Question 1

When supply shifts right and demand shifts left,

Accepted Answer

When supply shifts right and demand shifts left, the equilibrium price falls. This is because the increase in supply puts downward pressure on prices, while the decrease in demand reduces the amount that buyers are willing to pay. As a result, the equilibrium price decreases while the equilibrium quantity may increase or decrease depending on the extent of the shift in supply and demand.

Question 2

What would happen in the market for SUVs if the government started to subsidize the production of SUVs that get very few miles per gallon and the price of gasoline went up?

Accepted Answer

The answer of What would happen in the market for...

Question 3

Top Ramen is a brand of noodles that is widely considered to be an inferior good with a high salt content. What would happen to the equilibrium price and equilibrium quantity of Top Ramen if income went up and the price of salt decreased?

Accepted Answer

The answer of Top Ramen is a brand of noodles...

Question 4

Compare and contrast the differences between a competitive market and an imperfect market, and give an example of an imperfect market.

Accepted Answer

The answer of Compare and contrast the differences between a...

Question 5

A new car is typically considered to be a normal good. What would happen to the equilibrium price and quantity of new cars if there is a recession where many people lose their jobs?

Accepted Answer

During a recession, many people lose their jobs and have less disposable income. As a result, they are less likely to purchase a new car, and demand for new cars decreases. This shift in demand causes the equilibrium price and quantity of new cars to both fall as the market adjusts to the decrease in demand.

Question 6

Draw a graph showing the following:
a. a positive change in demand.
b. a negative or adverse) change in supply.
c. a positive change in quantity supplied.
d. a negative or adverse) change in quantity demanded.

Accepted Answer

The answer of Draw a graph showing the following:
a. a...

Question 7

Using a supply and demand graph, show what happens to the equilibrium price and quantity for the following goods if, holding all else constant, income increases.
a. a normal good
b. an inferior good

Accepted Answer

The answer of Using a supply and demand graph, show...

Question 8

In agriculture, a "bumper crop" refers to a particularly productive harvest. If there is a bumper crop for wheat at the same time that more people become allergic to wheat and all else is held constant, what will happen to the equilibrium price and quantity for wheat?

Accepted Answer

With a bumper crop for wheat, the supply of wheat will increase, which will cause an excess supply of wheat at the previous equilibrium price. As a result, the equilibrium price will decrease due to the excess supply. However, more people becoming allergic to wheat will decrease the demand for wheat, which will cause a decrease in the equilibrium quantity. Thus, the equilibrium price will go down and equilibrium quantity will be indeterminate.

Question 9

Assume that the market for cheeseburgers consists of only three individuals: Jerry, George, and Elaine. Here are their demand schedules:
$$\begin{array} { l l l l l l } 
\hline \text { Price } & \begin{array} { l } 
\text { Jerry's } \
\text { Demand }
\end{array} & \text { Price } & \begin{array} { l } 
\text { George's } \
\text { Demand }
\end{array} & \text { Price } & \begin{array} { l } 
\text { Elaine's } \
\text { Demand }
\end{array} \
\hline \$ 0 & 5 & \$ 0 & 8 & \$ 0 & 2 \
\$ 2 & 4 & \$ 2 & 7 & \$ 2 & 2 \
\$ 4 & 4 & \$ 4 & 7 & \$ 4 & 1 \
\$ 6 & 3 & \$ 6 & 6 & \$ 6 & 1 \
\$ 8 & 2 & \$ 8 & 5 & \$ 8 & 0 \
\$ 10 & 1 & \$ 10 & 4 & \$ 10 & 0 \
\hline
\end{array}$$
From the information in demand schedules, answer the following questions: 
a. If the price of a cheeseburger was $2, how many cheeseburgers would be sold?
b. If the price of a cheeseburger was $8, how many cheeseburgers would be sold?
c. Construct the market demand schedule for cheeseburgers.

Accepted Answer

The answer of Assume that the market for cheeseburgers consists...

Question 10

Assume that the price of rubber increased at the same time that Michael Jordan, arguably the best NBA basketball player of all time, became famous. What do you expect to happen to the equilibrium price and equilibrium quantity of the basketball shoes that are promoted by Michael Jordan?

Accepted Answer

The answer of Assume that the price of rubber increased...

Question 11

Using a supply and demand model, show what happens to the equilibrium price and equilibrium quantity in the market for cigarettes when the government imposes a tax on their production.

Accepted Answer

The answer of Using a supply and demand model, show...

Question 12

Compare and contrast the following sets of words:
a. normal good versus inferior good
b. substitute good versus complementary good
c. a supply curve versus a supply schedule
d. the law of demand versus the law of supply

Accepted Answer

The answer of Compare and contrast the following sets of...

Question 13

You are given the following demand schedule:
$$\begin{array} { l l } 
\hline \text { Price } & \begin{array} { l } 
\text { Quantity } \
\text { Demanded }
\end{array} \
\hline \$ 0 & 40 \
\$ 3 & 30 \
\$ 6 & 20 \
\$ 9 & 10 \
\$ 12 & 0 \
\hline
\end{array}$$
a. Graph the information from this demand schedule. Be sure to label everything.
b. Graph the following demand schedule:
$$\begin{array} { l l } 
\hline \text { Price } & \begin{array} { l } 
\text { Quantity } \
\text { Demanded }
\end{array} \
\hline \$ 3 & 50 \
\$ 6 & 40 \
\$ 9 & 30 \
\$ 12 & 20 \
\hline
\end{array}$$
c.
c. What happened to the demand curve?
d. List five things that could make the demand curve reflect your answer in part

Accepted Answer

The answer of You are given the following demand schedule:
\[\begin{array}...

Question 14

Using a supply and demand model, show what happens to the equilibrium price and equilibrium quantity in the market for bananas if, holding all else constant, a study comes out that says eating bananas causes cardiac problems.

Accepted Answer

The answer of Using a supply and demand model, show...

Question 15

Using a supply and demand model, show what happens to the equilibrium price and equilibrium quantity in the market for bagels if, holding all else constant, the price of cream cheese decreases.

Accepted Answer

The answer of Using a supply and demand model, show...

Question 16

During a national recession, we see the income in the economy decrease and the majority of stock prices decline stock prices reflect the value of a company and are directly related to its profits). A few stock prices actually increase during a recessionary time. Using the information regarding supply and demand, explain why some stock prices rise during a recession.

Accepted Answer

The answer of During a national recession, we see the...

Question 17

Shoes are considered to be a normal good. What would happen to the equilibrium price and equilibrium quantity of shoes if income increases and the cost of labor to produce shoes increases?

Accepted Answer

When income increases, demand for normal goods like shoes increases, pushing the equilibrium price and quantity up. However, if the cost of labor to produce shoes also increases, this raises production costs, leading to a decrease in supply, which pushes the price higher but makes the effect on quantity indeterminate. The price definitely goes up due to both demand and cost pressures, but the quantity's direction depends on the relative magnitudes of the shifts in demand and supply.

Question 18

Without using a graph, explain the difference between a movement along a demand curve and a shift in the entire demand curve.

Accepted Answer

The answer of Without using a graph, explain the difference...

Question 19

What happens to the equilibrium price and equilibrium quantity of a good if both the producers and the consumers of that good expect its price to be higher in the future?

Accepted Answer

The answer of What happens to the equilibrium price and...

Question 20

After the invention of the cotton gin in 1793, shirt production became more efficient. If everything else remained constant and this production efficiency was the only change that affected the supply and demand for shirts, what would we expect to happen to the equilibrium price and equilibrium quantity? Use a supply and demand graph to supplement your explanation.

Accepted Answer

The answer of After the invention of the cotton gin...

Quiz 3: The Market at Work: Supply and Demand Y

When supply shifts right and demand shifts left,

What would happen in the market for SUVs if the government started to subsidize the production of SUVs that get very few miles per gallon and the price of gasoline went up?

Top Ramen is a brand of noodles that is widely considered to be an inferior good with a high salt content. What would happen to the equilibrium price and equilibrium quantity of Top Ramen if income went up and the price of salt decreased?

Compare and contrast the differences between a competitive market and an imperfect market, and give an example of an imperfect market.

A new car is typically considered to be a normal good. What would happen to the equilibrium price and quantity of new cars if there is a recession where many people lose their jobs?

Draw a graph showing the following: a. a positive change in demand. b. a negative or adverse) change in supply. c. a positive change in quantity supplied. d. a negative or adverse) change in quantity demanded.

Using a supply and demand graph, show what happens to the equilibrium price and quantity for the following goods if, holding all else constant, income increases. a. a normal good b. an inferior good

In agriculture, a "bumper crop" refers to a particularly productive harvest. If there is a bumper crop for wheat at the same time that more people become allergic to wheat and all else is held constant, what will happen to the equilibrium price and quantity for wheat?

Assume that the price of rubber increased at the same time that Michael Jordan, arguably the best NBA basketball player of all time, became famous. What do you expect to happen to the equilibrium price and equilibrium quantity of the basketball shoes that are promoted by Michael Jordan?

Using a supply and demand model, show what happens to the equilibrium price and equilibrium quantity in the market for cigarettes when the government imposes a tax on their production.

Compare and contrast the following sets of words: a. normal good versus inferior good b. substitute good versus complementary good c. a supply curve versus a supply schedule d. the law of demand versus the law of supply

Using a supply and demand model, show what happens to the equilibrium price and equilibrium quantity in the market for bananas if, holding all else constant, a study comes out that says eating bananas causes cardiac problems.

Using a supply and demand model, show what happens to the equilibrium price and equilibrium quantity in the market for bagels if, holding all else constant, the price of cream cheese decreases.

Shoes are considered to be a normal good. What would happen to the equilibrium price and equilibrium quantity of shoes if income increases and the cost of labor to produce shoes increases?

Without using a graph, explain the difference between a movement along a demand curve and a shift in the entire demand curve.

What happens to the equilibrium price and equilibrium quantity of a good if both the producers and the consumers of that good expect its price to be higher in the future?