Question 1

Economists say there has been a change in demand when there is

Accepted Answer

A change in demand is indicated by a shift of the demand curve, where the quantity demanded changes at every price level. This is different from a movement along the demand curve, which indicates a change in quantity demanded due to a change in price. A change in supply is indicated by a shift of the supply curve. A price change or quantity change can be a result of a change in demand or supply, but in and of themselves do not indicate a change in demand.

Question 2

A fall in the price of raw milk (which is used in the production of ice cream)will

Accepted Answer

A fall in the price of raw milk (an input in ice cream production) will lower the cost of production for ice cream producers. This will make it more profitable for ice cream producers to supply ice cream at any given price level, resulting in an increase in the quantity supplied at each price level. This will cause the supply curve of ice cream to shift to the right, increasing the supply of ice cream.

Question 3

The term "supply" in a particular market refers to

Accepted Answer

The term "supply" in a particular market refers to the entire relationship between quantity supplied and price, which is expressed as a supply curve or supply schedule. It includes all the different quantities that producers are willing and able to sell at different prices, not just a single point or entry. The actual quantity sold to consumers will depend on both supply and demand conditions in the market, and may not necessarily be equal to the quantity supplied by producers.

Question 4

Which of the following events would result in a change in the quantity demanded for some commodity but NOT a change in the demand for that commodity?

Accepted Answer

A change in the price of the commodity would lead to a change in the quantity demanded, but not a change in the overall demand for the commodity. This is because a change in price would move the quantity demanded along the existing demand curve, rather than shift the entire demand curve. The other options listed would all result in a change in the overall demand for the commodity.

Question 5

Suppose new medical research suggests that consuming 200 grams of tofu everyday helps to prevent heart disease.Widespread knowledge of this research,other things being equal,is likely to have what impact on the market for tofu?

Accepted Answer

The new medical research suggests that consuming tofu everyday helps to prevent heart disease, which could increase the demand for tofu as more consumers would want to consume it. This would lead to a shift in the demand curve to the right.

Question 6

Which of the following events would cause a change in the quantity supplied of some agricultural commodity but would not cause a change in the supply of that same commodity?

Accepted Answer

A change in the price of the commodity would cause a movement along the supply curve, leading to a change in the quantity supplied. However, it would not shift the entire supply curve. The other options - A) a change in factor costs, B) a technological change, D) a change in the number of suppliers of the commodity, and E) a change in the price of substitute goods - would all cause a shift in the supply curve.

Question 7

FIGURE 3-1
-Refer to Figure 3-1.The movement along the demand curve,D,from point v to point x,could be caused by

Accepted Answer

The answer of  FIGURE 3-1
-Refer to Figure 3-1.The movement...

Question 8

Quantity demanded is a flow variable,which means that it must be expressed

Accepted Answer

Quantity demanded is a flow variable, meaning that it is measured over a period of time. Therefore, it must be expressed in units of the good per period of time, which could be per day, per week, per month, per year, etc. Choice E is the best answer as it encompasses all possible time periods.

Question 9

FIGURE 3-1
-Refer to Figure 3-1.If demand is given by the curve D,the ________ energy-efficient light bulbs is  at a price of $9.

Accepted Answer

Quantity demanded refers to the specific amount of a product that consumers are willing and able to purchase at a given price. In this case, the question is asking for the quantity of light bulbs that consumers are willing and able to purchase at a price of $9, given the demand curve D. Therefore, the correct answer is D.

Question 10

Suppose there is a decrease in the quantity supplied of copper at each price.This change would imply

Accepted Answer

A decrease in quantity supplied means that at each price, suppliers are willing to supply less. This will cause a shift to the left of the supply curve, as the entire curve shifts inward toward the origin, reflecting the fact that less is being supplied at each price level.

Question 11

Suppose the demand curves for goods A,B,and C have the following functional forms,where Q denotes quantity demanded,P denotes price,and M denotes income: Q_A = 120 - 3.5P_A - 6P_B + 14M Q_B = 100 - 2P_B + 3P_C + 1.1M Q_C = 1500 - 0.5P_C - 300M. Based on these demand curves,which of the following goods are known to be normal goods?

Accepted Answer

Normal goods are those for which demand increases as income (M) increases. In the given equations, goods A and B have positive coefficients for M (14 for A and 1.1 for B), indicating that demand for these goods increases with income, making them normal goods. Good C has a negative coefficient for M (-300), indicating that demand decreases as income increases, which does not fit the definition of a normal good.

Question 12

The positive slope of a supply curve indicates that

Accepted Answer

A positive slope of a supply curve implies that there is a direct relationship between price and quantity supplied, which means that as the price of a good increases, suppliers will be more willing to supply more of that good, resulting in an increase in quantity supplied.

Question 13

Suppose that the demand curves for goods A,B,and C have the following functional forms:,where Q denotes quantity demanded and P denotes price: Q_A = 120 - 3.5P_A - 6P_B Q_B = 100 - 2P_B + 3P_C Q_C = 1500 - 0.5P_C. Based on these demand curves,which of the following pairs of goods are known to be substitutes?

Accepted Answer

The answer of Suppose that the demand curves for goods...

Question 14

The market supply curve for wooden shipping crates would shift to the right

Accepted Answer

If the prices of inputs fall, it will lower the cost of production for wooden shipping crates, incentivizing suppliers to increase their production. As a result, the market supply curve for wooden shipping crates would shift to the right.

Question 15

FIGURE 3-1 -Refer to Figure 3-1.A shift of the demand curve for energy-efficient light bulbs from D to D² could be caused by

Accepted Answer

The answer of  FIGURE 3-1
-Refer to Figure 3-1.A shift...

Question 16

Suppose the demand curves for goods A,B,and C have the following functional forms,where Q denotes quantity demanded,P denotes price,and M denotes income: Q_A = 120 - 3.5P_A - 6P_B + 14M Q_B= 100 - 2P_B + 3P_C + 1.1M Q_C = 1500 - 0.5P_C - 300M. Based on these demand curves,which of the following goods are known to be inferior goods?

Accepted Answer

A good is considered inferior if its demand decreases as income increases. Looking at the functional forms of the demand curves, we can see that the coefficient of M in the demand equation for good C is negative (-300), indicating that it is an inferior good. The other two demand equations do not have a negative coefficient for M, so we cannot conclude that goods A and B are inferior goods.

Question 17

FIGURE 3-1 -Refer to Figure 3-1.A shift of the demand curve for energy-efficient light bulbs from D to D¹ could be caused by

Accepted Answer

An expectation that government regulation will soon prohibit the use of ordinary light bulbs would increase the demand for energy-efficient light bulbs, shifting the demand curve from D to D¹.

Question 18

Suppose that many coal mines are shut for environmental reasons.This will cause

Accepted Answer

If many coal mines are shut for environmental reasons, the supply of coal would decrease as there are fewer available resources to produce coal. This would cause a leftward shift of the supply curve, indicating a decrease in the quantity of coal supplied at each price level.

Question 19

Suppose that the demand curves for goods A,B,and C have the following functional forms:,where Q denotes quantity demanded and P denotes price: Q_A = 120 - 3.5 P_A - 6P_B Q_B = 100 - 2P_B + 3P_C Q_C = 1500 - 0.5P_C. Based on these demand curves,which of the following pairs of goods are known to be complements?

Accepted Answer

Goods A and B are complements because the coefficient of the price of good B in the demand for good A is negative (-6), which implies an inverse relationship between the quantity demanded of good A and the price of good B. However, there is no complementary relationship between goods B and C or goods A and C, as the coefficients of the prices of these goods in each other's demand functions are positive or zero.

Question 20

The term "quantity supplied" is the amount of a commodity that

Accepted Answer

Quantity supplied refers to the amount of a good that producers are willing and able to sell at a specific price over a certain period of time.

Quiz 3: Demand, Supply, and Price

Economists say there has been a change in demand when there is

A fall in the price of raw milk (which is used in the production of ice cream) will

The term "supply" in a particular market refers to

Which of the following events would result in a change in the quantity demanded for some commodity but NOT a change in the demand for that commodity?

Suppose new medical research suggests that consuming 200 grams of tofu everyday helps to prevent heart disease.Widespread knowledge of this research,other things being equal,is likely to have what impact on the market for tofu?

Which of the following events would cause a change in the quantity supplied of some agricultural commodity but would not cause a change in the supply of that same commodity?

FIGURE 3-1 -Refer to Figure 3-1.The movement along the demand curve,D,from point v to point x,could be caused by

Quantity demanded is a flow variable,which means that it must be expressed

FIGURE 3-1 -Refer to Figure 3-1.If demand is given by the curve D,the ________ energy-efficient light bulbs is at a price of $9.

Suppose there is a decrease in the quantity supplied of copper at each price.This change would imply

The positive slope of a supply curve indicates that

The market supply curve for wooden shipping crates would shift to the right

FIGURE 3-1 -Refer to Figure 3-1.A shift of the demand curve for energy-efficient light bulbs from D to D² could be caused by

FIGURE 3-1 -Refer to Figure 3-1.A shift of the demand curve for energy-efficient light bulbs from D to D¹ could be caused by

Suppose that many coal mines are shut for environmental reasons.This will cause

The term "quantity supplied" is the amount of a commodity that

Quiz 3: Demand, Supply, and Price

Economists say there has been a change in demand when there is

A fall in the price of raw milk (which is used in the production of ice cream) will

The term "supply" in a particular market refers to

Which of the following events would result in a change in the quantity demanded for some commodity but NOT a change in the demand for that commodity?

Suppose new medical research suggests that consuming 200 grams of tofu everyday helps to prevent heart disease.Widespread knowledge of this research,other things being equal,is likely to have what impact on the market for tofu?

Which of the following events would cause a change in the quantity supplied of some agricultural commodity but would not cause a change in the supply of that same commodity?

FIGURE 3-1 -Refer to Figure 3-1.The movement along the demand curve,D,from point v to point x,could be caused by

Quantity demanded is a flow variable,which means that it must be expressed

FIGURE 3-1 -Refer to Figure 3-1.If demand is given by the curve D,the ________ energy-efficient light bulbs is at a price of $9.

Suppose there is a decrease in the quantity supplied of copper at each price.This change would imply

The positive slope of a supply curve indicates that

The market supply curve for wooden shipping crates would shift to the right

FIGURE 3-1 -Refer to Figure 3-1.A shift of the demand curve for energy-efficient light bulbs from D to D2 could be caused by

FIGURE 3-1 -Refer to Figure 3-1.A shift of the demand curve for energy-efficient light bulbs from D to D1 could be caused by

Suppose that many coal mines are shut for environmental reasons.This will cause

The term "quantity supplied" is the amount of a commodity that

FIGURE 3-1 -Refer to Figure 3-1.A shift of the demand curve for energy-efficient light bulbs from D to D² could be caused by

FIGURE 3-1 -Refer to Figure 3-1.A shift of the demand curve for energy-efficient light bulbs from D to D¹ could be caused by