Question 1

A technological advancement for Good A will shift the ________ curve of Good A to the ________,making the equilibrium price ________.

Accepted Answer

A technological advancement in the production of Good A would make its production more efficient, leading to an increase in supply. This shift in the supply curve to the right typically results in a lower equilibrium price, as more of the good can be produced at each price level.

Question 2

Refer to the accompanying figure.What event would cause the supply curve to shift out?

Accepted Answer

The answer of Refer to the accompanying figure.What event would...

Question 3

The difference between a tax and a subsidy is that when the government places a tax on a good,it ________ the equilibrium price and ________ the equilibrium quantity,whereas when the government places a subsidy on a good,it ________ the equilibrium price and ________ the equilibrium quantity.

Accepted Answer

A tax on a good typically increases the equilibrium price (as the cost of production or selling price for consumers increases) and decreases the equilibrium quantity (as higher prices lead to lower demand). Conversely, a subsidy decreases the equilibrium price (by making it cheaper to produce or buy) and increases the equilibrium quantity (as lower prices boost demand).

Question 4

When the demand curve shifts to the left and all else is held constant,the equilibrium price ________ and the equilibrium quantity ________.

Accepted Answer

When the demand curve shifts to the left, it indicates a decrease in demand. This leads to a lower equilibrium price and a lower equilibrium quantity, as suppliers will reduce prices to sell their now less demanded products, and the quantity sold will also decrease due to the lower demand.

Question 5

The market for footballs is perfectly competitive.If all else is held constant and the price of leather decreases,we would expect that the equilibrium quantity of footballs would ________ and the equilibrium price would ________.

Accepted Answer

A decrease in the price of leather, a key input in the production of footballs, would lead to a decrease in production costs for football manufacturers. This would cause an increase in the supply of footballs, leading to a rightward shift of the supply curve. As a result, the equilibrium quantity of footballs would increase, while the equilibrium price would decrease. Therefore, the best choice is B.

Question 6

If the number of buyers in a market increases from 50 to 100,you would expect the equilibrium price to ________ and the equilibrium quantity to ________,holding all else constant.

Accepted Answer

When the number of buyers in a market increases, demand for the product typically increases, leading to a higher equilibrium price and a higher equilibrium quantity, assuming all other factors remain constant.

Question 7

When a hurricane rips through Florida,the price of oranges rises because the

Accepted Answer

A hurricane can damage or destroy orange groves, leading to a decrease in supply, or a shift of the supply curve to the left. This causes the price of oranges to rise because there are fewer oranges available in the market.

Question 8

If all else is held constant,what would happen to the equilibrium price and quantity of iPhones if the price of an Android phone decreased?

Accepted Answer

A decrease in the price of Android phones, which are substitutes for iPhones, would lead to a decrease in the demand for iPhones. This would result in a lower equilibrium price and quantity for iPhones as consumers switch to the more affordable Android options.

Question 9

Assume that the market for baseballs is in equilibrium.There is a sudden decrease in income throughout the economy.If all else is held constant,we would expect that if baseballs are a(n)________ good,then the demand curve will shift to the ________,causing the equilibrium price and quantity to ________.

Accepted Answer

If baseballs are considered a normal good, a decrease in income would lead to a decrease in demand for baseballs. This is represented by a leftward shift of the demand curve. As a result, both the equilibrium price and quantity of baseballs would fall.

Question 10

When firms in a market expect the price of their products to rise,the supply curve of their goods ________,causing the equilibrium price to ________.

Accepted Answer

When firms expect prices to rise in the future, they may hold back supply now to sell later at higher prices, causing the current supply curve to decrease and the equilibrium price to rise.

Question 11

What would happen to the equilibrium price and quantity of shirts if the price of cotton decreases and all else is held constant?

Accepted Answer

A decrease in the price of cotton, a key input in shirt production, would lower production costs for manufacturers. This would likely lead to an increase in supply, causing the equilibrium price to fall and the equilibrium quantity to rise as more shirts are produced and sold at a lower price.

Question 12

Sabrina decided to start selling lemonade on her street.The other kids in the neighborhood noticed that Sabrina was making a lot of money selling lemonade.These kids decided to open their own lemonade stand.When they opened their own lemonade stand,the equilibrium price ________ and the equilibrium quantity ________.

Accepted Answer

When more sellers enter the market (in this case, more lemonade stands), the supply increases, leading to a shift in the supply curve to the right. This causes a decrease in the equilibrium price and an increase in the equilibrium quantity. Therefore, choice B is the most logical.

Question 13

A decrease in demand is represented by a

Accepted Answer

A decrease in demand means that consumers are willing to buy fewer units of a good or service at any given price. This is represented by a shift of the entire demand curve to the left, as the quantity demanded decreases at every price level. A movement along the demand curve (either to the right or left) would only occur if there was a change in the price of the good or service, not a change in demand.

Question 14

Refer to the accompanying diagram.Which of the following scenarios would explain this change in equilibrium?

Accepted Answer

An increase in the price of a substitute good would cause consumers to switch to the original good, leading to an increase in demand and an increase in equilibrium price and quantity.

Question 15

According to the supply and demand model,when the cotton gin was invented,if all else was held constant,we would expect the equilibrium price of cotton to ________ and the equilibrium quantity of cotton to ________.

Accepted Answer

The invention of the cotton gin increased the productivity of cotton production, making it easier and faster to remove seeds from cotton. This means that the supply of cotton would increase, shifting the supply curve rightward. As a result, the equilibrium price of cotton would decrease, and the equilibrium quantity of cotton would increase.

Question 16

When supply shifts to the right and demand stays constant,the equilibrium price ________ and the equilibrium quantity ________.

Accepted Answer

When supply increases (shifts to the right) and demand stays constant, the equilibrium price decreases due to the higher availability of the product, and the equilibrium quantity increases because more of the product is available at a lower price.

Question 17

Taxes cause the equilibrium price of a good to

Accepted Answer

Taxes increase the cost of production for producers, causing a shift in the supply curve to the left. This leads to a decrease in the quantity supplied, and an increase in price, which is the new equilibrium point. Therefore, the equilibrium price of a good increases as a result of taxes.

Question 18

Oil is a main component in the manufacture of plastic bags.If the price of oil were to increase,the price of plastics bags would ________ and the quantity would ________.

Accepted Answer

Since oil is a main component in the manufacture of plastic bags, an increase in the price of oil would lead to an increase in the cost of producing plastic bags. This increase in production cost would lead to an increase in the price of plastic bags as well. As a result, consumers would likely purchase fewer plastic bags, and the quantity of plastic bags sold would decrease. Therefore, the correct answer is B.

Question 19

Wine and cheese are complement goods because they are consumed together.What would we expect to happen to the equilibrium quantity of cheese if the price of wine increased and all else is held constant?

Accepted Answer

Since wine and cheese are complementary goods, an increase in the price of wine would lead to a decrease in demand for wine. As a result, the demand for cheese would decrease as well, causing a decrease in the equilibrium quantity of cheese. Therefore, the best answer is E.

Question 20

The equilibrium price of teddy bears is $5.A study comes out that says owning a teddy bear causes you to earn a lower salary.If all other factors are held constant,which of the following scenarios could happen?

Accepted Answer

The study suggesting a negative outcome from owning teddy bears would likely decrease consumer demand, leading to a decrease in price due to a shift in the demand curve, not the supply curve.

Quiz 3: The Market at Work: Supply and Demand

A technological advancement for Good A will shift the curve of Good A to the ,making the equilibrium price .

Refer to the accompanying figure.What event would cause the supply curve to shift out?

The difference between a tax and a subsidy is that when the government places a tax on a good,it the equilibrium price and the equilibrium quantity,whereas when the government places a subsidy on a good,it the equilibrium price and the equilibrium quantity.

When the demand curve shifts to the left and all else is held constant,the equilibrium price and the equilibrium quantity .

The market for footballs is perfectly competitive.If all else is held constant and the price of leather decreases,we would expect that the equilibrium quantity of footballs would and the equilibrium price would .

If the number of buyers in a market increases from 50 to 100,you would expect the equilibrium price to and the equilibrium quantity to ,holding all else constant.

When a hurricane rips through Florida,the price of oranges rises because the

If all else is held constant,what would happen to the equilibrium price and quantity of iPhones if the price of an Android phone decreased?

Assume that the market for baseballs is in equilibrium.There is a sudden decrease in income throughout the economy.If all else is held constant,we would expect that if baseballs are a(n) good,then the demand curve will shift to the ,causing the equilibrium price and quantity to .

When firms in a market expect the price of their products to rise,the supply curve of their goods ,causing the equilibrium price to .

What would happen to the equilibrium price and quantity of shirts if the price of cotton decreases and all else is held constant?

A decrease in demand is represented by a

Refer to the accompanying diagram.Which of the following scenarios would explain this change in equilibrium?

According to the supply and demand model,when the cotton gin was invented,if all else was held constant,we would expect the equilibrium price of cotton to and the equilibrium quantity of cotton to .

When supply shifts to the right and demand stays constant,the equilibrium price and the equilibrium quantity .

Taxes cause the equilibrium price of a good to

Oil is a main component in the manufacture of plastic bags.If the price of oil were to increase,the price of plastics bags would and the quantity would .

Wine and cheese are complement goods because they are consumed together.What would we expect to happen to the equilibrium quantity of cheese if the price of wine increased and all else is held constant?

The equilibrium price of teddy bears is $5.A study comes out that says owning a teddy bear causes you to earn a lower salary.If all other factors are held constant,which of the following scenarios could happen?