to increase. Holding all else constant, what do you think would happen to Chuck's demand for gasoline on Monday?

Accepted Answer

The answer of Chuck drives past the same gas station...

Question 9

A supply schedule:

Accepted Answer

A supply schedule is a table that shows the quantity of a good or service that producers are willing and able to supply at different prices. It is not a curve or list of goods, and it can be used to analyze both individual and market supply.

Question 10

If the cost of flour increases from $3 to $5 a bag, you could predict the supply curve for bagels to:

Accepted Answer

The increase in the cost of flour would increase the cost of production for bagels, which would decrease the profitability of producing bagels. As a result, bagel producers would supply fewer bagels, causing the supply curve to shift to the left.

Question 11

The law of supply states that, all other things being equal,

Accepted Answer

The law of supply indicates that there is a direct relationship between price and quantity supplied: as the price increases, sellers are willing to supply more, and as the price decreases, they are willing to supply less.

Question 12

Inputs are:

Accepted Answer

The answer of Inputs are:
...

Question 13

The demand curve for a good will shift to the right if, holding all else constant,

Accepted Answer

A demand curve shifts to the right when there is an increase in demand. If consumers expect future prices to increase, they are more likely to buy the good now to avoid paying a higher price later, thus increasing current demand.

Question 14

-Refer to the accompanying diagram. An increase in the number of buyers would cause the demand curve to:

Accepted Answer

An increase in the number of buyers would increase the demand for the product, causing the demand curve to shift to the right from D₁ to D₂.

Question 15

Which of the following will cause a movement along a good's supply curve?

Accepted Answer

A movement along a good's supply curve is caused by a change in its price. An increase in price will cause suppliers to produce more of the good, resulting in a movement along the supply curve. The other options listed may cause a shift in the supply curve, but not a movement along it.

Question 16

-Refer to the accompanying figure. When the price changes from P₁ to P₂, we will see a(n):

Accepted Answer

The answer of 
-Refer to the accompanying figure. When the...

Question 17

In March 2012, the state of California started requiring that all packaging for food and drink with the additive 4-methylimidazole (4-MI) be clearly labeled with a cancer warning. Because of this, both Pepsi and Coke changed their formula to eliminate 4-MI as an ingredient. If Pepsi and Coke did NOT change their formula, holding all else constant, what do you think would have happened to the demand for these goods, assuming Pepsi and Coke were in a competitive market?

Accepted Answer

The addition of a cancer warning label would likely have decreased consumer demand for Pepsi and Coke, causing the demand curve to shift to the left. This would result in lower prices and decreased profits for both companies. As substitutes, the demand curve for both products would likely shift by a similar amount.

Question 18

As the life expectancy in the United States increases, which of the following could likely happen to the demand curve for items such as health care, cancer treatments, and nursing facilities, holding all else constant, and why?

Accepted Answer

As life expectancy increases, there will be more individuals requiring health care, cancer treatments, and nursing facilities. This will increase the overall number of buyers in these markets, causing an increase in demand.

Question 19

A change in quantity supplied:

Accepted Answer

A change in quantity supplied is a movement along the supply curve, caused by a change in the price of the good. It does not involve a shift in the entire supply curve.

Question 20

Higher input costs:

Accepted Answer

Higher input costs increase the cost of production, leading to lower profit margins for the firm.

Quiz 3: The Market at Work: Supply and Demand

If the price of rubber were to increase by 20% over the fiscal year and if all else were held constant, what would you expect to happen to the supply curve of tires that are sold separately from automobiles?

Refer to the accompanying graph. If consumers expect the price of a good to decrease in the future and all else is held constant, we would assume that the demand curve would:

As more people migrated West during the gold rush, what do you think happened to the demand curve in most Western markets, holding all else constant?

An expectation of a lower price in the future will:

Which of the following is both a shift in supply and a shift in demand?

Changes in population can:

A supply schedule:

If the cost of flour increases from $3 to $5 a bag, you could predict the supply curve for bagels to:

The law of supply states that, all other things being equal,

Inputs are:

The demand curve for a good will shift to the right if, holding all else constant,

-Refer to the accompanying diagram. An increase in the number of buyers would cause the demand curve to:

Which of the following will cause a movement along a good's supply curve?

-Refer to the accompanying figure. When the price changes from P₁ to P₂, we will see a(n) :

As the life expectancy in the United States increases, which of the following could likely happen to the demand curve for items such as health care, cancer treatments, and nursing facilities, holding all else constant, and why?

A change in quantity supplied:

Higher input costs:

Quiz 3: The Market at Work: Supply and Demand

If the price of rubber were to increase by 20% over the fiscal year and if all else were held constant, what would you expect to happen to the supply curve of tires that are sold separately from automobiles?

Refer to the accompanying graph. If consumers expect the price of a good to decrease in the future and all else is held constant, we would assume that the demand curve would:

As more people migrated West during the gold rush, what do you think happened to the demand curve in most Western markets, holding all else constant?

An expectation of a lower price in the future will:

Which of the following is both a shift in supply and a shift in demand?

Changes in population can:

A supply schedule:

If the cost of flour increases from $3 to $5 a bag, you could predict the supply curve for bagels to:

The law of supply states that, all other things being equal,

Inputs are:

The demand curve for a good will shift to the right if, holding all else constant,

-Refer to the accompanying diagram. An increase in the number of buyers would cause the demand curve to:

Which of the following will cause a movement along a good's supply curve?

-Refer to the accompanying figure. When the price changes from P1 to P2, we will see a(n) :

As the life expectancy in the United States increases, which of the following could likely happen to the demand curve for items such as health care, cancer treatments, and nursing facilities, holding all else constant, and why?

A change in quantity supplied:

Higher input costs:

-Refer to the accompanying figure. When the price changes from P₁ to P₂, we will see a(n) :