Question 1

If the demand for bicycles increases,

Accepted Answer

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Question 2

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

Accepted Answer

A decrease in the price of materials used to make CDs would lower production costs for suppliers, leading to an increase in the quantity of CDs supplied at any given price. This would shift the supply curve for CDs to the right.

Question 3

An increase in supply will cause a(n)

Accepted Answer

An increase in supply will lead to lower prices, which will in turn increase the quantity demanded. However, it will not necessarily increase the overall demand for the product.

Question 4

A new hormone will increase the amount of milk each cow produces.If this hormone is adopted by many dairies,what will be the effect on the milk market?

Accepted Answer

The hormone will increase the supply of milk, causing the supply curve to shift to the right. This will lead to a lower equilibrium price due to the increase in quantity supplied. However, the equilibrium quantity will increase due to the increase in supply. Therefore, the correct answer is C.

Question 5

The market for chewing gum is competitive with a current price of 50 cents per pack and a quantity of 100,000 packs per day.Which of the following events would lead to a new equilibrium price of 75 cents and a new equilibrium quantity of 125,000?

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Question 6

A rightward shift of a supply curve

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Question 7

An increase in supply will cause equilibrium price to __________ and equilibrium quantity to __________.

Accepted Answer

An increase in supply will cause an excess supply, which will result in a decrease in price and an increase in quantity demanded to reach a new equilibrium. Therefore, the correct answer is C, decrease in equilibrium price and increase in equilibrium quantity.

Question 8

A decrease in the supply of chocolate chips would usually result in a

Accepted Answer

A decrease in supply would shift the supply curve to the left, causing a higher equilibrium price and a lower equilibrium quantity. This is because there are fewer chocolate chips available, so consumers will have to pay more to get them, and suppliers will only produce a lower quantity at the higher price.

Question 9

Exhibit 4-4 
-Refer to Exhibit 4-4.Which of the following would cause a shift of demand from D' to D?

Accepted Answer

A decline in consumers' incomes would cause a shift in demand from D' to D for a normal good, as consumers would be less able or willing to purchase the good at the same price.

Question 10

What is the effect of a reduction in the price of steel on the equilibrium price and quantity of automobiles?

Accepted Answer

A reduction in the price of steel would decrease the cost of production for automobiles, which would shift the supply curve to the right. As a result, the equilibrium price would fall, and the equilibrium quantity would rise.

Question 11

If the tea harvest is bad in a particular year,the supply of tea will

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Question 12

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes.If these attempts are successful,what will happen to the equilibrium price and quantity of potatoes?

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Question 13

The market for chewing gum is competitive with a current price of 50 cents per pack and quantity of 100,000 packs.Which of the following events would lead to a new equilibrium price of 40 cents and quantity of 80,000 packs?

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Question 14

Which of the following would cause both the equilibrium price and equilibrium quantity of cookies to decrease?

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Question 15

What is the effect of a decrease in the price of potato chips on the market for pretzels?

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Question 16

Exhibit 4-4 
-In Exhibit 4-4,which of the following could not cause the shift from D to D'?

Accepted Answer

If the price of the good in question decreases, it would result in a movement along the demand curve from D to D'. The other options listed in the question could cause a shift of the demand curve to a new position (D') rather than a movement along the same demand curve.

Question 17

For a given supply curve,an increase in demand will typically

Accepted Answer

An increase in demand will shift the demand curve to the right, resulting in an increase in both quantity and price. This assumes that the supply curve remains constant.

Question 18

If the tea harvest is bad in a particular year,what will happen in the market for coffee?

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Question 19

A decrease in supply will cause a(n)

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Question 20

Exhibit 4-4 
-Refer to Exhibit 4-4.A shift from demand curve D to D' illustrates a(n)

Accepted Answer

A shift from D to D' indicates that for each price level, consumers are willing to buy a greater quantity of the good than before. This suggests an increase in demand for the good.

Quiz 4: Demand, supply, and Markets