Question 1

​Suppose the demand for pens increases and the supply for pens decreases.What effect will it have on the equilibrium price for pens?
A)​It will rise
B)It will fall
C)Uncertain
D)​ None

Accepted Answer

An increase in demand and decrease in supply will lead to a shortage. As a result, the equilibrium price will rise due to the scarcity of pens, as consumers compete to purchase the limited supply available.

Question 2

​Which of the following statements is true
A)​a market equilibrium price is where quantity demanded equals quantity supplied
B)a market equilibrium price is where the demand is higher than the supply
C)a market equilibrium price is where the supply is higher than the demand
D)​none of the above

Accepted Answer

A market equilibrium occurs when the quantity demanded by consumers is equal to the quantity supplied by producers. This is represented by the point where the supply and demand curves intersect. At this point, there is no shortage or surplus of goods, and the market is in balance. Option B and C are incorrect because they both suggest an imbalance in the market, with either excess demand or excess supply. Option D is incorrect as well because A is true.

Question 3

​People like consuming peanut butter and jelly together.The price of peanuts increases.At the same time,we see the price for Jelly rise.How does this affect the market for peanut butter?
A)​The demand curve will shift to the left;the supply curve will shift to the left
B)The demand curve will shift to the left;the supply curve will shift to the right
C)The demand curve will shift to the right;the supply curve will shift to the left
D)​The demand curve will shift to the right;the supply curve will shift to the right

Accepted Answer

As the prices of both peanuts and jelly rise, consumers may choose to substitute peanut butter with other spreads, causing a decrease in demand for peanut butter. Additionally, if the cost of producing peanut butter increases, suppliers may reduce the amount they produce, leading to a decrease in supply. Both of these factors suggest a leftward shift in both the demand and supply curves for peanut butter.

Question 4

​A recent medical study reports new benefits of cycling.Simultaneously,the price of the parts needed to make bikes falls. The demand curve would _________ and the supply curve would__________
A)​Shift to the right,shift to the left
B)shift to the left,shift to the right
C)shift to the left,shift to the left
D)​shift to the right,shift to the right

Accepted Answer

The demand curve would shift to the right due to the reported new benefits of cycling increasing consumer interest, and the supply curve would shift to the right as the fall in the price of parts needed to make bikes would likely increase the supply of bikes due to lower production costs.

Question 5

Peter's Pizzeria sells both pizzas and wings.It wants to increase the sales of its pizzas.If it decides to increase the price of the wings,it is assuming that​
A)​the pizza and the wings are substitutes
B)the pizza and the wings are complements
C)the pizza and the wings are unrelated in demands
D)​it cannot increase the sales of its pizzas

Accepted Answer

If Peter's Pizzeria increases the price of wings assuming that pizza and wings are substitutes, customers may choose to purchase more pizzas instead of wings, ultimately increasing the sales of pizzas. This would not be a viable strategy if the pizza and wings were complements or unrelated in demand.

Question 6

How does an increase in the price of laptop memory chips affect the market of laptops?​
A)​The demand curve for laptops shifts to the right
B)The demand curve for laptops shifts to the left
C)The supply curve for laptops shifts to the right
D)​The supply curve for laptops shifts to the left

Accepted Answer

An increase in the price of laptop memory chips increases the production costs for laptops, making it more expensive to produce them. This would likely lead to a decrease in the quantity supplied at each price point, represented by a leftward shift of the supply curve for laptops.

Question 7

​The wages for Nike workers increases.At the same time,we see the price for Adidas shoes increase.This would cause the price for Nike shoes_____________ and the quantity demanded for Nike shoes ____________.
A)​Uncertain;decreases
B)Decreases;increases
C)Decreases;uncertain
D)​Increases;uncertain

Accepted Answer

The increase in wages for Nike workers would likely lead to an increase in the cost of producing Nike shoes, potentially causing the price for Nike shoes to increase. With the price of Adidas shoes also increasing, consumers' choices between the two brands may not significantly change, making the quantity demanded for Nike shoes uncertain.

Question 8

​Firm X both produces automobiles and owns gas stations.If decides to decrease the gas to induce higher sales for the automobiles,it means that
A)​the gas and the automobiles are complements
B)the gas and the automobiles are substitutes
C)the gas and the automobiles are not related in demand
D)​none of the above

Accepted Answer

The gas and the automobiles are complements because a decrease in the price of gas (which is used to run automobiles) is intended to increase the demand for automobiles, indicating that these two goods are used together.

Question 9

​Holding other factors constant,if bad weather destroys the annual crop for carrots,it causes the supply curve for carrots to
A)​Shift to the left,causing the prices of carrots to rise
B)Shift to the left,causing the prices of carrots to fall
C)Stay the same
D)​The supply curve does not shift.Only the demand curve shifts.

Accepted Answer

Bad weather destroying the annual crop for carrots causes a decrease in the quantity supplied at every price. This means that the supply curve shifts to the left. The leftward shift of the supply curve results in a higher equilibrium price and a lower equilibrium quantity of carrots. Therefore, the correct answer is A.

Question 10

​A supply curve describes
A)​the relationship between price and quantity demanded
B)the relationship between price and quantity supplied
C)the relationship between a group of buyers and sellers
D)​none of the above

Accepted Answer

A supply curve shows the relationship between price and the quantity supplied by producers in a market.

Question 11

While you were an intern you bought 5 packages of hot dogs a month.After acquiring a full-time job with a considerably higher salary,you stopped purchasing hot dogs.For you,hot dogs are a
A)​Complementary good
B)Normal good
C)Inferior good
D)​Substitute good

Accepted Answer

An inferior good is a type of good where demand decreases when consumer income rises. In this scenario, the person stopped purchasing hot dogs when they acquired a higher-paying job, indicating that hot dogs were an inferior good for them.

Question 12

​Which of the following factors would shift the supply curve for ice cream to the right?
A)​a new cooling technology emerges
B)the price per unit increases
C)the number of producers in the market for ice cream increase
D)​Both A&C

Accepted Answer

Factors that can shift the supply curve to the right include technological advancements (like new cooling technology) and an increase in the number of producers. Both of these factors would increase the overall supply of ice cream, moving the supply curve to the right.

Question 13

​In the market for used cars we have 10 sellers,willing to sell at the prices of $1000,$2000,$3000,$4000,$5000,$6000,$7000,$8000,$9000,$10000.What could the market price be in order to induce five sellers to offer their cars for sale?
A)​$4001
B)$5001
C)$6001
D)​$7001

Accepted Answer

To induce five sellers to offer their cars for sale, the market price needs to be just above the fifth lowest price, which is $5000. Therefore, $5001 is the correct answer as it would motivate the sellers of cars priced at $1000, $2000, $3000, $4000, and $5000 to sell.

Question 14

​All these factors would shift the supply curve of tobacco,except
A)​Bad weather
B)Change in the price of tobacco
C)Changes in the wages of agricultural workers
D)​A tax charged on the production of tobacco

Accepted Answer

Changes in the price of tobacco would not shift the supply curve, as the price is represented on the vertical axis of the supply and demand graph and does not affect the quantity supplied at each price level. However, bad weather, changes in wages, and taxes on production would all affect the cost of producing tobacco and thus shift the supply curve.

Question 15

​A supply curve slopes upwards because
A)​the higher the price the lower the quantity that the sellers are willing to supply
B)the higher the price the higher the quantity that the sellers are willing to supply
C)the quantity supplied in insensitive to price
D)​an increase in price brings the quantity sold down to zero

Accepted Answer

The law of supply states that as the price of a good increases, the quantity supplied by producers also increases. This is because producers are incentivized to sell more of a product as the price increases, leading to a positively sloped supply curve.

Question 16

Suppose there are 11 buyers and 11 sellers,each willing to buy or sell one unit of a good,with values {$14,$13,$12,$11,$10,$9,$8,$7,$6,$5,$4,}.Assume no transaction costs and a competitive market,what is the equilibrium price in this market?​
A)​7
B)8
C)9
D)​10

Accepted Answer

In a competitive market, the equilibrium price is determined by the intersection of the supply and demand curves. In this case, with 11 buyers and 11 sellers, the supply and demand curves will intersect at the price where the 11th buyer is just willing to buy and the 11th seller is just willing to sell. Since the buyers and sellers have values ranging from $4 to $14, the equilibrium price will be somewhere in this range. However, we know that the 11th buyer and 11th seller will have values of $5 and $10 respectively (since they are the lowest and highest values in the group), so the intersection of their values would be the equilibrium price. Thus, the equilibrium price is $10.

Question 17

​In a market where the equilibrium price is $7,any price lower than $7 would cause
A)​a balanced demand and supply
B)an excess supply
C)an excess demand
D)​none of the above

Accepted Answer

The equilibrium price is the point where the demand and supply curves intersect, resulting in a balanced market. Any price lower than the equilibrium price of $7 would result in a lower supply and a higher demand for the product, causing an excess demand in the market. Hence, the correct answer is C.

Question 18

​Which of the following would shift the supply of Florida Oranges to the left?
A)​a hurricane in Florida destroying a major part of the crop
B)an increase in the price of water per unit,a major input,used to irrigate the orange trees
C)one of the orange grooves shuts down
D)​all of the above

Accepted Answer

A hurricane in Florida destroying a major part of the crop, an increase in the price of water per unit, a major input used to irrigate the orange trees, and one of the orange groves shutting down would all decrease the quantity supplied of Florida oranges, shifting the supply curve to the left. Therefore, all of the above would shift the supply of Florida oranges to the left.

Question 19

​As the income of bus riders increased,the wages of bus drivers increased simultaneously.How does this affect the market for bus rides (inferior good)?
A)​The demand curve will shift to the left;the supply curve will shift to the left
B)The demand curve will shift to the left;the supply curve will shift to the right
C)The demand curve will shift to the right;the supply curve will shift to the left
D)​The demand curve will shift to the right;the supply curve will shift to the right

Accepted Answer

As the income of bus riders increases, they will have a higher willingness and ability to pay for more comfortable modes of transportation, such as cars or taxis, which will result in a decrease in the demand for bus rides. At the same time, the increase in wages of bus drivers will increase the cost of providing bus rides, resulting in a decrease in the supply of bus rides. Therefore, both the demand and supply curves will shift to the left, causing a decrease in the quantity of bus rides demanded and supplied. This demonstrates that bus rides are an inferior good.

Question 20

​In the market for used cars we have 10 sellers,willing to sell at the prices of $1000,$2000,$3000,$4000,$5000,$6000,$7000,$8000,$9000,$10000.If the equilibrium price in the market is $2500,how many cars would be sold?
A)​1
B)2
C)3
D)​4

Accepted Answer

At an equilibrium price of $2500, only the sellers willing to sell at $1000 and $2000 would find buyers, as their asking prices are below or equal to the equilibrium price. This means 2 cars would be sold.

Quiz 7: Understanding Markets and Industry Changes

Suppose the demand for pens increases and the supply for pens decreases.What effect will it have on the equilibrium price for pens?

Which of the following statements is true

People like consuming peanut butter and jelly together.The price of peanuts increases.At the same time,we see the price for Jelly rise.How does this affect the market for peanut butter?

A recent medical study reports new benefits of cycling.Simultaneously,the price of the parts needed to make bikes falls. The demand curve would _ and the supply curve would__

Peter's Pizzeria sells both pizzas and wings.It wants to increase the sales of its pizzas.If it decides to increase the price of the wings,it is assuming that

How does an increase in the price of laptop memory chips affect the market of laptops?

The wages for Nike workers increases.At the same time,we see the price for Adidas shoes increase.This would cause the price for Nike shoes_ and the quantity demanded for Nike shoes .

Firm X both produces automobiles and owns gas stations.If decides to decrease the gas to induce higher sales for the automobiles,it means that

Holding other factors constant,if bad weather destroys the annual crop for carrots,it causes the supply curve for carrots to

A supply curve describes

While you were an intern you bought 5 packages of hot dogs a month.After acquiring a full-time job with a considerably higher salary,you stopped purchasing hot dogs.For you,hot dogs are a

Which of the following factors would shift the supply curve for ice cream to the right?

In the market for used cars we have 10 sellers,willing to sell at the prices of $1000,$2000,$3000,$4000,$5000,$6000,$7000,$8000,$9000,$10000.What could the market price be in order to induce five sellers to offer their cars for sale?

All these factors would shift the supply curve of tobacco,except

A supply curve slopes upwards because

Suppose there are 11 buyers and 11 sellers,each willing to buy or sell one unit of a good,with values {$14,$13,$12,$11,$10,$9,$8,$7,$6,$5,$4,}.Assume no transaction costs and a competitive market,what is the equilibrium price in this market?

In a market where the equilibrium price is $7,any price lower than $7 would cause

Which of the following would shift the supply of Florida Oranges to the left?

As the income of bus riders increased,the wages of bus drivers increased simultaneously.How does this affect the market for bus rides (inferior good) ?

In the market for used cars we have 10 sellers,willing to sell at the prices of $1000,$2000,$3000,$4000,$5000,$6000,$7000,$8000,$9000,$10000.If the equilibrium price in the market is $2500,how many cars would be sold?

Quiz 7: Understanding Markets and Industry Changes

​Suppose the demand for pens increases and the supply for pens decreases.What effect will it have on the equilibrium price for pens?

​Which of the following statements is true

​People like consuming peanut butter and jelly together.The price of peanuts increases.At the same time,we see the price for Jelly rise.How does this affect the market for peanut butter?

​A recent medical study reports new benefits of cycling.Simultaneously,the price of the parts needed to make bikes falls. The demand curve would _________ and the supply curve would__________

Peter's Pizzeria sells both pizzas and wings.It wants to increase the sales of its pizzas.If it decides to increase the price of the wings,it is assuming that​

How does an increase in the price of laptop memory chips affect the market of laptops?​

​The wages for Nike workers increases.At the same time,we see the price for Adidas shoes increase.This would cause the price for Nike shoes_____________ and the quantity demanded for Nike shoes ____________.

​Firm X both produces automobiles and owns gas stations.If decides to decrease the gas to induce higher sales for the automobiles,it means that

​Holding other factors constant,if bad weather destroys the annual crop for carrots,it causes the supply curve for carrots to

​A supply curve describes

While you were an intern you bought 5 packages of hot dogs a month.After acquiring a full-time job with a considerably higher salary,you stopped purchasing hot dogs.For you,hot dogs are a

​Which of the following factors would shift the supply curve for ice cream to the right?

​In the market for used cars we have 10 sellers,willing to sell at the prices of $1000,$2000,$3000,$4000,$5000,$6000,$7000,$8000,$9000,$10000.What could the market price be in order to induce five sellers to offer their cars for sale?

​All these factors would shift the supply curve of tobacco,except

​A supply curve slopes upwards because

Suppose there are 11 buyers and 11 sellers,each willing to buy or sell one unit of a good,with values {$14,$13,$12,$11,$10,$9,$8,$7,$6,$5,$4,}.Assume no transaction costs and a competitive market,what is the equilibrium price in this market?​

​In a market where the equilibrium price is $7,any price lower than $7 would cause

​Which of the following would shift the supply of Florida Oranges to the left?

​As the income of bus riders increased,the wages of bus drivers increased simultaneously.How does this affect the market for bus rides (inferior good) ?

​In the market for used cars we have 10 sellers,willing to sell at the prices of $1000,$2000,$3000,$4000,$5000,$6000,$7000,$8000,$9000,$10000.If the equilibrium price in the market is $2500,how many cars would be sold?