Question 1

Recall the Application about the decrease in the price of wool in the 1990s to answer the following question(s). In the 1990s, the world price of wool decreased by about 30 percent and prices have remained relatively low since then. In 2012, an organization in New Zealand proposed that sheep shearing be added to the Commonwealth Games and the Olympics as a spectator sport in an effort to increase the awareness and the demand for wool.
-According to the Application,the policies proposed to help raise the price of wool focuses on

Accepted Answer

The organization proposed adding sheep shearing as a spectator sport to increase awareness and demand for wool. This indicates that the proposed policies aim to raise the demand for wool.

Question 2

The market supply curve for a particular good

Accepted Answer

The market supply curve for a particular good shows the relationship between the price of the good and the quantity that all producers together are willing to sell, assuming that the other variables besides product price that affect supply are fixed and that the number of producers is also fixed. Therefore, all of the above statements are true.

Question 3

Recall the Application about the decrease in the price of wool in the 1990s to answer the following question(s). In the 1990s, the world price of wool decreased by about 30 percent and prices have remained relatively low since then. In 2012, an organization in New Zealand proposed that sheep shearing be added to the Commonwealth Games and the Olympics as a spectator sport in an effort to increase the awareness and the demand for wool.
-According to the Application,why might introducing sheep shearing not be an effective policy to raise wool prices?

Accepted Answer

Increased sheep shearing as a spectator sport is unlikely to directly affect the amount of wool produced. The proposal aims to raise awareness and demand for wool, not necessarily to increase the immediate supply. However, the effectiveness of this strategy in raising wool prices is questionable because simply increasing awareness does not guarantee a significant rise in demand or prices, especially if the supply remains unchanged or increases.

Question 4

If at a price of $1,000,8 different laptop manufacturers are willing to sell 20 laptops each.If the 8 manufacturers are the only sellers of laptops in the market,then at a price of $1,000,there are ________ laptops supplied in the market.

Accepted Answer

Each of the 8 laptop manufacturers are willing to sell 20 laptops at a price of $1,000. Therefore, the total number of laptops supplied in the market is 8 x 20 = 160.

Question 5

Suppose that the quantity of pizza supplied exceeds the quantity of pizza demanded.We would expect that

Accepted Answer

When the quantity of pizza supplied exceeds the quantity of pizza demanded, there is a surplus of pizza in the market. To get rid of this surplus, producers will have to lower the price of pizza to encourage consumers to purchase more. Therefore, we can expect the price of pizza to decrease in this situation.

Question 6

When a supply curve is drawn,which of the following is NOT held constant?

Accepted Answer

The price of the good is not held constant when drawing a supply curve. The other factors, such as taxes and subsidies, state of production technology, and prices of inputs, can affect the supply curve and are held constant in order to isolate the effect of changes in the price of the good on the quantity supplied.

Question 7

If we observe that the price is rising in the sugar market,it could be due to

Accepted Answer

If the price of sugar is rising, it indicates that there is a larger demand for sugar than the available supply. This means that buyers are willing to pay a higher price to obtain the limited amount of sugar that is available. Thus, it is most likely due to excess demand for sugar (option B). Option A and C are incorrect, because both indicate an increase in the supply of sugar. Option D is also incorrect, because it is the opposite of what is happening; a decrease in demand would lead to lower prices, not rising prices.

Question 8

A minimum supply price is defined as

Accepted Answer

The minimum supply price is the lowest price at which a product is made available for sale, reflecting the minimum amount sellers are willing to accept to cover their costs and provide the product.

Question 9

The market supply curve is

Accepted Answer

The market supply curve is upward sloping because as the price of a good or service increases, producers are willing and able to supply more of it to the market. Conversely, as the price of a good or service decreases, producers are willing and able to supply less of it to the market. This relationship between price and quantity supplied results in a positively sloping supply curve.

Question 10

On the "supply side" of a market,producers indicate to consumers what they are willing to sell,in what quantity,and at what price.

Accepted Answer

This statement accurately describes the relationship between producers and consumers in a market economy. Producers determine what goods and services they are willing to offer, at what price, and in what quantity, and consumers then decide whether or not they are willing to buy those goods and services based on their own preferences and available resources. This is known as the law of supply and demand, which is a fundamental principle of modern economics.

Question 11

The market supply curve is

Accepted Answer

The market supply curve is upward sloping, meaning that as the price of a good rises, more suppliers are willing to enter the market and offer their goods. However, the market supply curve is flatter than an individual's supply curve because it reflects the combined output of many suppliers, each with their own unique cost structures and production technologies. As a result, the market supply curve is less responsive to changes in price than an individual supplier's curve, which may be steeper due to the higher marginal costs and diminishing marginal returns associated with producing more units.

Question 12

When a supply curve is drawn,which of the following is held constant?

Accepted Answer

When constructing a supply curve, assumptions are made to hold certain variables constant to isolate the relationship between the price of the good and the quantity supplied. This includes keeping constant the amount of taxes or subsidies a firm pays or receives, the number of sellers in the market, and the prices of inputs. These factors are assumed to be constant to focus on how changes in the price of the good itself affect the quantity supplied.

Question 13

Recall the Application about the decrease in the price of wool in the 1990s to answer the following question(s). In the 1990s, the world price of wool decreased by about 30 percent and prices have remained relatively low since then. In 2012, an organization in New Zealand proposed that sheep shearing be added to the Commonwealth Games and the Olympics as a spectator sport in an effort to increase the awareness and the demand for wool.
-According to the Application,which of the following is the result of the falling prices of wool worldwide?

Accepted Answer

The falling prices of wool worldwide likely led to a lower quantity of wool supplied, as producers may reduce production when prices are not favorable.

Question 14

If a computer company will sell a laptop only if the price is $400 or higher,then $400 is known as

Accepted Answer

The minimum price at which the computer company is willing to supply or sell the laptop is $400 or higher. This is known as the minimum supply price, which is the minimum price point necessary to cover the costs of producing the laptop and earn a profit.

Question 15

At a price of $1,000,Dell Computer Co.is willing to sell 20 laptops and Lenovo is willing to sell 40 laptops.Hewlett Packard will only sell laptops if the price is $1,300 or higher.From the point of view of Hewlett Packard,$1,300 is the

Accepted Answer

The minimum supply price is the lowest price at which a seller is willing to sell a product. For Hewlett Packard, this is $1,300, as they will only sell laptops at this price or higher, indicating it's the minimum price they are willing to accept to supply laptops.

Question 16

Suppose that the price for fully electric cars made by Toyota increases.The quantity of fully electric cars supplied in the market will

Accepted Answer

When the price of fully electric cars made by Toyota increases, Toyota would be willing to sell more fully electric vehicles due to the higher profit margins (A), and other manufacturers would be incentivized to enter the market to take advantage of the higher prices, thus increasing the overall supply (C).

Question 17

At a price of $1,000,Dell Computer Co.is willing to sell 20 laptops and Lenovo is willing to sell 40 laptops.Hewlett Packard will only sell laptops if the price is $1,300 or higher.At $1,000,the market supply for laptops is

Accepted Answer

At a price of $1,000, both Dell and Lenovo are willing to sell laptops, with Dell willing to sell 20 and Lenovo willing to sell 40. The total market supply at this price is therefore 20 + 40 = 60 laptops. Hewlett Packard's willingness to sell only at a price of $1,300 or higher does not affect the market supply at the $1,000 price point.

Question 18

Recall the Application about the decrease in the price of wool in the 1990s to answer the following question(s). In the 1990s, the world price of wool decreased by about 30 percent and prices have remained relatively low since then. In 2012, an organization in New Zealand proposed that sheep shearing be added to the Commonwealth Games and the Olympics as a spectator sport in an effort to increase the awareness and the demand for wool.
-According to the Application,which of the following is the most likely reason for the falling prices of wool worldwide?

Accepted Answer

The application states that the world price of wool decreased by about 30 percent in the 1990s and prices have remained relatively low since then. This suggests that there is a lower demand for wool, which is likely the reason for the falling prices.

Question 19

As the price of a product rises,the quantity supplied increases.

Accepted Answer

This statement follows the law of supply, which states that as the price of a good or service increases, the quantity supplied also increases. This is because producers are motivated to supply more of the product at higher prices in order to increase their profits.

Question 20

Why is the market supply curve positively sloped?

Accepted Answer

A higher price incentivizes more firms to enter the market (A) and existing firms to increase their quantity supplied (C), resulting in an overall increase in market supply.

Quiz 4: Demand,supply,and Market Equilibrium

The market supply curve for a particular good

If at a price of $1,000,8 different laptop manufacturers are willing to sell 20 laptops each.If the 8 manufacturers are the only sellers of laptops in the market,then at a price of $1,000,there are ________ laptops supplied in the market.

Suppose that the quantity of pizza supplied exceeds the quantity of pizza demanded.We would expect that

When a supply curve is drawn,which of the following is NOT held constant?

If we observe that the price is rising in the sugar market,it could be due to

A minimum supply price is defined as

The market supply curve is

On the "supply side" of a market,producers indicate to consumers what they are willing to sell,in what quantity,and at what price.

The market supply curve is

When a supply curve is drawn,which of the following is held constant?

If a computer company will sell a laptop only if the price is $400 or higher,then $400 is known as

At a price of $1,000,Dell Computer Co.is willing to sell 20 laptops and Lenovo is willing to sell 40 laptops.Hewlett Packard will only sell laptops if the price is $1,300 or higher.From the point of view of Hewlett Packard,$1,300 is the

Suppose that the price for fully electric cars made by Toyota increases.The quantity of fully electric cars supplied in the market will

At a price of $1,000,Dell Computer Co.is willing to sell 20 laptops and Lenovo is willing to sell 40 laptops.Hewlett Packard will only sell laptops if the price is $1,300 or higher.At $1,000,the market supply for laptops is

As the price of a product rises,the quantity supplied increases.

Why is the market supply curve positively sloped?