Question 1

Which of the following would shift the supply curve for music streaming apps to the right?
A)an increase in the price of a substitute in production
B)an increase in consumer income (assuming that all music streaming apps are normal goods)
C)a decrease in the number of firms that produce music streaming apps
D)a decrease in the price of an input used to produce music streaming apps

Accepted Answer

A decrease in the price of an input used to produce music streaming apps would decrease the cost of production for firms, allowing them to produce more music streaming apps at any given price level, thus shifting the supply curve to the right. A increase in the price of a substitute in production (A) would increase the cost of production for firms, leading to a decrease in supply. An increase in consumer income (B) would increase demand for music streaming apps, but it would not affect the supply curve. A decrease in the number of firms that produce music streaming apps (C) would decrease the supply of music streaming apps, shifting the supply curve to the left.

Question 2

If, in the market for bananas, the supply curve has shifted to the right, then
A)the supply of bananas has increased.
B)the quantity of bananas supplied has increased.
C)the supply of bananas has decreased.
D)the quantity of bananas supplied has decreased.

Accepted Answer

When the supply curve shifts to the right, this means that there is an increase in the overall supply of bananas in the market. This could be due to factors such as increased production, lower costs of production, or new suppliers entering the market. As a result, both the quantity of bananas supplied and the supply of bananas have increased.

Question 3

A decrease in the price of GPS systems will result in
A)a smaller quantity of GPS systems supplied.
B)a larger quantity of GPS systems supplied.
C)a decrease in the demand for GPS systems.
D)an increase in the supply of GPS systems.

Accepted Answer

A decrease in the price of GPS systems will lead to a smaller quantity of GPS systems supplied, according to the law of supply, which states that there is a direct relationship between price and quantity supplied.

Question 4

The supply curve for watches
A)shows the supply of watches consumers are willing and able to buy at any given price.
B)is downward sloping.
C)shows the relationship between the quantity of watches firms are willing and able to supply and the quantity of watches consumers are willing and able to purchase.
D)shows the relationship between the price of watches and the quantity of watches supplied.

Accepted Answer

The supply curve for watches shows the relationship between the price of watches and the quantity of watches supplied. As the price of watches increases, firms are willing and able to supply a greater quantity of watches, and the supply curve slopes upward from left to right.

Question 5

An increase in the quantity of a product supplied is caused by an increase in the price of the product.

Accepted Answer

According to the law of supply, an increase in price leads to an increase in quantity supplied, as suppliers are incentivized to produce more to earn higher profits.

Question 6

The popularity of digital cameras has enticed large discount stores like Walmart and Costco to offer digital photo printing services.How does this affect the digital photo printing market?
A)The demand curve for digital photo printing services shifts to the right.
B)The demand curve for digital photo printing services shifts to the left.
C)The supply curve for digital photo printing services shifts to the right.
D)The supply curve for digital photo printing services shifts to the left.

Accepted Answer

The entry of large discount stores into the digital photo printing market increases the availability of these services, thus shifting the supply curve to the right.

Question 7

________ means the supply curve has shifted to the right, while ________ refers to a movement along a given supply curve in response to an increase in price.
A)An increase in supply; a decrease in supply
B)A decrease in supply; an increase in supply
C)An increase in supply; an increase in quantity supplied
D)A decrease in supply; a decrease in quantity supplied

Accepted Answer

An increase in supply refers to a shift of the supply curve to the right, which means that at every price level, there is now a greater quantity supplied. However, an increase in quantity supplied refers only to a movement along a given supply curve in response to an increase in price.

Question 8

A change in supply is represented by a shift of the supply curve.

Accepted Answer

A change in supply is caused by factors such as changes in production costs, technology, or government policies, and results in a shift of the entire supply curve to the left or right. This is different from a movement along the supply curve, which is caused by changes in price alone.

Question 9

Last month, the Tecumseh Corporation supplied 400 units of three-ring binders at $6 per unit.This month, the company supplied the same quantity of binders at $4 per unit.Based on this evidence, Tecumseh has experienced
A)a decrease in supply.
B)an increase in supply.
C)an increase in the quantity supplied.
D)a decrease in the quantity supplied.

Accepted Answer

The decrease in price indicates that the company has increased its supply, as it is able to offer the same quantity of units at a lower cost. Therefore, the correct answer is B, an increase in supply.

Question 10

From a supply perspective, what impact would an increase in the price of motorcycles have on the market for motorcycles?

Accepted Answer

The answer of From a supply perspective, what impact would...

Question 11

A supply curve
A)is a table that shows the relationship between the price of a product and the quantity of the product supplied.
B)is a curve that shows the relationship between the price of a product and the quantity of the product supplied.
C)is the relationship between the supply of a good and the cost of producing the good.
D)is a curve that shows the relationship between the price of a product and the quantity of the product that producers and consumers are willing to exchange.

Accepted Answer

A supply curve is a graphical representation of the relationship between the price of a product and the quantity of the product supplied. It is a curve that slopes upward from left to right, indicating that as the price of a product increases, the quantity supplied by producers also increases. This is because producers are incentivized to supply more of a product as its price increases, as they can make more profit.

Question 12

Alberta ranchers can raise either cattle or sheep on their land.Which of the following would cause the supply of sheep to increase?
A)an increase in the price of sheep
B)a decrease in the price of cattle
C)an increase in the demand for cattle
D)an increase in the price of sheep feed

Accepted Answer

If the price of cattle decreases, it may no longer be profitable for ranchers to raise cattle, leading them to switch to raising sheep instead. This would cause the supply of sheep to increase. The other options (increase in sheep price, increase in cattle demand, increase in sheep feed price) would not necessarily affect the decision to raise sheep vs. cattle.

Question 13

Danielle Ocean pays for monthly pool maintenance for her home swimming pool.Last week the owner of the pool service informed Danielle that she will have to raise her monthly service fee because of increases in the price of pool chemicals.How is the market for pool maintenance services affected by this?
A)There is an increase in the supply of pool maintenance services.
B)There is a decrease in the demand for pool maintenance services.
C)There is a decrease in the quantity of pool maintenance services supplied.
D)There is a decrease in the supply of pool maintenance services.

Accepted Answer

The owner of the pool service is raising the monthly fee, which indicates an increase in the cost of providing the service. This means that the supply of pool maintenance services will decrease as some providers may go out of business or reduce their services. This also means that the price of pool maintenance services will increase, leading to a decrease in the quantity demanded by customers. Therefore, there is a decrease in the supply of pool maintenance services.

Question 14

If, in the market for apples, the supply has decreased, then
A)the supply curve for apples has shifted to the right.
B)there has been a movement upwards along the supply curve for apples.
C)the supply curve for apples has shifted to the left.
D)there has been a movement downwards along the supply curve for apples.

Accepted Answer

When the supply of apples decreases, it means that there is less apples available to be sold at all prices. This leads to a leftward shift of the supply curve, as the quantity supplied decreases at every price.

Question 15

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

Accepted Answer

The answer of An increase in the number of firms...

Question 16

What is the law of supply? What does this law imply about the shape of the supply curve?

Accepted Answer

The answer of What is the law of supply? What...

Question 17

If a firm expects that the price of its product will be higher in the future than it is today,
A)the firm will go out of business.
B)the firm has an incentive to increase supply now and decrease supply in the future.
C)the firm has an incentive to decrease quantity supplied now and increase quantity supplied in the future.
D)the firm has an incentive to decrease supply now and increase supply in the future.

Accepted Answer

If the firm expects the price of its product to be higher in the future, it will have an incentive to decrease supply now to create scarcity and increase the price, and increase supply in the future when the price is higher to maximize its revenue. Therefore, the best choice is D.

Question 18

If a firm has an incentive to increase supply now and decrease supply in the future, the firm expects that the
A)price of its product will be lower in the future than it is today.
B)price of its product will be higher in the future than it is today.
C)price of inputs will be lower in the future than they are today.
D)demand for the product will be lower in the future than it is today.

Accepted Answer

DIf a firm anticipates lower prices or lower demand for its product in the future, it has an incentive to increase supply now (to sell more while prices or demand are higher) and decrease supply later (when prices or demand are expected to be lower).

Question 19

Indicate whether each of the following situations would shift the supply curve to the left, to the right, or not at all.
a.An increase in the number of firms in the market
b.An increase in the current price of the product
c.A decrease in productivity
d.An increase in the expected future price of a product
e.A decrease in the price of an input

Accepted Answer

The answer of Indicate whether each of the following situations...

Question 20

Quantity supplied refers to the amount of a good or service that a firm is willing and able to supply at a given price.

Accepted Answer

Quantity supplied is the amount of a good or service that a firm is able and willing to supply at a given price. This is a basic concept in microeconomics.

Quiz 3: Where Prices Come From: The Interaction of Supply and Demand

Which of the following would shift the supply curve for music streaming apps to the right?

If, in the market for bananas, the supply curve has shifted to the right, then

A decrease in the price of GPS systems will result in

The supply curve for watches

An increase in the quantity of a product supplied is caused by an increase in the price of the product.

The popularity of digital cameras has enticed large discount stores like Walmart and Costco to offer digital photo printing services.How does this affect the digital photo printing market?

means the supply curve has shifted to the right, while refers to a movement along a given supply curve in response to an increase in price.

A change in supply is represented by a shift of the supply curve.

Last month, the Tecumseh Corporation supplied 400 units of three-ring binders at $6 per unit.This month, the company supplied the same quantity of binders at $4 per unit.Based on this evidence, Tecumseh has experienced

From a supply perspective, what impact would an increase in the price of motorcycles have on the market for motorcycles?

A supply curve

Alberta ranchers can raise either cattle or sheep on their land.Which of the following would cause the supply of sheep to increase?

If, in the market for apples, the supply has decreased, then

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

What is the law of supply? What does this law imply about the shape of the supply curve?

If a firm expects that the price of its product will be higher in the future than it is today,

If a firm has an incentive to increase supply now and decrease supply in the future, the firm expects that the

Quantity supplied refers to the amount of a good or service that a firm is willing and able to supply at a given price.