Question 1

What assumption does the supply schedule make?
A) Factors other than price remain the same.
B) All factors except price must change.
C) Factors other than supply remain the same.
D) All factors except supply must change.

Accepted Answer

The supply schedule assumes that all factors other than price remain the same. This means that the quantity supplied is dependent only on the price, and not on other factors such as production costs, technology, or government regulations.

Question 2

The supply curve represents the relationship between _____, all else held constant.
A) price and quantity supplied
B) income and quantity supplied
C) consumer preferences and quantity
D) income and price supplied

Accepted Answer

The supply curve shows the quantity of a good that producers are willing and able to sell at different prices, holding all other factors constant. Therefore, the correct answer is A, price and quantity supplied.

Question 3

What is a supply curve?
A) A graphical representation that visually displays the supply schedule.
B) A graph depicting various price-quantity combinations of multiple goods.
C) A graph that shows the quantities of a particular good or service that producers will sell at one price.
D) A table that displays various price-quantity combinations of a good or service.

Accepted Answer

The supply curve is a graphical representation that shows the relationship between the price of a good or service and the quantity of that good or service that producers are willing to supply, effectively displaying the supply schedule in visual form.

Question 4

Suppose the graph shown depicts the demand for a normal good. A shift from A to B might be caused by:
A) a decrease in the price of a substitute.
B) a decrease in the price of a complement.
C) an increase in the price of a complement.
D) an increase in the good's price.

Accepted Answer

The answer of  Suppose the graph shown depicts the...

Question 5

Wendell just read an article claiming scientists have proven that processed cheese food increases brain power. We would expect Wendell's demand for processed cheese food to _____ and his demand curve to shift to the _____.
A) increase; right
B) increase; left
C) decrease; right
D) decrease; left

Accepted Answer

Wendell's demand for processed cheese food would increase because he believes that it increases brain power. This would shift his demand curve to the right, indicating he is willing to purchase more at any given price.

Question 6

Supply describes how much of something producers:
A) are willing and able to buy under certain circumstances.
B) want to sell under certain circumstances, although they may not be able to.
C) are willing and able to offer for sale at various prices under given circumstances.
D) are able to sell under certain circumstances, although they may not be willing to.

Accepted Answer

Supply refers to the amount of a product that producers are willing and able to offer for sale at various prices under given circumstances.

Question 7

Ren loves to go to the movies, and he just learned that he can buy a ticket at a discounted price using his student ID. Ren now sees movies at the theater even more frequently. The change in Ren's behavior would be shown graphically by a:
A) rightward shift in his demand curve.
B) leftward shift in his demand curve.
C) movement down along his demand curve.
D) movement up along his demand curve.

Accepted Answer

The answer of Ren loves to go to the movies,...

Question 8

Juan goes to his favorite store to buy a shirt, and while he's shopping he spots a sign indicating that all shirts will be on sale starting tomorrow. We would expect Juan's current demand for sweaters to:
A) increase.
B) shift to the left.
C) move down along his demand curve.
D) shift to the right.

Accepted Answer

If Juan sees a sign indicating that all shirts will be on sale, he may decide to delay his purchase to take advantage of the lower price. This would result in a shift to the left of his demand curve for shirts, indicating a decrease in his current demand.

Question 9

Assume the graph shown represents the market for button-up shirts and was originally in equilibrium where demand (D) and supply (S) intersect. What type of shock might cause the demand curve to shift to D₂? A) An increase in the price of buttons B) An increase in the price of ties C) An increase in the price of sweatshirts D) An increase in consumers' incomes

Accepted Answer

An increase in consumers' incomes would shift the demand curve to the right, resulting in a new equilibrium with a higher price and quantity. This could be due to an increase in overall economic growth, a decrease in unemployment rates, or a positive change in consumer confidence.

Question 10

For almost all goods, the _____ the price goes, the _____.
A) lower; higher the quantity supplied
B) higher; more luxurious the good becomes
C) lower; more luxurious the good becomes
D) higher; higher the quantity supplied

Accepted Answer

According to the law of supply, as the price of a good increases, the quantity supplied by producers also increases. Therefore, when the price of a good goes up, the quantity supplied also goes up. This relationship is represented by a positively sloped supply curve.

Question 11

A table that shows the quantities of a particular good or service that producers are willing to sell (supply) at various prices is known as a supply:
A) schedule.
B) figure.
C) curve.
D) graph.

Accepted Answer

A supply schedule is a table that shows the quantities of a particular good or service that producers are willing to sell (supply) at various prices. A figure and a graph are both visual representations of data and do not necessarily refer specifically to a supply schedule. A curve typically refers to the actual supply curve (which can be derived from a supply schedule) and is not the same thing as the supply schedule itself.

Question 12

How should you plot a supply curve on a coordinate system diagram?
A) Quantity goes on the horizontal axis and price goes on the vertical axis.
B) Quantity goes on the vertical axis and price goes on the horizontal axis.
C) Both quantity and price go on the horizontal axis.
D) It doesn't matter which axis price and quantity are placed on.

Accepted Answer

In a supply curve, the quantity supplied is typically plotted on the horizontal axis, and the price is plotted on the vertical axis. This convention allows for easy comparison with demand curves, where the same axes are used.

Question 13

The law of supply states that, all else held equal, quantity supplied rises as:
A) price falls.
B) price rises.
C) income rises.
D) income falls.

Accepted Answer

The law of supply states that quantity supplied will increase as price increases. This means that suppliers are willing to produce and sell more of a good or service as the price it can be sold at increases. As price decreases, suppliers will be less willing to produce and sell their goods, leading to a decrease in quantity supplied.

Question 14

Suppose the graph shown depicts the demand for a normal good. A shift from B to A might be caused by:
A) a decrease in the good's price.
B) an increase in the good's price.
C) a decrease in the price of a substitute.
D) an increase in the price of a substitute.

Accepted Answer

A shift from B to A indicates an increase in demand, which could be caused by a decrease in the price of a substitute. When the price of a substitute decreases, consumers will likely switch to the cheaper alternative, creating an increase in demand for the original good.

Question 15

Assume the market in the graph shown was originally at equilibrium where demand (D) and supply (S) intersect. However, something causes the demand to shift to D₂. What could have caused such a shift? A) The good became more popular with consumers. B) Consumers expected the price of the good to drop in the near future. C) The good became cheaper to produce. D) Substitutes for this good became less expensive.

Accepted Answer

The shift in demand to the right (D₂) indicates that demand has increased. This could be due to the good becoming more popular with consumers, which would lead to a higher quantity demanded at each price level, shifting the demand curve to the right.

Question 16

The law of supply is described as the:
A) inverse relationship between price and quantity supplied.
B) direct relationship between price and quantity supplied.
C) inverse relationship between income and quantity supplied.
D) direct relationship between income and quantity supplied.

Accepted Answer

The law of supply states that there is a direct relationship between price and quantity supplied, meaning that as the price of a good rises, the quantity supplied of that good will also increase, ceteris paribus. As the price falls, the quantity supplied will decrease. This law applies to all goods and services, assuming all other factors remain constant.

Question 17

The supply curve is a(n) _____ line that reflects the _____ relationship between price and quantity supplied.
A) downward-sloping; inverse
B) upward-sloping; inverse
C) downward-sloping; direct
D) upward-sloping; direct

Accepted Answer

The supply curve is typically represented as an upward-sloping line, indicating a direct (or positive) relationship between price and quantity supplied. As prices increase, producers are willing to supply more of the good.

Question 18

Suppose the graph shown depicts the demand for a normal good. Pasua was originally consuming at point A, but after receiving a raise at work her demand may:
A) be unaffected.
B) increase to point B.
C) increase to point C.
D) drop to zero.

Accepted Answer

The answer of  Suppose the graph shown depicts the...

Question 19

Which of the following statements about the supply curve is not true?
A) A supply curve represents a producer's willingness and ability to sell.
B) A supply curve shows the minimum price a producer will accept for any given quantity.
C) A supply curve visually displays the supply schedule.
D) A supply curve illustrates how many consumers want to purchase goods and services.

Accepted Answer

Option D is not true because a supply curve represents the quantity of goods or services that producers are willing and able to sell at different prices, not how many consumers want to purchase them. It is the demand curve that shows how many consumers want to buy at different prices.

Question 20

The amount of a particular good that sellers in a market will sell at a given price during a specified period is called:
A) quantity demanded.
B) quantity supplied.
C) demand.
D) supply.

Accepted Answer

Quantity supplied refers to the amount of a particular good that sellers in a market will sell at a given price during a specified period. Quantity demanded refers to the amount of a good that buyers are willing and able to purchase at a given price. Demand refers to the relationship between price and quantity demanded in a market, while supply refers to the relationship between price and quantity supplied in a market.

Quiz 3: Markets

What assumption does the supply schedule make?

The supply curve represents the relationship between _____, all else held constant.

What is a supply curve?

Suppose the graph shown depicts the demand for a normal good. A shift from A to B might be caused by:

Wendell just read an article claiming scientists have proven that processed cheese food increases brain power. We would expect Wendell's demand for processed cheese food to _ and his demand curve to shift to the _.

Supply describes how much of something producers:

Ren loves to go to the movies, and he just learned that he can buy a ticket at a discounted price using his student ID. Ren now sees movies at the theater even more frequently. The change in Ren's behavior would be shown graphically by a:

Juan goes to his favorite store to buy a shirt, and while he's shopping he spots a sign indicating that all shirts will be on sale starting tomorrow. We would expect Juan's current demand for sweaters to:

Assume the graph shown represents the market for button-up shirts and was originally in equilibrium where demand (D) and supply (S) intersect. What type of shock might cause the demand curve to shift to D₂?

For almost all goods, the _ the price goes, the _.

A table that shows the quantities of a particular good or service that producers are willing to sell (supply) at various prices is known as a supply:

How should you plot a supply curve on a coordinate system diagram?

The law of supply states that, all else held equal, quantity supplied rises as:

Suppose the graph shown depicts the demand for a normal good. A shift from B to A might be caused by:

Assume the market in the graph shown was originally at equilibrium where demand (D) and supply (S) intersect. However, something causes the demand to shift to D₂. What could have caused such a shift?

The law of supply is described as the:

The supply curve is a(n) _ line that reflects the _ relationship between price and quantity supplied.

Suppose the graph shown depicts the demand for a normal good. Pasua was originally consuming at point A, but after receiving a raise at work her demand may:

Which of the following statements about the supply curve is not true?

The amount of a particular good that sellers in a market will sell at a given price during a specified period is called: