Question 1

Shifts in the supply of and the demand for oil were the causes of the increased gasoline prices in the 2000s.

Accepted Answer

The supply of oil was affected by geopolitical events such as wars and political instability in oil-producing countries, while the demand for oil increased due to strong economic growth in emerging markets like China and India. These factors led to a decrease in supply and an increase in demand, which caused gasoline prices to rise in the 2000s.

Question 2

Suppose demand and supply in a market can be expressed by these equations: Q_D = 40 -0.5P Q_S = 15 + 2P If the prevailing market price is $30, what are the quantity demanded and the quantity supplied?

Accepted Answer

The answer of Suppose demand and supply in a market...

Question 3

Suppose demand and supply in a market can be expressed by these equations: Q_D = 40- 0.5P Q_S = 15 + 2P Calculate the equilibrium price and quantity.

Accepted Answer

The answer of Suppose demand and supply in a market...

Question 4

Which of the following would be a likely cause for the increases in gasoline prices in the late-2000s?

Accepted Answer

Reductions in U.S. refinery capacity would limit the supply of gasoline, leading to an increase in gasoline prices. The other options do not directly relate to the supply and demand for gasoline.

Question 5

Why is the word equilibrium used to describe the price determined by supply and demand in a market?

Accepted Answer

The answer of Why is the word equilibrium used to...

Question 6

As a result of an increase in supply, ceteris paribus, the equilibrium price decreases and the equilibrium quantity increases.

Accepted Answer

According to the law of supply and demand, when the supply of a good or service increases while demand remains constant, the equilibrium price will decrease and the equilibrium quantity will increase. This is because there is a surplus of the good or service, which puts downward pressure on prices and encourages consumers to purchase more of the good or service. Therefore, the statement is true.

Question 7

It is impossible to use a supply and demand model to analyze the changes in gasoline prices during the mid-2000s.

Accepted Answer

The changes in gasoline prices during the mid-2000s can be analyzed using a supply and demand model. Factors such as changes in crude oil prices, geopolitical events, refinery capacity, and consumer demand can all be considered in the analysis.

Question 8

A government energy policy that focuses on new technologies for conservation and new sources of energy would result in

Accepted Answer

Focusing on new technologies for conservation and new sources of energy would likely lead to an increase in the supply of gasoline (as new sources could include more efficient ways to produce gasoline or alternatives that reduce reliance on it) and a decrease in the demand for gasoline (as conservation efforts and alternative energy sources reduce the need for gasoline).

Question 9

With a single supply and demand diagram, illustrate a shortage and a surplus. Carefully label the diagram.

Accepted Answer

The answer of With a single supply and demand diagram,...

Question 10

When supply shifts right and demand shifts left at the same time, the equilibrium market price drops.

Accepted Answer

When supply increases (shifts right), it means more of the good is available, which tends to lower the price. When demand decreases (shifts left), it means there is less desire for the good, which also tends to lower the price. Together, these shifts lead to a decrease in the equilibrium market price.

Question 11

Suppose supply and demand are represented by the following equations: Q_D = 25 - 0.4P Q_S = 7 + 0.2P If supply changes so that Q_S = 13 + 0.2P calculate the change in equilibrium price that results.

Accepted Answer

The answer of Suppose supply and demand are represented by...

Question 12

As a result of an increase in both supply and demand, the equilibrium price decreases while the equilibrium quantity increases.

Accepted Answer

When both supply and demand increase, the equilibrium quantity will increase, but the effect on equilibrium price is indeterminate without knowing the relative magnitudes of the shifts in supply and demand. If the increase in supply is larger than the increase in demand, the price could decrease, but if the increase in demand is larger, the price could increase.

Question 13

Draw a supply and demand diagram with supply and demand both increasing and market equilibrium price increasing as well.

Accepted Answer

The answer of Draw a supply and demand diagram with...

Question 14

Suppose more firms enter the computer market. What will happen to demand, quantity demanded, supply, and quantity supplied as a result of this market change?

Accepted Answer

The answer of Suppose more firms enter the computer market....

Question 15

Suppose consumer incomes increase, and we are looking at a market for a normal good. What will happen to demand, quantity demanded, supply, and quantity supplied as a result of this market change?

Accepted Answer

The answer of Suppose consumer incomes increase, and we are...

Question 16

Draw a supply and demand diagram. Label the equilibrium price and equilibrium quantity as well as the axes and curves.

Accepted Answer

The answer of Draw a supply and demand diagram. Label...

Question 17

Suppose demand and supply in a market can be expressed by these equations: Q_D = 40- 0.5P Q_S = 15 + 2P If the prevailing market price is $14, what are the quantity demanded and the quantity supplied?

Accepted Answer

The answer of Suppose demand and supply in a market...

Question 18

An increase in supply and demand at the same time will always result in a higher equilibrium market price.

Accepted Answer

An increase in both supply and demand can lead to various outcomes for the equilibrium price depending on the magnitude of the shifts. If the increase in supply is larger than the increase in demand, the equilibrium price could actually decrease. If the increase in demand is larger, the price could increase. If they increase by the same amount, the price might stay the same but the quantity sold will increase.

Question 19

Suppose a war in the Middle East destroys many oil fields. This will cause a(n)

Accepted Answer

If the war destroys many oil fields, there will be a decrease in the supply of oil, which will cause an increase in oil prices.

Question 20

The high price of gasoline in the late-2000s was likely the result of

Accepted Answer

The high price of gasoline in the late-2000s was a result of a decrease in the supply of gasoline due to limited production and increased global demand, along with an increase in the demand for gasoline in developing countries such as China and India. This combination of factors led to a significant increase in the price of gasoline.

Quiz 3: The Supply and Demand Model

Shifts in the supply of and the demand for oil were the causes of the increased gasoline prices in the 2000s.

Suppose demand and supply in a market can be expressed by these equations: QD = 40 -0.5P QS = 15 + 2P If the prevailing market price is $30, what are the quantity demanded and the quantity supplied?

Suppose demand and supply in a market can be expressed by these equations: QD = 40- 0.5P QS = 15 + 2P Calculate the equilibrium price and quantity.

Which of the following would be a likely cause for the increases in gasoline prices in the late-2000s?

Why is the word equilibrium used to describe the price determined by supply and demand in a market?

As a result of an increase in supply, ceteris paribus, the equilibrium price decreases and the equilibrium quantity increases.

It is impossible to use a supply and demand model to analyze the changes in gasoline prices during the mid-2000s.

A government energy policy that focuses on new technologies for conservation and new sources of energy would result in

With a single supply and demand diagram, illustrate a shortage and a surplus. Carefully label the diagram.

When supply shifts right and demand shifts left at the same time, the equilibrium market price drops.

Suppose supply and demand are represented by the following equations: QD = 25 - 0.4P QS = 7 + 0.2P If supply changes so that QS = 13 + 0.2P calculate the change in equilibrium price that results.

As a result of an increase in both supply and demand, the equilibrium price decreases while the equilibrium quantity increases.

Draw a supply and demand diagram with supply and demand both increasing and market equilibrium price increasing as well.

Suppose more firms enter the computer market. What will happen to demand, quantity demanded, supply, and quantity supplied as a result of this market change?

Suppose consumer incomes increase, and we are looking at a market for a normal good. What will happen to demand, quantity demanded, supply, and quantity supplied as a result of this market change?

Draw a supply and demand diagram. Label the equilibrium price and equilibrium quantity as well as the axes and curves.

Suppose demand and supply in a market can be expressed by these equations: QD = 40- 0.5P QS = 15 + 2P If the prevailing market price is $14, what are the quantity demanded and the quantity supplied?

An increase in supply and demand at the same time will always result in a higher equilibrium market price.

Suppose a war in the Middle East destroys many oil fields. This will cause a(n)

The high price of gasoline in the late-2000s was likely the result of

Suppose demand and supply in a market can be expressed by these equations: Q_D = 40 -0.5P Q_S = 15 + 2P If the prevailing market price is $30, what are the quantity demanded and the quantity supplied?

Suppose demand and supply in a market can be expressed by these equations: Q_D = 40- 0.5P Q_S = 15 + 2P Calculate the equilibrium price and quantity.

Suppose supply and demand are represented by the following equations: Q_D = 25 - 0.4P Q_S = 7 + 0.2P If supply changes so that Q_S = 13 + 0.2P calculate the change in equilibrium price that results.

Suppose demand and supply in a market can be expressed by these equations: Q_D = 40- 0.5P Q_S = 15 + 2P If the prevailing market price is $14, what are the quantity demanded and the quantity supplied?