Question 1

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. What is the equilibrium price and the equilibrium quantity in this market?
Suppose the current price is $12.00. What is the quantity of Blu-rays sold? Explain. Is there a shortage or a surplus? How big is it? Explain.

Accepted Answer

The answer of 
-Suppose the market for Blu-rays has the...

Question 2

An increase in the incomes of baseball fans in New York leads to a rightward movement along the demand curve but does not shift the demand curve for Yankees tickets.

Accepted Answer

An increase in the incomes of baseball fans in New York would likely shift the demand curve for Yankees tickets to the right, not just cause a movement along the demand curve, because it affects the willingness and ability of consumers to buy at all prices, assuming Yankees tickets are a normal good.

Question 3

-The diagram above illustrates the market for apartments in Victoria, British Columbia.
a) If the current rent is $300 per month, is there a shortage or surplus in the apartment market and how much is the shortage or surplus?
b) What is the equilibrium rent and quantity of apartments?

Accepted Answer

The answer of 
-The diagram above illustrates the market for...

Question 4

The relative price of a good is greater than the money price of a good.

Accepted Answer

The relative price of a good refers to its price in terms of another good, essentially how much of one good you can exchange for another, while the money price is the price of a good in terms of currency. These are different concepts and cannot be directly compared as greater or lesser.

Question 5

A movement along the demand curve shows a change in demand.

Accepted Answer

A movement along the demand curve shows a change in quantity demanded, not a change in demand. A change in demand would shift the entire demand curve either to the right (increase in demand) or to the left (decrease in demand).

Question 6

For consumers, chocolate chip cookies and doughnuts are substitutes. So, an increase in the price of chocolate chip cookies will lead to a rightward shift in the demand curve for doughnuts.

Accepted Answer

If the price of chocolate chip cookies increases, some consumers may choose to switch to doughnuts as a substitute, leading to an increase in demand for doughnuts. This results in a rightward shift in the demand curve for doughnuts.

Question 7

-The above table gives the demand and supply schedules for cat food. If the price is $1.00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price? If there is a shortage, how much is the shortage? If there is a surplus, how much is the surplus? If $3.00 is the equilibrium price, what is the equilibrium quantity?

Accepted Answer

The answer of 
-The above table gives the demand and...

Question 8

-The above table gives the demand and supply schedules for cat food. If the supply increases by 20 tons at every price, what is the new equilibrium price and quantity?

Accepted Answer

The answer of 
-The above table gives the demand and...

Question 9

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a Blu-ray player increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of Blu-rays?

Accepted Answer

The answer of 
-Suppose the market for Blu-rays has the...

Question 10

-The above table gives the demand and supply schedules for cat food. If the price is $3.00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price? If there is a shortage, how much is the shortage? If there is a surplus, how much is the surplus? If $3.00 is the equilibrium price, what is the equilibrium quantity?

Accepted Answer

The answer of 
-The above table gives the demand and...

Question 11

Last year a very severe ice storm hit the north counties of New York state, and the states of Vermont and Maine. Electric poles were down and no one had power for days. It was reported that the price of kerosene heaters skyrocketed and the number purchased increased during this time. Using a supply and demand diagram, show the impact of the ice storm on the market for kerosene heaters.

Accepted Answer

The answer of Last year a very severe ice storm...

Question 12

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a technological advance increases the quantity of disks supplied at each price by 25 million. What is the new equilibrium price and the new equilibrium quantity of Blu-rays?

Accepted Answer

The answer of 
-Suppose the market for Blu-rays has the...

Question 13

-The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?

Accepted Answer

The answer of 
-The above table gives the demand and...

Question 14

-In the figure above, if the price is $8 a unit, is there a shortage or surplus and what is the amount of any shortage or surplus? What is the equilibrium price and quantity?

Accepted Answer

The answer of 
-In the figure above, if the price...

Question 15

Soft drinks and milk are substitutes for consumers. Draw a graph showing the effect of an increase in the price of milk on the demand for soft drinks.

Accepted Answer

The answer of Soft drinks and milk are substitutes for...

Question 16

A relative price is the product of two money prices.

Accepted Answer

A relative price is the ratio of two money prices, not the product.

Question 17

Soft drinks are a normal good. Draw a graph showing the effect of an increase in income on the demand for soft drinks.

Accepted Answer

The answer of Soft drinks are a normal good. Draw...

Question 18

Consumers can use either natural gas or heating oil to warm their houses. Suppose the price of natural gas increases. Use a demand and supply diagram to show the impact of the higher price of natural gas on the market for home heating oil.

Accepted Answer

The answer of Consumers can use either natural gas or...

Question 19

The price of a computer is $1,000 and the price of a car is $12,000. What is the relative price of a car? What is the relative price of a computer?

Accepted Answer

The answer of The price of a computer is $1,000...

Question 20

A demand curve is also a willingness-and-ability-to-pay curve.

Accepted Answer

A demand curve represents both the willingness and ability of consumers to pay for a good or service at varying prices. The higher the price, the less willing or able consumers are to purchase the good or service, resulting in a downward sloping demand curve.

Quiz 3: Demand and Supply

An increase in the incomes of baseball fans in New York leads to a rightward movement along the demand curve but does not shift the demand curve for Yankees tickets.

-The diagram above illustrates the market for apartments in Victoria, British Columbia. a) If the current rent is $300 per month, is there a shortage or surplus in the apartment market and how much is the shortage or surplus? b) What is the equilibrium rent and quantity of apartments?

The relative price of a good is greater than the money price of a good.

A movement along the demand curve shows a change in demand.

For consumers, chocolate chip cookies and doughnuts are substitutes. So, an increase in the price of chocolate chip cookies will lead to a rightward shift in the demand curve for doughnuts.

-The above table gives the demand and supply schedules for cat food. If the supply increases by 20 tons at every price, what is the new equilibrium price and quantity?

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a Blu-ray player increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of Blu-rays?

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a technological advance increases the quantity of disks supplied at each price by 25 million. What is the new equilibrium price and the new equilibrium quantity of Blu-rays?

-The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?

-In the figure above, if the price is $8 a unit, is there a shortage or surplus and what is the amount of any shortage or surplus? What is the equilibrium price and quantity?

Soft drinks and milk are substitutes for consumers. Draw a graph showing the effect of an increase in the price of milk on the demand for soft drinks.

A relative price is the product of two money prices.

Soft drinks are a normal good. Draw a graph showing the effect of an increase in income on the demand for soft drinks.

Consumers can use either natural gas or heating oil to warm their houses. Suppose the price of natural gas increases. Use a demand and supply diagram to show the impact of the higher price of natural gas on the market for home heating oil.

The price of a computer is $1,000 and the price of a car is $12,000. What is the relative price of a car? What is the relative price of a computer?

A demand curve is also a willingness-and-ability-to-pay curve.