Question 1

Given a positively sloped supply curve, when market demand increases

Accepted Answer

With a positively sloped supply curve, an increase in market demand will result in a higher equilibrium price and a larger quantity. This is because the suppliers are willing to supply more quantity at a higher price. As a result, the market price will increase to balance the supply and demand, and the quantity traded will also increase.

Question 2

Which statement best describes the "law of demand"? Other things being equal, the quantity of tennis rackets demanded will be greater if the

Accepted Answer

The law of demand states that as the price of a good or service decreases, the quantity demanded of that good or service will increase, ceteris paribus (i.e. holding all other factors constant). Therefore, if the price of tennis rackets is lower, the quantity demanded of tennis rackets will be greater, all else equal.

Question 3

Suppose that the demand and supply curves in the market for carrots have the following functional forms: Q_D= 250 - 4p and Q_S= 10 + p. The equilibrium quantity and price would then be

Accepted Answer

The answer of Suppose that the demand and supply curves...

Question 4

If tastes change so that a particular style of boots is now considered more appealing, the likely result is

Accepted Answer

If tastes change and a particular style of boots is now considered more appealing, then there will be an increase in demand for that style of boots. This will cause a shift in the demand curve to the right, indicating that consumers are willing to buy more of those boots at every given price point.

Question 5

Quantity demanded is a flow variable, which means that it must be expressed

Accepted Answer

Quantity demanded is a flow variable that represents the amount of a good or service that consumers are willing and able to purchase during a specific period of time, such as per day, week, month, or year. Therefore, it must be expressed as a number of units per period of time. Options A, B, and D specify a specific period of time, but they are not the only possible time frames for measuring quantity demanded. Option E refers to a specific moment in time, which is a stock variable, not a flow variable.

Question 6

An inferior good is one

Accepted Answer

An inferior good is a type of good for which demand decreases as household income increases. This happens because as people's incomes rise, they become able to afford better quality alternatives to the inferior good. Examples of inferior goods include generic brands, fast food, and public transportation.

Question 7

Consider a negatively sloped demand curve for natural gas. If the supply of natural gas increases, the new equilibrium will have

Accepted Answer

A negatively sloped demand curve indicates that as the supply of natural gas increases, the price will decrease and the quantity demanded will increase. Therefore, the new equilibrium will have a lower price and a greater quantity. Choice D matches this description.

Question 8

Suppose that a better way to produce a good is discovered, thus lowering production costs for the good. This will cause

Accepted Answer

Lower production costs will encourage producers to produce more of the good at each price level, resulting in an increase in the quantity supplied at every price level. This will cause a rightward shift of the supply curve, indicating an increase in supply.

Question 9

If there is no change in the money price of steel during a period of 6 percent inflation, then the

Accepted Answer

The answer of If there is no change in the...

Question 10

Tickets for music concerts that are sold on the Internet are often sold out within minutes and many unsatisfied customers are unable to get tickets. One explanation for this is that

Accepted Answer

When the market price is set below the equilibrium price, demand exceeds supply, leading to tickets selling out quickly.

Question 11

Which of the following events would a change in the quantity demanded for some commodity but NOT a change in the demand for that commodity?

Accepted Answer

A change in the price of the commodity results in a movement along the demand curve, causing a change in the quantity demanded but not a shift in the overall demand for the commodity. The other options (B, C, D, E) are factors that can cause a shift in the demand curve and therefore a change in the overall demand for the commodity.

Question 12

In which statement is the term "supply" used correctly? (1)An increase in the price of leather will cause a decrease in the supply of leather. (2)An increase in the price of leather will cause a decrease in the supply of leather boots.

Accepted Answer

The answer of In which statement is the term "supply"...

Question 13

If a demand curve and a supply curve can be stated functionally as Q_d= 500 - 0.1P and Q_s= 440 + 0.4P, respectively, then the equilibrium quantity and price (Q, P)would be

Accepted Answer

The answer of If a demand curve and a supply...

Question 14

Quantity demanded is the

Accepted Answer

Quantity demanded refers to the specific amount of a good that consumers are willing and able to purchase at a particular price point during a specific period of time. It is not the total amount people wish to buy (as this may be limited by factors such as income or availability) and it is not the total amount actually purchased (as this may be influenced by factors such as supply or consumer behavior).

Question 15

An equilibrium price can be described as

Accepted Answer

An equilibrium price is the price at which the quantity demanded by consumers equals the quantity supplied by producers, resulting in no excess demand or supply.

Question 16

The relative price of a good

Accepted Answer

The relative price of a good reflects its price in terms of units of other goods. It is the ratio of the price of one good to the price of another good. For example, if the price of a gallon of milk is $4 and the price of a loaf of bread is $2, then the relative price of milk is 2 loaves of bread per gallon of milk.

Question 17

To say that the supply curve is positively sloped means that

Accepted Answer

A positively sloped supply curve indicates that as the price of a good or service increases, the quantity supplied by producers also increases, reflecting the direct relationship between price and quantity supplied.

Question 18

A change in demand is said to take place when there is a

Accepted Answer

A change in demand is represented by a shift of the demand curve, meaning that at each price, consumers are now willing and able to buy a different quantity of the good. This occurs due to changes in consumer preferences, income, population, or other factors that affect the entire market. A movement along the demand curve would only occur due to a change in the price of the good itself. A change in supply would not affect demand, but rather the equilibrium price and quantity.

Question 19

In a market for a good or service, the quantities demanded and supplied are

Accepted Answer

Quantities demanded and supplied are both flow variables because they are measured over a period of time, such as per day, per month, or per year.

Question 20

A rightward shift in the supply curve indicates

Accepted Answer

A rightward shift in the supply curve indicates an increase in the quantity supplied at each price. This means that producers are willing and able to provide more of a good or service at any given price.

Quiz 3: Demand, Supply, and Price

Given a positively sloped supply curve, when market demand increases

Which statement best describes the "law of demand"? Other things being equal, the quantity of tennis rackets demanded will be greater if the

Suppose that the demand and supply curves in the market for carrots have the following functional forms: Q_D= 250 - 4p and Q_S= 10 + p. The equilibrium quantity and price would then be

If tastes change so that a particular style of boots is now considered more appealing, the likely result is

Quantity demanded is a flow variable, which means that it must be expressed

An inferior good is one

Consider a negatively sloped demand curve for natural gas. If the supply of natural gas increases, the new equilibrium will have

Suppose that a better way to produce a good is discovered, thus lowering production costs for the good. This will cause

If there is no change in the money price of steel during a period of 6 percent inflation, then the

Tickets for music concerts that are sold on the Internet are often sold out within minutes and many unsatisfied customers are unable to get tickets. One explanation for this is that

Which of the following events would a change in the quantity demanded for some commodity but NOT a change in the demand for that commodity?

In which statement is the term "supply" used correctly? (1) An increase in the price of leather will cause a decrease in the supply of leather. (2) An increase in the price of leather will cause a decrease in the supply of leather boots.

If a demand curve and a supply curve can be stated functionally as Q_d= 500 - 0.1P and Q_s= 440 + 0.4P, respectively, then the equilibrium quantity and price (Q, P) would be

Quantity demanded is the

An equilibrium price can be described as

The relative price of a good

To say that the supply curve is positively sloped means that

A change in demand is said to take place when there is a

In a market for a good or service, the quantities demanded and supplied are

A rightward shift in the supply curve indicates

Quiz 3: Demand, Supply, and Price

Given a positively sloped supply curve, when market demand increases

Which statement best describes the "law of demand"? Other things being equal, the quantity of tennis rackets demanded will be greater if the

Suppose that the demand and supply curves in the market for carrots have the following functional forms: QD = 250 - 4p and QS = 10 + p. The equilibrium quantity and price would then be

If tastes change so that a particular style of boots is now considered more appealing, the likely result is

Quantity demanded is a flow variable, which means that it must be expressed

An inferior good is one

Consider a negatively sloped demand curve for natural gas. If the supply of natural gas increases, the new equilibrium will have

Suppose that a better way to produce a good is discovered, thus lowering production costs for the good. This will cause

If there is no change in the money price of steel during a period of 6 percent inflation, then the

Tickets for music concerts that are sold on the Internet are often sold out within minutes and many unsatisfied customers are unable to get tickets. One explanation for this is that

Which of the following events would a change in the quantity demanded for some commodity but NOT a change in the demand for that commodity?

In which statement is the term "supply" used correctly? (1) An increase in the price of leather will cause a decrease in the supply of leather. (2) An increase in the price of leather will cause a decrease in the supply of leather boots.

If a demand curve and a supply curve can be stated functionally as Qd = 500 - 0.1P and Qs = 440 + 0.4P, respectively, then the equilibrium quantity and price (Q, P) would be

Quantity demanded is the

An equilibrium price can be described as

The relative price of a good

To say that the supply curve is positively sloped means that

A change in demand is said to take place when there is a

In a market for a good or service, the quantities demanded and supplied are

A rightward shift in the supply curve indicates

Suppose that the demand and supply curves in the market for carrots have the following functional forms: Q_D= 250 - 4p and Q_S= 10 + p. The equilibrium quantity and price would then be

If a demand curve and a supply curve can be stated functionally as Q_d= 500 - 0.1P and Q_s= 440 + 0.4P, respectively, then the equilibrium quantity and price (Q, P) would be