Question 1

The number of firms producing computer memory chips decreases. As a result, the price of a memory chip and the quantity of memory chips .

Accepted Answer

The answer of The number of firms producing computer memory...

Question 2

-Using the above figure, suppose there is a decrease in the number of suppliers. Then

Accepted Answer

A decrease in the number of suppliers typically leads to a decrease in supply, which results in a higher equilibrium price and a lower equilibrium quantity.

Question 3

You observe that in the market for coffee that both the equilibrium price of coffee and the equilibrium quantity have increased. You predict that the demand for coffee

Accepted Answer

The increase in equilibrium price and quantity suggests that there has been a shift in demand and/or supply to the right. Since the question specifically asks about the demand for coffee, and not the supply, we can eliminate choices A and C. Choice D suggests that the increase in demand is not as large as the increase in supply, but this is not supported by the information given. Therefore, the best choice is B, which predicts that demand for coffee has increased with no change in the supply of coffee.

Question 4

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

Accepted Answer

An unusually warm winter decreases the demand for gloves, leading to a lower equilibrium price and quantity.

Question 5

You notice that the price and quantity of wheat both decrease. This observation can be the result of the

Accepted Answer

A leftward shift in the demand curve for wheat indicates a decrease in demand, leading to both a lower price and a lower quantity of wheat in the market.

Question 6

Producers of Walkmans will be able to lower the wage rate that they pay to their workers. Walkman Watch asks you to predict the effects on the supply of Walkmans, and the price of a Walkman. You predict that the supply curve shifts

Accepted Answer

If producers are able to lower the wage rate they pay to workers, their cost of production decreases, allowing them to produce and supply more Walkmans at any given price. This will shift the supply curve rightward. As a result, the equilibrium price of Walkmans will fall as the quantity supplied increases.

Question 7

Pizza and hamburgers are substitutes for consumers. A fall in the price of a pizza the price of a hamburger and the quantity of hamburgers.

Accepted Answer

When the price of pizza falls, consumers are likely to buy more pizza and less of its substitute, hamburgers, leading to a decrease in both the price and quantity of hamburgers.

Question 8

-Using the above figure, suppose that roses are a normal good. If incomes decrease while simultaneously there is an increase in the price of the resources used to produce roses, then

Accepted Answer

The answer of 
-Using the above figure, suppose that roses...

Question 9

The quantity of cars that people plan to buy this month depends on all of the following EXCEPT the
)

Accepted Answer

The wages car dealers pay their sales people may have some impact on the prices of cars, but it is not a direct factor that affects the quantity of cars that people plan to buy. Therefore, C is the correct answer. A, B, and D can all impact a consumer's decision on purchasing a car.

Question 10

-The figure illustrates the market for chairs. If the supply of chairs increases, the price of a chair
$40 and the quantity .

Accepted Answer

When the supply of chairs increases, the price will fall below the initial equilibrium price, leading to an increase in the quantity demanded due to the law of demand.

Question 11

The price of a tomato increases and people buy more lettuce. You infer that lettuce and tomatoes are .

Accepted Answer

When the price of tomatoes increases, people are likely to switch to buying lettuce instead, indicating that they can be considered substitutes.

Question 12

Walkmans play CDs. Producers of Walkmans expect that a new technology for producing MP3 players will be available next year. Walkman Watch asks you to predict the effect of the new technology on the market for Walkmans. You predict that

Accepted Answer

The new technology is expected to produce MP3 players which are a substitute for Walkmans. This will lead to a decrease in the demand for Walkmans as consumers will switch to the new technology. This will shift the demand curve for Walkmans to the left, resulting in a decrease in the price of a Walkman.

Question 13

Kelly graduates and her income increases by $25,000 a year. Other things remaining the same, she increases the quantity of clothes she buys. For Kelly, clothes are .

Accepted Answer

Since Kelly's income has increased and she increases the quantity of clothes she buys, clothes are a normal good for her.

Question 14

In the market for books, the supply of books will decrease if any of the following occur EXCEPT

Accepted Answer

The answer of In the market for books, the supply...

Question 15

Jelly beans and popcorn are substitutes. A fall in the price of a bag of jelly beans will the demand for popcorn and the price of popcorn will .

Accepted Answer

Jelly beans and popcorn are substitutes, which means that they can be used interchangeably to satisfy a consumer's wants. When the price of a substitute (jelly beans) decreases, consumers tend to switch to that product, so the demand for popcorn, another substitute, will decrease. This decrease in demand will lead to a fall in the price of popcorn. Therefore, the correct answer is B) decrease; fall.

Question 16

A typewriter is an inferior good. As people's incomes increase and other things remain the same, you predict that the

Accepted Answer

As people's incomes increase, the demand for inferior goods like typewriters decreases, leading to a fall in their price.

Question 17

Students can rent a Blu- ray movie at Campus Video for $4. As the price of Blu- ray players fall, the

Accepted Answer

The answer of Students can rent a Blu- ray movie...

Question 18

A technological improvement lowers the cost of producing coffee. At the same time, consumers' preferences for coffee increase. The equilibrium price of coffee will

Accepted Answer

The equilibrium price will depend on the relative magnitude of the shifts in the demand and supply curves. An increase in consumer preference shifts the demand curve to the right, potentially raising the price, while a technological improvement shifts the supply curve to the right, potentially lowering the price. The net effect on price depends on which shift is larger.

Question 19

-In the above figure, in order for the equilibrium price to remain constant while the equilibrium quantity increases, the

Accepted Answer

For the equilibrium price to remain constant while the equilibrium quantity increases, both the supply and demand curves must shift rightward, indicating an increase in both supply and demand.

Question 20

If the demand for hamburgers decreases, the equilibrium price

Accepted Answer

If the demand for hamburgers decreases, there will be a surplus of hamburgers at the current price. To clear the surplus, suppliers will have to lower the price to encourage more consumers to buy. This will lead to a decrease in the equilibrium price and quantity demanded.

Quiz 3: Demand and Supply