Question 1

What happens to the equilibrium price and quantity of coffee when there is a leftward shift of the supply curve for tea? Explain.

Accepted Answer

The answer of What happens to the equilibrium price and...

Question 2

During a mild winter,the price of home heating oil is expected to be less than it would be during a normal winter.

Accepted Answer

During a mild winter,people do not need to operate their furnace as often as in a normal winter.The demand for home heating oil lies to the left of where it would be under normal weather conditions.As a result,the price of oil falls.

Question 3

Suppose the demand for widgets is given by Q_D= 100 - 5p - p_d+ 2Y,where Y is average consumer income,p is the price of lemons,and p_d is the price of doodads.According to this equation,widgets are an inferior good.

Accepted Answer

As income increases,because of the positive coefficient (+2)for income,demand will increase.This indicates widgets are normal.

Question 4

Explain why the shape of the demand curve will determine the how a shock to the market equilibrium affect price and quantity.

Accepted Answer

The answer of Explain why the shape of the demand...

Question 5

-The above figure shows the supply and demand curves for rice in the U.S.and in Japan.Assume there is no trade between the two countries.If fertilizer price drop causes the supply curves in both countries to shift rightward by the same amount,then

Accepted Answer

When the supply curve shifts rightward in both countries due to a drop in fertilizer prices, it means that the supply of rice increases in both countries. The extent of the increase in quantity demanded as a result of this shift depends on the slope of the demand curve. A steeper demand curve, as typically represented for Japan, indicates less sensitivity to price changes (inelastic demand), while a flatter demand curve, as typically represented for the U.S., indicates more sensitivity to price changes (elastic demand). Therefore, the quantity will increase more in the U.S. than in Japan because the U.S. demand curve is more responsive to changes in price.

Question 6

-The above figure shows the supply and demand curves for rice in the U.S.and in Japan.Assume there is no trade between the two countries.If bad weather causes the supply curves in each country to shift leftward by the same amount,then

Accepted Answer

When the supply curve shifts leftward, it indicates a decrease in supply. Given the same shift in both countries, the impact on price depends on the elasticity of demand. If demand is more inelastic (as it typically is for staple foods like rice in Japan), the price increase will be more pronounced there than in the U.S., where demand might be more elastic due to the availability of substitute goods.

Question 7

Consider the following products.Which of them has the flattest demand curve?

Accepted Answer

Butter is a common product that has a relatively flat demand curve. This means that changes in price have only a minor impact on the quantity demanded. Insulin, on the other hand, has a much steeper demand curve, as it is a necessary medication for those with diabetes. Alcohol and cigarettes are also known to have relatively inelastic demand, but they still have steeper curves than butter.

Question 8

The change in price that results from a rightward shift in demand will be greater if

Accepted Answer

The change in price resulting from a shift in demand depends on the slope of the supply curve. If the supply curve is relatively steep (i.e. upward sloping and relatively inelastic), then even a small shift in demand will result in a relatively large change in price. If the supply curve is relatively flat (i.e. upward sloping and relatively elastic), then a shift in demand will result in a smaller change in price. Therefore, the change in price resulting from a rightward shift in demand will be greater if the supply curve is relatively steep than if it is relatively flat.

Question 9

As the supply curve shifts to the right,the increase in quantity demanded will not depend on the shape of the demand curve.

Accepted Answer

The flatter the demand curve,the larger the quantity reaction.

Question 10

The change in price that results from a leftward shift of the supply curve will be greater if

Accepted Answer

When the demand curve is relatively steep, a small decrease in supply will result in a relatively large increase in price. In contrast, when the demand curve is relatively flat, a larger decrease in supply is required to result in the same increase in price. Therefore, the change in price resulting from a leftward shift of the supply curve will be greater if the demand curve is relatively steep.

Question 11

A vertical demand curve for a particular good implies that consumers are

Accepted Answer

A vertical demand curve means that consumers will buy the same quantity of the good regardless of changes in price, suggesting that their purchasing decisions are not affected by price changes. This is known as inelastic demand.

Question 12

A vertical demand curve results in

Accepted Answer

A vertical demand curve indicates that the quantity demanded is fixed at a certain level, regardless of changes in price. This means that when the supply curve shifts, there will be no change in quantity demanded, and therefore no change in price either. Thus, choice A is the correct answer.

Question 13

If the demand curve for a good is horizontal and the price is positive,then a leftward shift of the supply curve results in

Accepted Answer

The answer of If the demand curve for a good...

Question 14

The supply and demand for wheat is given by Q_S= 200 + .2A + p and Q_D= 500 - p,where p is the price of wheat and A is the amount of rainfall (inches per year).The effect of an incremental increase in rainfall on equilibrium will be

Accepted Answer

An increase in rainfall (A) increases the supply (Q_S) by 0.2 units for each inch, shifting the supply curve rightward, leading to a decrease in the equilibrium price by 10¢.

Question 15

A drought in the Midwest will raise the price of wheat because of a

Accepted Answer

A drought in the Midwest will decrease the supply of wheat as there will be a lower yield, leading to a leftward shift in the supply curve. With a lower supply and the same amount of demand, the price of wheat will increase.

Question 16

When import restrictions are placed on a good,and as a result the price of the good increases,the demand curve for that good will

Accepted Answer

The demand curve represents consumers' willingness to purchase at different prices, and it is not directly affected by changes in supply or import restrictions. The increase in price due to import restrictions is a movement along the demand curve, not a shift of the curve itself.

Question 17

If the supply curve of cigarettes shifts to the left,quantity demanded for cigarettes

Accepted Answer

If the supply curve of cigarettes shifts to the left, it means there is now less supply of cigarettes in the market. Hence, the price of cigarettes will increase, leading to a decrease in the quantity demanded. However, the decrease in quantity demanded may not be substantial, depending on the degree of shift in the supply curve. Therefore, the best choice is D, which indicates a slight decrease in quantity demanded.

Question 18

If pizza and tacos are substitutes,a decrease in the price of tacos would lead to a

Accepted Answer

The answer of If pizza and tacos are substitutes,a decrease...

Question 19

-The above figure shows the supply and demand curves for rice in the U.S.and Japan.Assume there is no trade between the two countries.If bad weather causes the supply curves in each country to shift leftward by the same amount,then

Accepted Answer

A leftward shift in the supply curve indicates a decrease in supply. According to basic economic principles, if demand remains constant and supply decreases, prices will increase. This applies to both the U.S. and Japan, hence the price of rice will increase in both countries.

Question 20

When two goods are substitutes,a shock that raises the price of one good causes the price of the other good to

Accepted Answer

When two goods are substitutes, an increase in the price of one good makes the other good more attractive to consumers, leading to an increase in demand for the substitute good. This increased demand can cause the price of the substitute good to increase.

Quiz 2: Supply and Demand

What happens to the equilibrium price and quantity of coffee when there is a leftward shift of the supply curve for tea? Explain.

During a mild winter,the price of home heating oil is expected to be less than it would be during a normal winter.

Suppose the demand for widgets is given by Q_D= 100 - 5p - p_d+ 2Y,where Y is average consumer income,p is the price of lemons,and p_d is the price of doodads.According to this equation,widgets are an inferior good.

Explain why the shape of the demand curve will determine the how a shock to the market equilibrium affect price and quantity.

-The above figure shows the supply and demand curves for rice in the U.S.and in Japan.Assume there is no trade between the two countries.If fertilizer price drop causes the supply curves in both countries to shift rightward by the same amount,then

-The above figure shows the supply and demand curves for rice in the U.S.and in Japan.Assume there is no trade between the two countries.If bad weather causes the supply curves in each country to shift leftward by the same amount,then

Consider the following products.Which of them has the flattest demand curve?

The change in price that results from a rightward shift in demand will be greater if

As the supply curve shifts to the right,the increase in quantity demanded will not depend on the shape of the demand curve.

The change in price that results from a leftward shift of the supply curve will be greater if

A vertical demand curve for a particular good implies that consumers are

A vertical demand curve results in

If the demand curve for a good is horizontal and the price is positive,then a leftward shift of the supply curve results in

The supply and demand for wheat is given by Q_S= 200 + .2A + p and Q_D= 500 - p,where p is the price of wheat and A is the amount of rainfall (inches per year) .The effect of an incremental increase in rainfall on equilibrium will be

A drought in the Midwest will raise the price of wheat because of a

When import restrictions are placed on a good,and as a result the price of the good increases,the demand curve for that good will

If the supply curve of cigarettes shifts to the left,quantity demanded for cigarettes

If pizza and tacos are substitutes,a decrease in the price of tacos would lead to a

-The above figure shows the supply and demand curves for rice in the U.S.and Japan.Assume there is no trade between the two countries.If bad weather causes the supply curves in each country to shift leftward by the same amount,then

When two goods are substitutes,a shock that raises the price of one good causes the price of the other good to

Quiz 2: Supply and Demand

What happens to the equilibrium price and quantity of coffee when there is a leftward shift of the supply curve for tea? Explain.

During a mild winter,the price of home heating oil is expected to be less than it would be during a normal winter.

Suppose the demand for widgets is given by QD = 100 - 5p - pd + 2Y,where Y is average consumer income,p is the price of lemons,and pd is the price of doodads.According to this equation,widgets are an inferior good.

Explain why the shape of the demand curve will determine the how a shock to the market equilibrium affect price and quantity.

-The above figure shows the supply and demand curves for rice in the U.S.and in Japan.Assume there is no trade between the two countries.If fertilizer price drop causes the supply curves in both countries to shift rightward by the same amount,then

-The above figure shows the supply and demand curves for rice in the U.S.and in Japan.Assume there is no trade between the two countries.If bad weather causes the supply curves in each country to shift leftward by the same amount,then

Consider the following products.Which of them has the flattest demand curve?

The change in price that results from a rightward shift in demand will be greater if

As the supply curve shifts to the right,the increase in quantity demanded will not depend on the shape of the demand curve.

The change in price that results from a leftward shift of the supply curve will be greater if

A vertical demand curve for a particular good implies that consumers are

A vertical demand curve results in

If the demand curve for a good is horizontal and the price is positive,then a leftward shift of the supply curve results in

The supply and demand for wheat is given by QS = 200 + .2A + p and QD = 500 - p,where p is the price of wheat and A is the amount of rainfall (inches per year) .The effect of an incremental increase in rainfall on equilibrium will be

A drought in the Midwest will raise the price of wheat because of a

When import restrictions are placed on a good,and as a result the price of the good increases,the demand curve for that good will

If the supply curve of cigarettes shifts to the left,quantity demanded for cigarettes

If pizza and tacos are substitutes,a decrease in the price of tacos would lead to a

-The above figure shows the supply and demand curves for rice in the U.S.and Japan.Assume there is no trade between the two countries.If bad weather causes the supply curves in each country to shift leftward by the same amount,then

When two goods are substitutes,a shock that raises the price of one good causes the price of the other good to

Suppose the demand for widgets is given by Q_D= 100 - 5p - p_d+ 2Y,where Y is average consumer income,p is the price of lemons,and p_d is the price of doodads.According to this equation,widgets are an inferior good.

The supply and demand for wheat is given by Q_S= 200 + .2A + p and Q_D= 500 - p,where p is the price of wheat and A is the amount of rainfall (inches per year) .The effect of an incremental increase in rainfall on equilibrium will be