Question 1

If iPods and iTunes are complements, then a decrease in the price of iPods will result in a decrease in the demand for iTunes.

Accepted Answer

If iPods and iTunes are complements, a decrease in the price of iPods would likely lead to an increase in their demand, which would then result in an increase in the demand for iTunes as well (since more people would be purchasing iPods and needing to download and manage music). Therefore, a decrease in the price of iPods would not result in a decrease in the demand for iTunes.

Question 2

The change in the price of a good leads to a change in ________, which leads to a ________.

Accepted Answer

The change in the price of a good leads to a change in the quantity supplied, not the supply itself. This results in a movement along the supply curve, not a shift of the supply curve. A shift in the supply curve would be caused by factors other than the price of the good itself, such as changes in production costs or technology.

Question 3

If the price of chili increases, there will be ________ of chili cheese fries.

Accepted Answer

An increase in the price of chili, an ingredient for chili cheese fries, would likely lead to a decrease in the supply of chili cheese fries because it becomes more costly to produce them.

Question 4

A frozen food manufacturer can produce either pizzas or calzones. As the result of an increase in the price of calzones, the firm produces more calzones and fewer pizzas. An economist would explain this by saying

Accepted Answer

The answer of A frozen food manufacturer can produce either...

Question 5

Refer to the information provided in Figure 3.11 below to answer the questions that follow.  Figure 3.11
-Refer to Figure 3.11. Assume hamburgers are a normal good. An increase in income will cause a movement from

Accepted Answer

An increase in income will cause a rightward shift of the demand curve from D1 to D2, indicating an increase in quantity demanded at each price level. This is because hamburgers are assumed to be a normal good, meaning that as income increases, demand for hamburgers increases. Therefore, the correct answer is C, which shows the shift in the demand curve.

Question 6

Refer to the information provided in Figure 3.16 below to answer the questions that follow.  Figure 3.16
-Refer to Figure 3.16. The supply curve for hula hoops shifts from S0 to S1. This could be caused by

Accepted Answer

The answer of Refer to the information provided in Figure...

Question 7

Refer to the information provided in Figure 3.14 below to answer the following questions.  Figure 3.14
-Refer to Figure 3.14. A decrease in the wage rate of pizza makers will cause a movement from Point B on supply curve S2 to

Accepted Answer

A decrease in the wage rate of pizza makers reduces production costs, leading to an increase in supply, which shifts the supply curve to the right from S2 to S3.

Question 8

Refer to the information provided in Figure 3.14 below to answer the following questions.  Figure 3.14
-Refer to Figure 3.14. A movement from Point A to Point B on supply curve S2 would be caused by a(n)

Accepted Answer

The answer of Refer to the information provided in Figure...

Question 9

Refer to the information provided in Figure 3.14 below to answer the following questions.  Figure 3.14
-Refer to Figure 3.14. A decrease in quantity supplied is represented by a movement from

Accepted Answer

A decrease in quantity supplied occurs when producers are willing to supply less of a good or service at a given price. This is represented by a movement along the supply curve. In Figure 3.14, the movement from Point B to Point C along supply curve S2 represents a decrease in quantity supplied since the quantity supplied is lower at the higher price of P2. Therefore, the correct answer is D.

Question 10

The price of hard drives used in the manufacturing of laptop computers has risen. This will lead to ________ laptop computers.

Accepted Answer

When the price of an input used in production (in this case, hard drives used in manufacturing laptops) rises, it becomes more expensive for manufacturers to produce laptops. As a result, they will decrease the quantity of laptops they supply to the market, leading to a decrease in the supply of laptop computers.

Question 11

Refer to the information provided in Figure 3.14 below to answer the following questions.  Figure 3.14
-Refer to Figure 3.14. An increase in supply is represented by the movement from

Accepted Answer

An increase in supply means that producers are willing and able to supply more of the good or service at all possible prices. This is represented by a shift of the supply curve to the right. In Figure 3.14, the movement from S2 to S3 shows an increase in supply, as at any given price level, there is now a greater quantity of the product supplied. Therefore, A) S2 to S3 is the correct choice.

Question 12

Refer to the information provided in Figure 3.15 below to answer the following questions.  Figure 3.15
-Refer to Figure 3.15. An increase in quantity supplied is represented by a movement from

Accepted Answer

The answer of Refer to the information provided in Figure...

Question 13

Refer to the information provided in Figure 3.15 below to answer the following questions.  Figure 3.15
-Refer to Figure 3.15. An increase in the wage rate of gardenburger makers will cause a movement from Point B on supply curve S2 to

Accepted Answer

The answer of Refer to the information provided in Figure...

Question 14

According to the law of supply, there is a

Accepted Answer

The law of supply states that there is a positive relationship between the price of a good and the quantity supplied of that good. As the price of a good increases, the quantity supplied of that good also increases, and vice versa. This is because suppliers will want to produce and sell more of a good at a higher price, as they will be able to earn more revenue and profits. Therefore, choice (B) is the correct answer.

Question 15

Refer to the information provided in Figure 3.11 below to answer the questions that follow.  Figure 3.11
-Refer to Figure 3.11. Assume hamburgers and hot dogs are substitutes. A decrease in the price of hot dogs will cause a movement from

Accepted Answer

The answer of Refer to the information provided in Figure...

Question 16

Refer to the information provided in Figure 3.14 below to answer the following questions.  Figure 3.14
-Refer to Figure 3.14. An increase in the price of pizza sauce will cause a movement from Point B on supply curve S2 to

Accepted Answer

An increase in the price of pizza sauce will cause an increase in the cost of producing pizza, which in turn will result in a decrease in supply. This means that the supply curve will shift to the left, from S2 to S1. Therefore, the correct answer is B.

Question 17

Refer to the information provided in Figure 3.15 below to answer the following questions.  Figure 3.15
-Refer to Figure 3.15. A decrease in supply is represented by the movement from

Accepted Answer

A decrease in supply is represented by a shift of the supply curve to the left, which is from S2 to S1. Movement along the same supply curve (Points B to A or B to C) represents a change in quantity supplied due to a change in price, not a change in supply.

Question 18

Refer to the information provided in Figure 3.15 below to answer the following questions.  Figure 3.15
-Refer to Figure 3.15. A movement from Point C to Point B on supply curve S2 would be caused by a(n)

Accepted Answer

A movement along the supply curve from Point C to Point B indicates an increase in the quantity supplied due to an increase in demand, which raises the price and quantity.

Question 19

Inferior goods are always substandard.

Accepted Answer

Inferior goods are not necessarily substandard in quality, but they are goods for which demand decreases as income increases. This is in contrast to normal goods, for which demand increases as income increases.

Question 20

Refer to the information provided in Figure 3.15 below to answer the following questions.  Figure 3.15
-Refer to Figure 3.15. A decrease in the price of mushrooms (an input for gardenburgers) will cause a movement from Point B on supply curve S2 to

Accepted Answer

A decrease in the price of an input like mushrooms reduces production costs, leading to an increase in supply, which shifts the supply curve to the right from S2 to S3.

Quiz 3: Demand, Supply, and Market Equilibrium

If iPods and iTunes are complements, then a decrease in the price of iPods will result in a decrease in the demand for iTunes.

The change in the price of a good leads to a change in , which leads to a .

If the price of chili increases, there will be ________ of chili cheese fries.

A frozen food manufacturer can produce either pizzas or calzones. As the result of an increase in the price of calzones, the firm produces more calzones and fewer pizzas. An economist would explain this by saying

Refer to the information provided in Figure 3.11 below to answer the questions that follow. Figure 3.11 -Refer to Figure 3.11. Assume hamburgers are a normal good. An increase in income will cause a movement from

Refer to the information provided in Figure 3.16 below to answer the questions that follow. Figure 3.16 -Refer to Figure 3.16. The supply curve for hula hoops shifts from S0 to S1. This could be caused by

Refer to the information provided in Figure 3.14 below to answer the following questions. Figure 3.14 -Refer to Figure 3.14. A decrease in the wage rate of pizza makers will cause a movement from Point B on supply curve S2 to

Refer to the information provided in Figure 3.14 below to answer the following questions. Figure 3.14 -Refer to Figure 3.14. A movement from Point A to Point B on supply curve S2 would be caused by a(n)

Refer to the information provided in Figure 3.14 below to answer the following questions. Figure 3.14 -Refer to Figure 3.14. A decrease in quantity supplied is represented by a movement from

The price of hard drives used in the manufacturing of laptop computers has risen. This will lead to ________ laptop computers.

Refer to the information provided in Figure 3.14 below to answer the following questions. Figure 3.14 -Refer to Figure 3.14. An increase in supply is represented by the movement from

Refer to the information provided in Figure 3.15 below to answer the following questions. Figure 3.15 -Refer to Figure 3.15. An increase in quantity supplied is represented by a movement from

Refer to the information provided in Figure 3.15 below to answer the following questions. Figure 3.15 -Refer to Figure 3.15. An increase in the wage rate of gardenburger makers will cause a movement from Point B on supply curve S2 to

According to the law of supply, there is a

Refer to the information provided in Figure 3.11 below to answer the questions that follow. Figure 3.11 -Refer to Figure 3.11. Assume hamburgers and hot dogs are substitutes. A decrease in the price of hot dogs will cause a movement from

Refer to the information provided in Figure 3.14 below to answer the following questions. Figure 3.14 -Refer to Figure 3.14. An increase in the price of pizza sauce will cause a movement from Point B on supply curve S2 to

Refer to the information provided in Figure 3.15 below to answer the following questions. Figure 3.15 -Refer to Figure 3.15. A decrease in supply is represented by the movement from

Refer to the information provided in Figure 3.15 below to answer the following questions. Figure 3.15 -Refer to Figure 3.15. A movement from Point C to Point B on supply curve S2 would be caused by a(n)

Inferior goods are always substandard.

Refer to the information provided in Figure 3.15 below to answer the following questions. Figure 3.15 -Refer to Figure 3.15. A decrease in the price of mushrooms (an input for gardenburgers) will cause a movement from Point B on supply curve S2 to