Question 1

What are substitutes in production?

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Question 2

At prices above the equilibrium price, what occurs?

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Question 3

Why does an increase in the supply of computers lead to a lower price for a computer?

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Question 4

In the market for bicycles, explain what happens to the supply and demand curves when there is an increase in the price of steel used to make bikes.

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Question 5

List the factors that change supply and shift the supply curve. Tell what happens to supply and the supply curve when there is an increase in the factor.

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Question 6

Suppose that the technology used to produce computers advances. How does this change affect the supply of computers and the supply curve of computers?

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Question 7

Personal computers are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of computers.

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Question 8

When does a shortage occur?

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Question 9

What is the effect on the price and quantity of a product if the demand decreases and the supply simultaneously increases?

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Question 10

"If the price of crude oil falls, the demand for gasoline will increase, so people will by more gas and the price of gas will go up." Is this statement true or false? Explain.

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Question 11

In early 2009 the price of computer memory chips rose. In a demand and supply model, shifts in what curve(s) could have brought about the higher price?

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Question 12

Computers are a complement to computer software. Suppose the price of a computer falls. Simultaneously, suppose that the number of companies selling computer software decreases. How do these changes affect the price and quantity of computer software?

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Question 13

What leads to a decrease in the quantity supplied of a good or service?

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Question 14

If the equilibrium relative price for a two-liter bottle of Coca-Cola is $1.50 today, just like it was ten years ago, can we safely say that all supply and demand conditions in the market for Coke have remained very stable all these years?

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Question 15

Explain how price can be a regulator, that is, how it can coordinate the plans of buyers and sellers.

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Question 16

When does a surplus occur?

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Question 17

Suppose that the number of companies selling computer software decreases. How does this change affect the supply of computer software and the supply curve of computer software?

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Question 18

What is the difference between quantity supplied and supply?

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Question 19

When the demand for blue jeans increases, what happens next?

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Question 20

What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?

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