Question 1

Suppose that people decide riding scooters is no longer fun.The equilibrium price of a scooter ________,and the equilibrium quantity of scooters ________.

Accepted Answer

If people decide riding scooters is no longer fun, the demand for scooters will decrease, causing a leftward shift of the demand curve. This will result in a lower equilibrium price and quantity, as the market adjusts to the decrease in demand. Therefore, the equilibrium price of a scooter falls, and the equilibrium quantity of scooters decreases.

Question 2

If the supply of solar panels increases,

Accepted Answer

An increase in supply leads to a surplus, pushing down prices due to competition among suppliers. As the price of solar panels decreases, the quantity demanded increases due to the affordability of the product. Therefore, the price of solar panels decreases and the quantity demanded increases.

Question 3

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

Accepted Answer

If the demand for new houses increase and the supply remains unchanged, then both the equilibrium price and quantity of new houses will increase. This is because the increase in demand will cause a shortage of new houses, which will lead to an increase in price and quantity. Options A, C, D and E do not accurately explain the increase in equilibrium price and quantity of new houses.

Question 4

Suppose the equilibrium price of movie tickets is $10.If the supply curve for movies shifts ________,the equilibrium price will ________.

Accepted Answer

When the supply curve shifts rightward, it indicates an increase in supply. This leads to a decrease in the equilibrium price as more movie tickets become available at every price level.

Question 5

If good weather conditions result in a larger than normal crop of peaches,then the

Accepted Answer

When there is a larger than normal crop of peaches, the supply of peaches will increase. This will shift the supply curve to the right, causing a surplus of peaches at the previous equilibrium price. In order to clear this surplus, the price of peaches will need to fall until the quantity demanded increases to match the new quantity supplied. Therefore, the equilibrium price of peaches falls, and the equilibrium quantity of peaches increases, making option B the correct choice.

Question 6

Bagels and cream cheese are complementary goods.Suppose that the price for flour,which is used to produce bagels,increases.The equilibrium price of cream cheese ________,and the equilibrium quantity of cream cheese ________.

Accepted Answer

Since bagels and cream cheese are complementary goods, an increase in the price of flour (leading to higher costs for producing bagels, and likely higher prices for bagels) would decrease the demand for both bagels and their complement, cream cheese. This would lead to a fall in the equilibrium price of cream cheese and a decrease in the equilibrium quantity of cream cheese.

Question 7

An increase in the equilibrium price and a decrease in the equilibrium quantity can be the result of

Accepted Answer

A decrease in supply will shift the supply curve leftward, causing an increase in equilibrium price and a decrease in equilibrium quantity.

Question 8

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

Accepted Answer

An increase in home buyers moving into the area would increase demand for new houses, causing an increase in both price and quantity.

Option A is incorrect because an increase in the wage paid to carpenters would increase the cost of production and decrease the supply, causing price to increase and quantity to decrease, resulting in an uncertain outcome on the equilibrium.

Option B is incorrect because a technological advance would lead to a decrease in cost of production but may affect the supply curve, causing an uncertain outcome on the equilibrium.

Option C is also incorrect because a decrease in the rent of nearby apartments would lead to people buying fewer new houses and demand for new houses would decrease.

Option E is also incorrect because a decrease in the cost of wood framing would increase supply but may affect the demand curve, causing an uncertain outcome on the equilibrium.

Question 9

Because of a sharp increase in the price of gasoline,the demand for Sports Utility vehicles (SUVs)has decreased.So,the high price of gasoline leads to a

Accepted Answer

The increase in the price of gasoline leads to a decrease in the demand for SUVs, which causes a leftward shift in the demand curve for SUVs. However, there is no reason for the supply of SUVs to change solely based on the price of gasoline, so there is no shift in the supply curve. Therefore, the best choice is B - a leftward shift of the demand curve for SUVs and no shift in the supply curve of SUVs.

Question 10

If a freeze destroys oranges before they are harvested,the equilibrium price of an orange ________ and the equilibrium quantity ________.

Accepted Answer

A freeze destroying oranges before they are harvested would reduce the supply of oranges. This decrease in supply, with demand remaining constant, would lead to an increase in the equilibrium price and a decrease in the equilibrium quantity.

Question 11

Computer chips are a normal good.Suppose the economy slips into a recession so that income falls.As a result,the demand for computer chips ________ so that the price of a computer chip ________.

Accepted Answer

As income falls during a recession, people are likely to have less disposable income to spend on luxury items, such as computers or electronics. Therefore, the demand for computer chips will decrease, and as a result, the price of a computer chip will fall.

Question 12

If the price of tangerines increases,the price of oranges also rises because

Accepted Answer

When the price of tangerines increases, consumers may choose to switch to buying oranges instead, viewing them as substitutes. This will increase demand for oranges and cause the price of oranges to rise as well.

Question 13

Suppose that the price of bread rises.This rise could be the result of

Accepted Answer

A decrease in the supply of bread would lead to a rise in its price due to the basic economic principle of supply and demand. When supply decreases and demand remains constant, prices tend to increase.

Question 14

Assume a market is in equilibrium.There is an increase in supply,but no change in demand As a result the equilibrium price ________,and the equilibrium quantity ________.

Accepted Answer

When supply increases but demand remains constant, the equilibrium price falls due to the surplus of goods, and the equilibrium quantity increases as more of the good is available at a lower price.

Question 15

Which of the following lowers the equilibrium price of a canoe?

Accepted Answer

An increase in the supply of canoes, without a change in demand, typically results in a lower equilibrium price because more canoes are available for sale, which often leads to sellers reducing prices to attract buyers.

Question 16

If consumers buy a large number of plug-in electric cars,the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.

Accepted Answer

The demand for electricity will increase as more consumers use electric cars, leading to a higher equilibrium price and an increased equilibrium quantity of electricity. This is because the demand curve for electricity shifts to the right, causing both the price and quantity to rise in the market.

Question 17

The initial equilibrium price in the market for Web pages is $200 per page and 1000 Web pages are created in a month.Many new Web design firms now enter the market.As a result,

Accepted Answer

With the entry of new Web design firms, the supply of Web pages will increase. This shift in the supply curve will lead to an increase in the quantity supplied at every price level, leading to a surplus of Web pages. The increased competition among the firms will also compel them to lower their prices to attract customers. Therefore, the price of Web pages will fall.

Question 18

For consumers,taco chips and salsa are complements.If the price of salsa rises,what is the effect on the equilibrium price and quantity of taco chips?

Accepted Answer

Taco chips and salsa are complementary goods, which means that they are typically consumed together. If the price of salsa rises, consumers will likely purchase less salsa, and therefore, they will also purchase fewer taco chips. As a result, the demand for taco chips will fall, which will lead to a decrease in the equilibrium price and quantity of taco chips.

Question 19

Suppose that over the next few years the demand for dancing to country and western music decreases.Hence,at country and western dance clubs the equilibrium price of admission ________ and the equilibrium quantity of dancing ________.

Accepted Answer

If the demand for dancing to country and western music decreases, this will create a surplus of dance club spaces (since there will be fewer people wanting to dance), which will lead to a decrease in the equilibrium price (as dance clubs will have to lower their prices to attract customers). Furthermore, the equilibrium quantity demanded of dancing will also decrease (as fewer people want to dance), leading to a decrease in the equilibrium quantity. Therefore, the correct answer is D.

Question 20

When personal computers were first produced,the price was very high.As time passed,the price of personal computers fell because

Accepted Answer

Technological advances in the production of personal computers allowed for more efficient and cost-effective manufacturing processes, leading to a decrease in the price of personal computers over time.

Quiz 4: Demand and Supply

Suppose that people decide riding scooters is no longer fun.The equilibrium price of a scooter ,and the equilibrium quantity of scooters .

If the supply of solar panels increases,

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

Suppose the equilibrium price of movie tickets is $10.If the supply curve for movies shifts ,the equilibrium price will .

If good weather conditions result in a larger than normal crop of peaches,then the

Bagels and cream cheese are complementary goods.Suppose that the price for flour,which is used to produce bagels,increases.The equilibrium price of cream cheese ,and the equilibrium quantity of cream cheese .

An increase in the equilibrium price and a decrease in the equilibrium quantity can be the result of

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

Because of a sharp increase in the price of gasoline,the demand for Sports Utility vehicles (SUVs) has decreased.So,the high price of gasoline leads to a

If a freeze destroys oranges before they are harvested,the equilibrium price of an orange and the equilibrium quantity .

Computer chips are a normal good.Suppose the economy slips into a recession so that income falls.As a result,the demand for computer chips so that the price of a computer chip .

If the price of tangerines increases,the price of oranges also rises because

Suppose that the price of bread rises.This rise could be the result of

Assume a market is in equilibrium.There is an increase in supply,but no change in demand As a result the equilibrium price ,and the equilibrium quantity .

Which of the following lowers the equilibrium price of a canoe?

If consumers buy a large number of plug-in electric cars,the equilibrium price of electricity will and the equilibrium quantity of electricity will .

The initial equilibrium price in the market for Web pages is $200 per page and 1000 Web pages are created in a month.Many new Web design firms now enter the market.As a result,

For consumers,taco chips and salsa are complements.If the price of salsa rises,what is the effect on the equilibrium price and quantity of taco chips?

Suppose that over the next few years the demand for dancing to country and western music decreases.Hence,at country and western dance clubs the equilibrium price of admission and the equilibrium quantity of dancing .

When personal computers were first produced,the price was very high.As time passed,the price of personal computers fell because