Question 1

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

This statement is true. Quantity supplied is a term used in economics to refer to the amount of a good or service that a firm is willing to supply at a specific price. This amount can vary depending on a range of factors, including the cost of production, the price of inputs, and the level of demand.

Question 2

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 an...

Question 3

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

The answer of If a firm has an incentive to...

Question 4

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

The answer of A decrease in the price of GPS...

Question 5

Danielle Ocean pays for monthly pool maintenance for her home swimming pool.Last week the owner of the pool service informed Danielle that he will have to raise his 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 increase in the price of pool chemicals is a cost increase for the pool maintenance service provider. As a result, the provider may choose to decrease the supply of pool maintenance services or increase the price to maintain their profit margin. In this scenario, the provider is choosing to raise the price, indicating a decrease in the supply of pool maintenance services.

Question 6

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 price of the firm's product is expected to be higher in the future, the firm has an incentive to decrease its supply now so that it can sell its product at a higher price in the future. This is because if the firm were to increase its supply now, the increased supply would lower the price of the product in the present, and the firm would not be able to sell its product for the higher price it expects in the future. So, the firm has an incentive to decrease supply now and increase supply in the future when the price is expected to be higher.

Question 7

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. This means that as the price of watches increases, the quantity of watches supplied by firms also increases. The curve is upward sloping to represent this positive relationship.

Question 8

In October 2005,the U.S.Fish and Wildlife Service banned the importation of beluga caviar,the most prized of caviars,from the Caspian Sea.What happened in the market for caviar in the U.S.?
A) The supply curve shifted to the left.
B) The supply curve shifted to the right.
C) The demand curve shifted to the right.
D) The demand curve shifted to the left.

Accepted Answer

The ban on importing beluga caviar from the Caspian Sea reduced the supply of caviar in the U.S. market, shifting the supply curve to the left. This would cause an increase in price and a decrease in quantity demanded, all else equal. Therefore, the correct answer is A, as there was a shift in the supply curve, not the demand curve.

Question 9

Which of the following would shift the supply curve for MP3 players to the right?
A) an increase in the price of a substitute in production
B) an increase in consumer income (assuming that all MP3 players are normal goods)
C) a decrease in the number of firms that produce MP3 players
D) a decrease in the price of an input used to produce MP3 players

Accepted Answer

A decrease in the price of an input used to produce MP3 players would lower the cost of production and increase the profitability of producing MP3 players. As a result, more firms would enter the market and existing firms would increase their output, shifting the supply curve to the right.

Question 10

Figure 3-2 -Refer to Figure 3-2.An increase in the number of firms in the market would be represented by a movement from A) A to B. B) B to A. C) S₁ to S₂. D) S₂ to S₁.

Accepted Answer

An increase in the number of firms in the market would result in an increase in supply, shifting the supply curve to the right from S1 to S2. This would result in a lower equilibrium price (P2) and a higher equilibrium quantity (Q2) as shown in the diagram. Therefore, the correct choice is C, S1 to S2.

Question 11

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

Accepted Answer

This statement reflects the law of supply, which states that as the price of a product increases, producers will increase the quantity supplied due to the higher profits that can be earned.

Question 12

Figure 3-2 -Refer to Figure 3-2.An increase in the price of substitutes in production would be represented by a movement from A) A to B. B) B to A. C) S₁ to S₂. D) S₂ to S₁.

Accepted Answer

According to the diagram, an increase in the price of substitutes in production would cause a shift in the supply curve from S₂ to S₁. This is because higher substitute prices would lead to higher costs of production, decreasing the profitability of producing the good at any given price level and shifting the supply curve to the left. Therefore, the correct answer is D.

Question 13

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 14

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from A) A to B. B) B to A. C) S₁ to S₂. D) S₂ to S₁.

Accepted Answer

A decrease in the price of the product would shift the demand curve to the right, leading to an increase in quantity demanded. This would result in a movement from point B to point A along the supply curve.

Question 15

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 16

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 17

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

Accepted Answer

A change in supply can be caused by various factors such as changes in input prices, technology, taxes or subsidies, etc. These factors would cause a shift in the entire supply curve either to the left or right, indicating a decrease or increase in supply at every price level.

Question 18

The popularity of digital cameras has enticed large discount stores like Wal-Mart 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 answer of The popularity of digital cameras has enticed...

Question 19

Which of the following is the correct way to describe equilibrium in a market?
A) At equilibrium, demand equals supply.
B) At equilibrium, quantity demanded equals quantity supplied.
C) At equilibrium, market forces no longer apply.
D) At equilibrium, scarcity is eliminated.

Accepted Answer

Equilibrium in a market occurs when the quantity demanded by consumers is exactly equal to the quantity supplied by producers. This is represented graphically by the intersection of the demand and supply curves, where the market clears and there are no excesses or shortages. Therefore, the correct way to describe equilibrium in a market is that at equilibrium, quantity demanded equals quantity supplied.

Question 20

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, ranchers may shift their focus to raising sheep instead, causing an increase in supply of sheep. None of the other choices directly relate to the supply of sheep.

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

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

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

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

A decrease in the price of GPS systems will result in

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

The supply curve for watches

In October 2005,the U.S.Fish and Wildlife Service banned the importation of beluga caviar,the most prized of caviars,from the Caspian Sea.What happened in the market for caviar in the U.S.?

Which of the following would shift the supply curve for MP3 players to the right?

Figure 3-2 -Refer to Figure 3-2.An increase in the number of firms in the market would be represented by a movement from

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

Figure 3-2 -Refer to Figure 3-2.An increase in the price of substitutes in production would be represented by a movement from

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

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from

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

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

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

Which of the following is the correct way to describe equilibrium in a market?

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