Question 1

The supply curve for apartments in Oregon reflects how many apartments landlords are willing and able to offer for rent at various prices.

Accepted Answer

The supply curve represents the quantity of a good or service that producers are willing and able to sell at different prices. In this case, landlords are the producers supplying apartments for rent, so the supply curve for apartments in Oregon reflects how many apartments landlords are willing and able to offer for rent at various prices.

Question 2

After graduation many students' demand for used cars decreases.This may be because used cars are considered a normal good to college graduates.

Accepted Answer

The decrease in demand for used cars after graduation is likely because used cars are considered an inferior good to college graduates, who may now have higher incomes and prefer newer or higher-quality vehicles.

Question 3

Assume that corn is an input in the production of beef but not in the production of pork.Further,beef and pork are substitutes in consumption.A decrease in the price of corn will _____ the supply of beef and _____ the demand for pork.

Accepted Answer

A decrease in the price of corn, which is an input for beef production, will lower the costs of producing beef, leading to an increase in the supply of beef. As beef and pork are substitutes, an increase in the supply (and likely a decrease in the price) of beef will decrease the demand for pork, as consumers switch to the now cheaper beef.

Question 4

A decrease in the price of a good will generally result in a(n):

Accepted Answer

A decrease in price will lead to a movement down along the demand curve, resulting in a higher quantity demanded. This is known as the law of demand. It does not necessarily increase demand or supply, though it might lead to an increase in the quantity supplied as producers may want to sell more at the lower price.

Question 5

Use the following to answer question: 
-(Figure: Demand for Online Movie Rentals)Use Figure: Demand for Online Movie Rentals.A decrease in the price of Google Chromecast adapters (a complement good)would result in a change illustrated by the move from:

Accepted Answer

A decrease in the price of a complement good (Google Chromecast adapter) would lead to an increase in demand for online movie rentals. This is illustrated by a rightward shift in the demand curve in Panel B from h to i.

Question 6

An increase in demand for good X can be caused by a decrease in the price of X.

Accepted Answer

An increase in demand means that more of good X is desired at every price level, which is typically caused by factors other than the price of the good itself, such as changes in consumer preferences, income, or prices of related goods. A decrease in the price of X would lead to an increase in the quantity demanded, not an increase in demand.

Question 7

An increase in income will always shift the demand curve to the right.

Accepted Answer

An increase in income generally shifts the demand curve to the right for normal goods, but for inferior goods, the demand curve shifts to the left because people buy less of these as their income increases.

Question 8

The market for soybeans is initially in equilibrium,with an upward-sloping supply curve and a downward-sloping demand curve.Because of mad cow disease,producers decide to replace bone meal with soybeans in cattle feed.The likely effect is that the:

Accepted Answer

The shift in demand for soybeans from the cattle industry will cause the demand curve for soybeans to shift to the right, leading to an increase in both the equilibrium price and quantity of soybeans.

Question 9

A competitive market occurs when there are many buyers and sellers of the same good.

Accepted Answer

A competitive market is characterized by the presence of many buyers and sellers of the same good. This creates equal opportunities for all participants to buy and sell the product, and no single seller or buyer can influence the price or quantity of the good in the market.

Question 10

If the price of corn rises,we generally expect the:

Accepted Answer

When the price of corn rises, producers are typically incentivized to supply more corn to the market because they can earn more revenue from their sales, leading to an increase in the quantity of corn supplied.

Question 11

Which factor would result in a movement along the demand curve?

Accepted Answer

A movement along the demand curve is caused by a change in the price of the good itself, which can be influenced by an increase in the number of suppliers, affecting the market price.

Question 12

The terms decrease in demand and decrease in quantity demanded can be used interchangeably.

Accepted Answer

Decrease in demand refers to a shift in the demand curve due to factors such as changes in consumer preferences, income, or prices of related goods. On the other hand, decrease in quantity demanded refers to a movement along the demand curve due to a change in the price of the good itself. Therefore, the two terms cannot be used interchangeably.

Question 13

Use the following to answer question: 
-(Table: The Demand for Chocolate-Covered Peanuts)Use Table: The Demand for Chocolate-Covered Peanuts.If George,Barbara,and Dan are the only three buyers in the market and the price of a bag of chocolate-covered peanuts is $0.50,the total market quantity demanded is _____ bags per month.

Accepted Answer

The total market quantity demanded is the sum of the quantities demanded by George, Barbara, and Dan at the price of $0.50. If each demands 70 bags at this price, the total is 70 + 70 + 70 = 210 bags per month.

Question 14

When milk consumption decreased,a survey firm wanted to know what was going on,so they interviewed people and found that people thought that rising milk prices were making it hard to justify their milk purchases.This suggests that what is going on is a:

Accepted Answer

A movement along the demand curve for milk is indicated because the change in quantity demanded is due to a change in the price of milk itself, not due to changes in external factors that would shift the entire demand curve.

Question 15

Use the following to answer question: 
-(Figure: Demand for Online Movie Rentals)Use Figure: Demand for Online Movie Rentals.A decrease in the price of movie tickets (a substitute)would result in a change illustrated by the move from:

Accepted Answer

A decrease in the price of movie tickets, a substitute for online movie rentals, would decrease the demand for online rentals, shifting the demand curve leftward from f to g in Panel A.

Question 16

An increase in _____ will have an ambiguous (uncertain)effect on price.

Accepted Answer

An increase in income can have an ambiguous effect on price because it depends on whether the good is a normal good or an inferior good. For normal goods, an increase in income leads to an increase in demand, potentially raising prices. For inferior goods, an increase in income leads to a decrease in demand, potentially lowering prices.

Question 17

A decrease in the price of eggs will result in a(n):

Accepted Answer

A decrease in the price of eggs will result in a movement along the demand curve, as the lower price will encourage consumers to buy more eggs, leading to an increase in quantity demanded. It will not lead to a shift in the supply curve, as the price decrease does not affect the willingness or ability of suppliers to produce and sell eggs.

Question 18

If coffee and tea are viewed as substitutes in consumption,then an increase in the price of coffee will increase the demand for tea.

Accepted Answer

If the price of coffee increases, some consumers may switch to drinking tea as a cheaper alternative, therefore increasing the demand for tea. This assumes that coffee and tea are perceived as substitutes in consumption by consumers.

Question 19

The demand curve for season tickets for the Miami Dolphins is the graphical representation of the number of season tickets consumers want to buy at any given price.

Accepted Answer

This is correct. The demand curve shows the relationship between the price of a good and the quantity of that good that consumers are willing and able to buy.

Question 20

According to the law of demand,if the price of steak increases in Rhode Island,the demand for steak will decrease in Rhode Island.

Accepted Answer

The answer of According to the law of demand,if the...

Quiz 3: Supply and Demand

The supply curve for apartments in Oregon reflects how many apartments landlords are willing and able to offer for rent at various prices.

After graduation many students' demand for used cars decreases.This may be because used cars are considered a normal good to college graduates.

Assume that corn is an input in the production of beef but not in the production of pork.Further,beef and pork are substitutes in consumption.A decrease in the price of corn will _ the supply of beef and _ the demand for pork.

A decrease in the price of a good will generally result in a(n) :

Use the following to answer question: -(Figure: Demand for Online Movie Rentals) Use Figure: Demand for Online Movie Rentals.A decrease in the price of Google Chromecast adapters (a complement good) would result in a change illustrated by the move from: