Question 1

Suppose the equilibrium price of bottled water has risen from $1.00 per bottle to $2.00 per bottle and the equilibrium quantity has increased.These changes are a result of a ________ shift of the ________ curve for bottled water.

Accepted Answer

A rightward shift of the demand curve indicates an increase in demand at every price level, which can lead to both a higher equilibrium price and a higher equilibrium quantity, as described in the scenario.

Question 2

Suppose that people find out that eating more fish improves their health,leading them to increase their demand for fish.As a result,the equilibrium price of fish ________ and the equilibrium quantity ________.

Accepted Answer

When people increase their demand for fish, the demand curve shifts to the right. This creates a shortage at the initial price, causing the price to rise. The increase in price stimulates producers to increase their quantity supplied, and the equilibrium quantity increases as a result. Therefore, the equilibrium price of fish rises and the equilibrium quantity increases.

Question 3

For consumers,goods A and B are complementary goods.The cost of a resource used in the production of A decreases.As a result,

Accepted Answer

When the cost of a resource used in the production of complementary good A decreases, the supply of A will increase and thus the price of A will decrease. This leads to an increase in the demand for complementary good B, causing the price of B to rise. Therefore, the equilibrium price of B will rise and the equilibrium price of A will fall.

Question 4

Coffee and sugar are complements.If a poor sugar harvest leads to an increase in the price of sugar,there will also be

Accepted Answer

Coffee and sugar are complements, meaning they are often consumed together. If the price of sugar increases due to a poor harvest, consumers may be less likely to purchase both coffee and sugar together, leading to a decrease in demand for coffee. This decrease in demand may lead to a decrease in the price of coffee.

Question 5

If the price of a movie download falls,the rental rate of DVDs ________ and the equilibrium quantity of DVDs rented ________.

Accepted Answer

If the price of a movie download falls, consumers will be more likely to choose the cheaper option and demand for DVD rentals will decrease, leading to a decrease in the equilibrium quantity of DVDs rented. The rental rate of DVDs is also likely to fall as rental companies may lower prices to compete with the cheaper movie download option. Therefore, choice C is the best answer.

Question 6

Which of the following raises the price of a used car and increases the equilibrium quantity sold?

Accepted Answer

The answer of Which of the following raises the price...

Question 7

An increase in demand combined with no change in supply

Accepted Answer

An increase in demand would mean that consumers are willing to pay more for the same quantity of a good. If supply remains constant, there are now more buyers competing for the same amount of available goods, causing an increase in the equilibrium price as suppliers can charge more for their limited supply.

Question 8

If the U.S.Surgeon General announces that increased wheat consumption could cause heightened anxiety levels among children and adults,what happens to the equilibrium price and quantity of shredded wheat?

Accepted Answer

The announcement would likely lead to a decrease in demand for shredded wheat as consumers try to avoid the potential negative health effects. This decrease in demand would cause both the equilibrium price and quantity of shredded wheat to fall.

Question 9

Doctors find that one aspirin per day reduces the risk of heart attacks.Demand for aspirin will

Accepted Answer

When demand for a product increases, typically both the equilibrium price and quantity increase as suppliers adjust to meet the higher demand.

Question 10

Long-distance travel by bus is an inferior good.As people's incomes increase and other things remain the same,you predict that the

Accepted Answer

The answer of Long-distance travel by bus is an inferior...

Question 11

If the U.S.Surgeon General announced that increased grapefruit juice consumption could help prevent heart attacks,what would happen to the equilibrium price and quantity of grapefruit juice?

Accepted Answer

The announcement would likely increase demand for grapefruit juice as people try to prevent heart attacks, leading to a higher equilibrium price and quantity as suppliers respond to the increased demand.

Question 12

The price of a gallon of milk falls.Which of the following is a possible cause?

Accepted Answer

If milk is discovered to cause diabetes, the demand for milk would decrease, leading to a fall in its price.

Question 13

Which of the following raises the equilibrium price and increases the equilibrium quantity of used cars?

Accepted Answer

A fall in income increases the demand for inferior goods like used cars, raising both the equilibrium price and quantity.

Question 14

If the demand for hamburgers decreases,the equilibrium price

Accepted Answer

If the demand for hamburgers decreases, there will be excess supply in the market. In order to sell their products, burger sellers will need to reduce the price which in turn reduces the equilibrium price. As a result, the equilibrium quantity also decreases. Thus, choice D is the correct answer.

Question 15

Until 2007,the price of sport utility vehicles (SUVs) rose and each year more were purchased.This experience suggests that

Accepted Answer

The fact that the price of SUVs rose and more were purchased suggests that there was a rightward shift of the demand curve. This could have been due to factors such as an increase in consumer incomes, a change in preferences towards larger vehicles, or successful marketing campaigns by automakers. The other options (A, B, and C) are not supported by the information given in the question.

Question 16

If good A is a normal good and income increases,the equilibrium price of A ________ and the equilibrium quantity of A ________.

Accepted Answer

A normal good is a type of good where people demand more of it when their income increases. Therefore, as income increases, the demand for good A increases which leads to an increase in its equilibrium price and quantity.

Question 17

Coffee and sugar are complements.If the supply curve of coffee shifts leftward because of poor weather,then there will be

Accepted Answer

Since coffee and sugar are complements, a decrease in the supply of coffee will lead to a decrease in demand for sugar. This will cause the price of sugar to decrease as well. Therefore, option B is the correct answer. Option A is incorrect because a decrease in the supply of coffee will not increase the price of sugar. Option C is incorrect as the demand curve for coffee is not affected by the supply curve of coffee. Option D is incorrect as the supply curve for sugar is not affected by the supply curve of coffee.

Question 18

Between 2001 and 2010,equilibrium college tuition rose from $15,000 to $21,000 and equilibrium enrollment increased from 16 million to 21 million students. These changes could be the result of

Accepted Answer

The increase in equilibrium college tuition and enrollment suggest that there has been an increase in demand for higher education during the time period of 2001-2010. As demand increases, market equilibrium price and quantity both increase, which is what we observe in this scenario.

Question 19

In March,the quantity of orange juice sold in the town of Jackson was 3000 cartons and the price $3.In May,the quantity of orange juice sold in the town of Jackson was 3500 cartons and the price was $3.20.This change in the price and quantity sold could have been the result of

Accepted Answer

BCThe increase in both price and quantity sold suggests a shift in demand, which could be caused by factors like a positive medical study (A), reduced discounts (B), or a supply shock increasing prices and, indirectly, perceived value (C). A warm winter increasing supply (D) would typically lower prices, not raise them, making it an unlikely cause.

Question 20

What will happen to the equilibrium price and equilibrium quantity of ice cream cones when consumers' incomes decrease?

Accepted Answer

If ice cream cones are a normal good, then a decrease in consumers' incomes will lead to a decrease in demand for ice cream cones. As a result, the equilibrium price and equilibrium quantity of ice cream cones will both decrease.

Quiz 3: Demand and Supply

Suppose the equilibrium price of bottled water has risen from $1.00 per bottle to $2.00 per bottle and the equilibrium quantity has increased.These changes are a result of a shift of the curve for bottled water.

Suppose that people find out that eating more fish improves their health,leading them to increase their demand for fish.As a result,the equilibrium price of fish and the equilibrium quantity .