Question 1

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

Accepted Answer

A change in supply can be caused by factors such as technology, input costs, or changes in the number of producers, and results in a shift of the entire supply curve either to the left or right.

Question 2

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

Accepted Answer

A decrease in price would shift the demand curve to the right, resulting in a movement from point B to point A. Points on the supply curve remain the same.

Question 3

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 4

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 5

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

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 6

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

Accepted Answer

According to the law of supply, a higher price often leads to an increase in the quantity supplied as producers are willing and able to supply more at a higher price.

Question 7

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

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

Question 8

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

Accepted Answer

Equilibrium in a market occurs when the quantity demanded by consumers matches the quantity supplied by producers, resulting in no excess supply or demand. This can be represented graphically as the point where the demand and supply curves intersect. Therefore, choice B is the correct statement about equilibrium in a market.

Question 9

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

Accepted Answer

If the firm expects the price of its product to be higher in the future than it is today, it has an incentive to decrease supply now and increase supply in the future. This is because by withholding some of its supply now, the firm can sell it later at a higher price, earning more profit. Therefore, option D is the correct answer.

Question 10

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

Accepted Answer

A decrease in the price of cattle would make raising cattle less profitable for ranchers, leading them to switch to raising sheep. This would cause the supply of sheep to increase. The other answer choices are not directly related to the supply of sheep.

Question 11

A decrease in the price of GPS systems will result in

Accepted Answer

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

Question 12

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 13

The supply curve for watches

Accepted Answer

The supply curve for watches shows the relationship between the price of watches and the quantity of watches supplied. As the price of watches increases, the quantity of watches supplied by firms also increases, leading to a positive slope on the supply curve. Therefore, option D is the correct answer. Option A is incorrect because the supply curve represents the quantity of watches supplied by firms, not the quantity of watches demanded by consumers. Option B is incorrect because the supply curve has a positive slope, not a negative one. Option C is incorrect because it confuses the supply curve with the demand curve.

Question 14

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?

Accepted Answer

The increase in the price of pool chemicals means that it will cost more for the pool maintenance service provider to offer the same level of service. This will most likely cause a decrease in the supply of pool maintenance services as some providers may decide to exit the market or reduce the level of service they provide. Therefore, the owner of the pool service may have to raise their price to compensate for the increase in the cost of providing the service.

Question 15

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

Accepted Answer

A decrease in the price of an input used to produce MP3 players would lower the cost of production for firms, leading to an increase in supply of MP3 players and a shift of the supply curve to the right.

Question 16

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

Accepted Answer

An increase in the price of substitutes in production would reduce the supply of the good, hence shift the supply curve to the left (from S1 to S2). Thus, the correct answer is D.

Question 17

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.?

Accepted Answer

The ban on importation of beluga caviar, which is the most valuable type of caviar, would reduce the supply of caviar in the U.S. market, which would shift the supply curve to the left. This ultimately leads to a rise in caviar prices because of the decrease in supply.

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?

Accepted Answer

The answer of The popularity of digital cameras has enticed...

Question 19

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

Accepted Answer

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

Question 20

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...

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