Question 1

At a product's equilibrium price
A)the product's demand curve is the same as the product's supply curve.
B)the quantity of the product demanded is greater than the quantity of the product supplied.
C)the quantity of the product demanded is less than the quantity of the product supplied.
D)the product's demand curve crosses the product's supply curve.

Accepted Answer

The answer of At a product's equilibrium price
A)the product's demand...

Question 2

Would a change in the price of in-line skates cause a change in the supply of in-line skates? Why or why not?

Accepted Answer

The answer of Would a change in the price of...

Question 3

Figure 3-3 
-Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for an original Picasso painting and the market for designer jeans.Which graph most likely represents which market?
A)Graph B represents the market for an original Picasso painting and Graph A represents the market for designer jeans.
B)Graph A represents the market for an original Picasso painting and Graph B represents the market for designer jeans.
C)Graph A represents both the market for an original Picasso painting and designer jeans.
D)Graph B represents both the market for an original Picasso painting and designer jeans.

Accepted Answer

Graph B shows a steep demand curve and a limited supply curve, which is typical of the market for an original Picasso painting. Graph A shows a more elastic demand curve and a more abundant supply curve, which is typical of the market for designer jeans. Therefore, Graph B represents the market for an original Picasso painting and Graph A represents the market for designer jeans.

Question 4

An increase in quantity supplied is represented by a rightward shift of the supply curve.

Accepted Answer

An increase in quantity supplied is represented by a movement along the supply curve, not by a shift of the supply curve. A rightward shift of the supply curve indicates an increase in supply, not just an increase in quantity supplied.

Question 5

What are the five most important variables that shift the market supply curve?

Accepted Answer

The answer of What are the five most important variables...

Question 6

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 7

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 8

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 9

Figure 3-3 
-Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for original Michelangelo sculptures and the market for Ray Ban sunglasses.Which graph most likely represents which market?
A)Graph B represents the market for original Michelangelo sculptures and Graph A represents the market for Ray Ban sunglasses.
B)Graph A represents the market for original Michelangelo sculptures and Graph B represents the market for Ray Ban sunglasses.
C)Graph A represents both the market for original Michelangelo sculptures and Ray Ban sunglasses.
D)Graph B represents both the market for original Michelangelo sculptures and Ray Ban sunglasses.

Accepted Answer

Graph B, likely representing the market for original Michelangelo sculptures, shows a vertical supply curve, indicating a perfectly inelastic supply, which makes sense because the number of original sculptures is fixed and cannot increase. Graph A, likely representing the market for Ray Ban sunglasses, shows a more traditional supply and demand curve, indicating that both supply and demand can change over time, which is typical for mass-produced goods like sunglasses.

Question 10

Use the following supply schedule for cherries to draw a graph of the supply curve.Be sure to label the supply curve and each axis,and show each point on the supply curve.
 $$\begin{array} { | c | c | } 
\hline \begin{array} { l } 
\text { Price (dollars } \
\text { per bushel) }
\end{array} & \begin{array} { l } 
\text { Quantity (thousands } \
\text {of bushels) }
\end{array} \
\hline 8 & 50 \
\hline 16 & 100 \
\hline 24 & 150 \
\hline 32 & 200 \
\hline 40 & 250 \
\hline
\end{array}$$

Accepted Answer

The answer of Use the following supply schedule for cherries...

Question 11

What is the difference between a supply schedule and a supply curve?

Accepted Answer

The answer of What is the difference between a supply...

Question 12

All else equal,as the price of a product falls,the quantity supplied decreases.

Accepted Answer

According to the law of supply, there is a direct relationship between price and quantity supplied, meaning that as the price of a product falls, sellers are less willing to supply it, leading to a decrease in the quantity supplied.

Question 13

A positive technological change will cause the quantity of a good supplied to increase.

Accepted Answer

The answer of A positive technological change will cause the...

Question 14

In 2004,hurricanes damaged a large portion of Florida's orange crop.As a result of this,many orange growers were not able to supply fruit to the market.If,following the hurricane,the price remained at its pre-hurricane level,we would expect to see
A)a surplus of oranges.
B)the quantity demanded equal to the quantity supplied.
C)a shortage of oranges.
D)an increase in the demand for oranges.

Accepted Answer

Due to the damage caused by hurricanes, the supply of oranges decreased. However, if the price remained the same, there would be no incentive for consumers to decrease their demand for oranges. Therefore, the quantity demanded would exceed the quantity supplied, creating a shortage of oranges.

Question 15

Use the following supply schedule for cherries to draw a graph of the supply curve.Be sure to label the supply curve and each axis,and show each point on the supply curve.
 $$\begin{array} { | c | c | } 
\hline \begin{array} { l } 
\text { Price (dollars } \
\text { per bushel) }
\end{array} & \begin{array} { l } 
\text { Quantity (thousands } \
\text { of bushels) }
\end{array} \
\hline 4 & 25 \
\hline 8 & 50 \
\hline 12 & 75 \
\hline 16 & 100 \
\hline 20 & 125 \
\hline
\end{array}$$

Accepted Answer

The answer of Use the following supply schedule for cherries...

Question 16

Explain the differences between a change in supply and a change in quantity supplied.

Accepted Answer

The answer of Explain the differences between a change in...

Question 17

Figure 3-4 
-Refer to Figure 3-4.If the price is $10
A)there would be a surplus of 600 units.
B)there would be a shortage of 600 units.
C)there would be a surplus of 200 units.
D)there would be a shortage of 200 units.

Accepted Answer

At a price of $10, the quantity demanded would be 400 units, while the quantity supplied would be 1000 units. This creates a shortage of 600 units (demand exceeds supply).

Question 18

A decrease in the price of inputs will cause the supply curve for a product to shift to the right.

Accepted Answer

If the price of inputs decreases, it becomes less expensive for producers to create the product, which increases the profitability of producing the product. This leads to an increase in the supply of the product, causing the supply curve to shift to the right.

Question 19

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 price of an input
b.An increase in productivity
c.An increase in the price of a substitute in production
d.A decrease in the expected future price of a product
e.A decrease in the current price of the product

Accepted Answer

The answer of Indicate whether each of the following situations...

Question 20

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 quantity demanded is equal to quantity supplied. At this point, there is no surplus or shortage of the product or service, and the market is stable. The other options are incorrect: A is incorrect as demand can equal supply at any point, not just at equilibrium, C is incorrect as market forces are always present and affect the market, and D is incorrect as scarcity is a fundamental economic concept that cannot be completely eliminated.

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

At a product's equilibrium price

Would a change in the price of in-line skates cause a change in the supply of in-line skates? Why or why not?

Figure 3-3 -Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for an original Picasso painting and the market for designer jeans.Which graph most likely represents which market?

An increase in quantity supplied is represented by a rightward shift of the supply curve.

What are the five most important variables that shift the market supply curve?

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

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

Figure 3-3 -Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for original Michelangelo sculptures and the market for Ray Ban sunglasses.Which graph most likely represents which market?

What is the difference between a supply schedule and a supply curve?

All else equal,as the price of a product falls,the quantity supplied decreases.

A positive technological change will cause the quantity of a good supplied to increase.

In 2004,hurricanes damaged a large portion of Florida's orange crop.As a result of this,many orange growers were not able to supply fruit to the market.If,following the hurricane,the price remained at its pre-hurricane level,we would expect to see

Explain the differences between a change in supply and a change in quantity supplied.

Figure 3-4 -Refer to Figure 3-4.If the price is $10

A decrease in the price of inputs will cause the supply curve for a product to shift to the right.

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