Question 1

A rightward shift of a supply curve

Accepted Answer

A rightward shift of a supply curve indicates an increase in supply, which would lead to an excess quantity supplied at the previous equilibrium price if demand remains unchanged.

Question 2

Exhibit 4-4  Refer to Exhibit 4-4.Which of the following would cause a shift of demand from D' to D?

Accepted Answer

The answer of Exhibit 4-4  Refer to Exhibit 4-4.Which...

Question 3

If the tea harvest is bad in a particular year, what will happen in the market for coffee?

Accepted Answer

If the tea harvest is bad, consumers may switch to coffee as a substitute, increasing the demand for coffee. This leads to an increase in both the price and quantity of coffee in the market.

Question 4

An increase in supply will cause equilibrium price to __________ and equilibrium quantity to __________.

Accepted Answer

According to the law of supply, as the supply of a good or service increases, its price decreases. This is because an increase in supply means producers are willing and able to sell more at each price level, resulting in a surplus. As a result, purchasers will demand lower prices to buy more of the excess supply, leading to a decrease in the equilibrium price. At the same time, suppliers will be willing to sell more goods at the lower price, resulting in an increase in the equilibrium quantity.

Question 5

The market for chewing gum is competitive with a current price of 50 cents per pack and quantity of 100, 000 packs.Which of the following events would lead to a new equilibrium price of 40 cents and quantity of 80, 000 packs?

Accepted Answer

A decrease in the number of young people in the population would reduce the demand for chewing gum, leading to a lower equilibrium price and quantity.

Question 6

What is the effect of a decrease in the price of potato chips on the market for pretzels?

Accepted Answer

A decrease in the price of potato chips, a substitute for pretzels, will likely lead to a decrease in the demand for pretzels. This results in both the equilibrium price and quantity of pretzels falling.

Question 7

The market for chewing gum is competitive with a current price of 50 cents per pack and a quantity of 100, 000 packs per day.Which of the following events would lead to a new equilibrium price of 75 cents and a new equilibrium quantity of 125, 000?

Accepted Answer

An increase in the price of other kinds of candy would likely increase the demand for chewing gum as a substitute, leading to a higher equilibrium price and quantity.

Question 8

For a given supply curve, an increase in demand will typically

Accepted Answer

According to the law of supply and demand, an increase in demand with a fixed supply will lead to an increase in both quantity and price. This is because consumers will be willing to pay more for the limited quantity of the good or service available. As a result, the equilibrium price will increase and the equilibrium quantity demanded will also increase. Therefore, the best choice is E- increase both quantity and price.

Question 9

An increase in demand for chocolate chips would usually result in a(n)

Accepted Answer

An increase in demand results in a shift of the demand curve to the right, leading to a higher equilibrium price and a higher equilibrium quantity. This is because consumers are willing to pay more for the same quantity of chocolate chips due to the increase in demand. Therefore, the equilibrium point moves along the supply curve to a higher price and quantity level.

Question 10

A decrease in supply will cause a(n)

Accepted Answer

A decrease in supply means that the quantity supplied at each price level decreases. This will lead to a decrease in the quantity demanded, as consumers are willing to pay less for the good or service.

Question 11

Velcro is becoming more and more popular for a variety of uses, including as fasteners for shoes.What should happen to the equilibrium price and quantity for shoelaces as a result?

Accepted Answer

As Velcro becomes more popular, the demand for shoelaces decreases, leading to a decrease in both the equilibrium price and quantity of shoelaces.

Question 12

Which of the following would cause both the equilibrium price and equilibrium quantity of cookies to decrease?

Accepted Answer

A rise in the price of milk, a complement to cookies, would decrease the demand for cookies, leading to a decrease in both equilibrium price and quantity.

Question 13

Exhibit 4-4  Refer to Exhibit 4-4.A shift from demand curve D to D' illustrates a(n)

Accepted Answer

The shift from D to D' represents an increase in quantity demanded at each price level, indicating an overall increase in demand.

Question 14

Suppose that the price of compact disks (CDs)increases, other things equal.Which of the following in the most likely effect in the market for DVDs?

Accepted Answer

CDs and DVDs are substitute goods. If the price of CDs increases, consumers may switch to buying more DVDs, leading to an increase in demand for DVDs.

Question 15

A decrease in demand will cause a(n)

Accepted Answer

A decrease in demand means that consumers are buying less of a product, which leads to an oversupply of the product. This excess supply will cause sellers to lower the price in order to attract more buyers and clear their inventory, resulting in a decrease in equilibrium price.

Question 16

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes.If these attempts are successful, what will happen to the equilibrium price and quantity of potatoes?

Accepted Answer

If biodegradable plastics are successfully developed using potatoes, the demand for potatoes will increase as they will be used for both food and plastic production. This increased demand will lead to a higher equilibrium price and quantity for potatoes.

Question 17

Exhibit 4-4  In Exhibit 4-4, which of the following could not cause the shift from D to D'?

Accepted Answer

The answer of Exhibit 4-4  In Exhibit 4-4, which...

Question 18

If the demand for bicycles increases,

Accepted Answer

When demand increases, the equilibrium price rises, leading to an increase in the quantity supplied as suppliers respond to the higher price.

Question 19

A decrease in demand will result in a(n)

Accepted Answer

A decrease in demand leads to a lower equilibrium price and quantity as the demand curve shifts leftward, reducing both the price and quantity at which the market clears.

Question 20

If the tea harvest is bad in a particular year, the supply of tea will

Accepted Answer

If the tea harvest is bad, the supply of tea will decrease. This will cause the price of tea to increase. As the price of tea increases, the quantity demanded of tea will decrease. As the price of tea increases, the quantity demanded of coffee will increase.

Quiz 4: Demand, Supply, and Markets