Q&A Hero

Q: When the demand curve shifts to the left and all else is held constant, the equilibrium price ________ and the equilibrium quantity ________.a. falls; rises b. rises; falls c. falls; fallsd. rises; risese. falls; remains constant

Q: A decrease in demand is represented by a a. shift of the demand curve to the right. b. movement along the demand curve to the right. c. shift of the demand curve to the left. d. movement along the demand curve to the left. e. shift in the supply curve.

Q: Refer to the accompanying diagram. Which of the following scenarios would explain this change in equilibrium?a. A number of firms left the market.b. A number of buyers entered the market, and a number of firms entered the market.c. The price of a complement of this good increased.d. The price of a substitute of this good increased.e. The price of this good decreased.

Q: If the number of buyers in a market increases from 50 to 100, you would expect the equilibrium price to ________ and the equilibrium quantity to ________, holding all else constant.a. increase; increase b. increase; decrease c. decrease; decreased. decrease; increasee. remain the same; remain the same

Q: In the first few months of 2012, the price of gasoline increased by approximately 15 percent. Because of this increase, we would expect the ________ curve in the market for hybrid cars to ________.a. demand; shift to the right b. demand; make no movement c. supply; shift to the leftd. demand; shift to the lefte. supply; shift to the right

Q: The economists at JET Consulting consider Campbells Soup to be an inferior good. During a recession, when the income in the economy is decreasing, economists at JET Consulting would expect the demand curve for Campbells Soup to ________, causing the equilibrium price to ________ and the equilibrium quantity to ________. a. shift to the left; decrease; decrease b. shift to the left; increase; increase c. shift to the right; decrease; increase d. shift to the right; increase; decrease e. shift to the right; increase; increase

Q: After a new technology is introduced, the price typically falls. What is a possible explanation for this? a. More people purchase the product and more firms produce the product. b. Fewer people purchase the product and fewer firms produce the product. c. More firms produce the product. d. More people purchase the product. e. Fewer people purchase the product.

Q: The latest data from the movie studios reveals that attendance at movies has declined as well as the average ticket price. How could this have possibly happened? a. There was an increase in demand and no change in supply. b. There was a decrease in demand and an increase in supply. c. There was no change in demand and an increase in supply. d. There was a decrease in demand and no change in supply. e. There was no change in demand and a decrease in supply.

Q: Some studies have shown that eating chocolate before a test can increase brain activity, thereby causing students to score higher on exams. When these findings were announced, the price and quantity sold of chocolate increased in college towns. One reason for this could have been that the a. producers increased their supply of chocolate. b. consumers increased their demand for chocolate. c. producers increased their supply of chocolate and consumers increased their demand for chocolate. d. producers decreased their supply of chocolate. e. consumers decreased their demand of chocolate.

Q: The equilibrium price of peanut butter is $5. A study comes out that says the fat in peanut butter is good for the heart. Holding all other factors constant, which of the following scenarios could happen? a. The price of peanut butter increases to $7 because of a supply shift. b. The price of peanut butter decreases to $4 because of a supply shift. c. The price of peanut butter decreases to $4 because of a demand shift. d. The price of peanut butter increases to $7 because of a demand shift. e. The price of peanut butter increases to $7 because of a demand and a supply shift.

Q: When the demand curve shifts to the right and the supply curve is held constant, a. the equilibrium price and quantity decrease. b. the equilibrium price increases and the equilibrium quantity decreases. c. the equilibrium price decreases and the equilibrium quantity increases. d. the equilibrium price and quantity increase. e. one can see a movement along the demand curve.

Q: When the price is ________ the equilibrium price, we would expect there to be a ________, causing the market to put ________ pressure on the price until it went back to the equilibrium price.a. above; surplus; upward b. above; shortage; downward c. below; surplus; upwardd. below; shortage; downwarde. above; surplus; downward

Q: A shortage occurs whenever a. the quantity supplied is greater than the quantity demanded. b. the price is above the equilibrium quantity. c. the quantity supplied is less than the quantity demanded. d. the government places a binding price floor. e. the government places a nonbinding price ceiling.

Q: Refer to the following table to answer the following questions.PriceQuantity DemandedQuantity Supplied$10.0010100$8.0020 80$6.0030 60$4.0040 40$2.0050 20$0.0060 0If the price of this good is $2.00, there would be a ________ of ________ units.a. shortage; 20 b. surplus; 50 c. shortage; 30d. surplus; 30e. surplus; 20

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Q: Refer to the following figure to answer the following questions.According to the accompanying figure, if the price is $10, there is a ________ of ________ units.a. shortage; 15 b. surplus; 15 c. shortage; 30d. surplus; 30e. surplus; 22

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Q: Refer to the following figure to answer the following questions.Which of the quantity (Q) and price (P) combinations in the accompanying figure represents the market at competitive equilibrium?a. (15, $10) b. (15, $6) c. (22, $8)d. (30, $6)e. (30, $10)

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Q: If the price of Gatorade increases, the equilibrium price of Powerade, a substitute good, will ________ because of a shift in ________.a. increase; demand b. increase; supply c. decrease; demandd. decrease; supplye. decrease; demand

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Q: Refer to the accompanying graph. If a tax is placed on a good and all else is held constant, we would assume that the supply curve woulda. shift from S1 to S3. b. remain at S1. c. shift from S1 to S2.d. shift from S2 to S1.e. shift from S2 to S3.

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Q: When the price of ground beef increases and all else is held constant, we would expect the supply of hamburgers to ________, causing the price to ________.a. decrease; increase b. decease; decrease c. stay the same; stay the samed. increase; increasee. increase; decrease

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Q: James specializes in college-level economics tutoring. He knows that during the two weeks before finals he can charge more for an hour of private tutoring. Expecting this price increase, James will a. supply less tutoring now, shifting supply to the left. b. supply more tutoring now, shifting supply to the right. c. supply less tutoring now, shifting supply to the right. d. supply more tutoring now, shifting supply to the left. e. change the price of tutoring without any shift in supply.

Q: 18. Use the accompanying graph to answer the following questions. a. What is the equilibrium price and equilibrium quantity in this market?b. Draw an increase in demand and explain what happens to the equilibrium price and equilibrium quantity.c. This is a special type of supply curve that we call an inelastic supply curve. What special property does it have?

Q: Old Navy stocks more Bermuda shorts during the summer months than in the winter months. The resulting shift in supply explainsa. the change in technology. b. the change in income. c. price expectations.d. the change in input cost.e. the number of firms in a market.

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Q: Firm A notices that Firm B is making a profit by producing footballs. There is nothing stopping Firm A from entering the football market, so it does. Holding all else constant, the number of firms in the market will a. increase, causing demand to increase. b. increase, causing the supply to shift down. c. decrease, causing the supply to decrease. d. decrease, causing the supply to increase. e. increase, causing the supply to increase.

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Q: Which of the following situations would cause the demand curve to shift to the right? a. a decrease in the number of consumers b. a decrease in the number of producers c. an increase in the price of a complement d. an increase in the price of a substitute e. a change in tastes and preferences

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Q: When the number of firms in a market decreases, a. the demand curve shifts to the left. b. the demand curve shifts to the right. c. the supply curve shifts to the right. d. the supply curve shifts to the left. e. both the supply and the demand curves shift to the left.

Q: 14. Use the accompanying graph to answer the questions. a. What is the equilibrium price and equilibrium quantity?b. At the price of $5, is there a shortage or a surplus? What is the amount of this shortage or surplus?c. At the price of $15, is there a shortage or a surplus? What is the amount of this shortage or surplus?

Q: When the government places a tax on a good and all else is held constant, which of the following would most likely happen? a. The overall consumption of the good decreases, assuming the good does not have a vertical demand curve. b. The price the buyer pays for the good decreases, assuming the good does not have a horizontal demand curve. c. The supply curve shifts to the right. d. The government receives no tax revenue if the tax is more than 20 percent. e. The price and quantity adjust back to the competitive market equilibrium point.

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Q: In 1993, the government increased the tax on gasoline producers from 14.1 cents per gallon to 18.4 cents per gallon. Our model of supply and demand predicts that a. the demand for gasoline decreased. b. the supply for gasoline increased. c. the demand for gasoline increased. d. the supply for gasoline decreased. e. both the supply and demand for gasoline decreased.

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Q: On January 30, 2012, Starbucks India announced plans to open 50 cafs. What would you expect to happen to the market for coffee in India, assuming all other factors are held constant? a. The demand for coffee will increase in India. b. The demand for coffee will decrease in India. c. Both the supply and demand for coffee will increase in India. d. The supply for coffee will increase in India. e. The supply for coffee will decrease in India.

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Q: When the government places a tax on the producer of a good or service a. the demand curve for the good or service shifts to the right. b. the demand curve for the good or service shifts to the left. c. the supply curve for the good or service shifts to the right. d. the supply curve for the good or service shifts to the left. e. both the supply and demand curves for the good or service shifts to the left.

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Q: A subsidy a. is a payment made by the government to encourage consumption or production of a good or service. b. is a payment taken by the government to discourage consumption or production of a good or service. c. shifts the demand curve of a product. d. is designed to decrease the available supply of a good or service. e. raises the cost of doing business.

Q: 9. We are given the following supply schedule:PriceQuantity Demanded $0 0 $415 $830 $1245 $1660 a. Graph the information from the supply schedule. Be sure to label everything.b. Now graph the following supply schedule:PriceQuantity Demanded$0 0$410$825$1240$1655c. What happened to the supply curve?d. List five things that could make the supply curve reflect your answer in part c.

Q: Which of the following could cause the supply curve for the market for oranges to shift to the left? a. an increase in the income of consumers of oranges b. a decrease in the cost of workers c. an increase in the price of orange juice d. a new study saying that eating oranges will give one heart disease e. a severe hurricane in Florida

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Q: If a new french frycutting machine works twice as fast as the old machine, McDonalds would a. be willing to produce and sell fewer french fries at every price. b. be making less profit. c. be willing to produce and sell more french fries at every price. d. lose customers. e. pay its employees more.

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Q: An improvement in technology a. is one way to shift the demand curve. b. always increases producers profits. c. allows a producer to decrease output with the same amount of input. d. allows a producer to increase output with the same amount of input. e. shifts the supply curve to the left.

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Q: Which following change in the coffee market would shift the supply curve to the right? a. A study finds that drinking coffee leads to higher grades. b. The wage for employees in the coffee business decreases. c. The income in the economy increases. d. Firms expect the price of coffee to increase in the future. e. Fifty Starbucks coffee shops close down.

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Q: If the price of rubber were to increase by 20 percent over the fiscal year and if all else were held constant, what would we expect to happen to the supply curve of tires that are sold separately from automobiles? a. The supply curve would shift to the right. b. The quantity supplied would increase. c. The supply curve would shift to the left. d. The supply curve would shift down. e. Nothing; the cost of rubber has no impact on the supply of tires.

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Q: If the cost of flour increases from $3 to $5 a bag, we could predict the supply curve for bagels toa. shift to the right. b. shift to the left. c. become steeper.d. become flatter.e. increase.

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Q: Higher input costs a. reduce profits. b. increase profits. c. shift the demand curve. d. always happen during a recession. e. provide an incentive to hire more workers.

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Q: Inputs are a. goods that are used together. b. goods that are used in place of one another. c. goods that one demands more of as ones income increases. d. goods that one demands less of as ones income increases. e. resources that firms use in the production of final goods and services.

Q: A change in quantity supplied a. is represented by a shift in the supply curve. b. is represented by a movement along the supply curve. c. happens only when the price increases. d. happens only when the price decreases. e. is positive if the price of the good decreases.

Q: Which of the following will cause a movement along a goods supply curve? a. The price of an input increases. b. The price of the good increases. c. The production process of the good becomes more efficient. d. More firms enter the market. e. The government places a subsidy on the producer of the good.

Q: SHORT ANSWER1. Compare and contrast the differences between a competitive market and an imperfect market, and give an example of an imperfect market.

Q: Which of the following is both a shift in supply and a shift in demand?a. the number of firms in an industry b. tastes and preferences c. income changesd. expectations of future pricese. the number of buyers

Q: What would happen in the market for SUVs if the government started to subsidize the production of SUVs that get very few miles per gallon and the price of gasoline went up?

Q: The government recently imposed a number of regulations on companies that will make it more expensive for companies to hire workers. What consequence will this have on market? a. These regulations raise the cost of labor and shift supply to the left. b. These regulations raise the cost of labor and shift supply to the right. c. These regulations raise the cost of labor and cause a rightward movement along the supply curve. d. These regulations raise the cost of labor and cause a leftward movement along the supply curve. e. These regulations will not affect the supply curve.

Q: As the owner of a business, Talia has allowed her employees to do their work on one computer screen while watching movies on a second computer screen. She has noticed, however, that her employees are distracted by being able to watch movies while at work. How would an economist describe this situation? a. As people watch movies, they become less productive and efficient and there is a leftward movement along the supply curve. b. As people watch movies, they become less productive and efficient and there is a rightward movement along the supply curve. c. As people watch movies, they become less productive and efficient and there is a rightward shift of the supply curve. d. As people watch movies, they become less productive and efficient and there is a leftward shift of the supply curve. e. As people watch movies, they become less productive and efficient and there is a rightward shift of and movement along the supply curve.

Q: As computers and Internet access have become cheaper, businesses have offered these to employees. What impact would this have on the market for what these businesses sell? a. The technology will lead to a leftward shift of the supply curve. b. The technology will lead to a rightward shift of the supply curve. c. The technology will lead to a leftward shift of the demand curve. d. The technology will lead to a leftward movement along the supply curve. e. There will be no change in supply or quantity supplied.

Q: Roger currently runs a restaurant on a busy street filled with many other restaurants. The local health inspector, however, has plans to shut down many of these restaurants. What impact will the closure of restaurants have? a. There will be an increase in quantity supplied. b. There will be a decrease in quantity supplied. c. There will be an increase in supply. d. There will be a decrease in supply. e. There will be no change in quantity supplied or supply.

Q: When Paul listened to the presidential candidate debates, he heard one candidate proposing to increase taxes and the other candidate responding that this would cause firms to decrease production. How would this be described by an economist? a. As taxes increase, there is a decrease in quantity supplied. b. As taxes increase, there is an increase in quantity supplied. c. As taxes increase, there is an increase in supply. d. As taxes increase, there is a decrease in supply. e. As taxes increase, there is an increase in supply and in quantity supplied.

Q: When the price falls, what happens? a. There is no change in the quantity supplied or supply. b. There is an increase in the supply. c. There is a decrease in the supply. d. There is an increase in the quantity supplied. e. There is a decrease in the quantity supplied.

Q: At the price of $5 per pack of batteries, Duracell sells 10,000 packs of batteries and Energizer sells 15,000 packs of batteries. When the price rises to $7.50, Duracell sells 12,000 packs of batteries and Energizer sells 16,000 packs of batteries. What is the market supply at $7.50?a. 12,000 b. 16,000 c. 4,000d. 28,000e. 25,000

Q: How does the market supply reflect the law of supply? a. As the price increases, each and every seller sells a larger quantity of the product. b. As the price decreases, each and every seller sells a larger quantity of the product. c. As the price increases, each and every seller initially sells a larger quantity of the product but eventually sells less. d. As the price decreases, each and every seller initially sells a larger quantity of the product but eventually sells more. e. The market supply curve does not reflect the law of supply.

Q: What is market supply? a. the subtraction of the individual quantities supplied by each seller in a market at each price b. the addition of the individual prices of the product at each level of quantity c. the multiplication of the price of each product by the individual quantities supplied by each supplier in a market d. the division of the total sales by an individual seller with the price paid for the product e. the addition of the individual quantities supplied by each seller in a market at each price

Q: Assume there are 100 suppliers of widgets in the widget market. Half of these suppliers supply 35 widgets to the market, a quarter of these suppliers supply 40 widgets to the market, and a quarter of these suppliers supply 50 widgets to the market. What is the market supply for widgets?a. 100 b. 125 c. 400d. 4,000e. 1,750

Q: Assume that the market for nachos has only two suppliers: Firm 1 and Firm 2. According to the table below, if the price of nachos is $6, the market will supply ________ nachos.Price of NachosFirm 1u2019s SupplyFirm 2u2019s Supply 0 00$1 10$2 11$3 21$4 42$5 53$6 64$7 74$8105a. 41 b. 6 c. 2d. 4e. 10

Q: Refer to the accompanying figure. When the price changes from P1 to P2, we will see a(n)a. decrease in supply from Q1 to Q2.b. increase in supply from Q2 to Q1.c. decrease in quantity supplied from Q1 to Q2.d. increase in quantity supplied from Q2 to Q1.e. shift of the supply curve.

Q: A supply schedule a. is a curve representing the relationship between the price of a good or service and the quantity supplied. b. is a list of goods and services supplied at different prices. c. is a table representing the relationship between the price of a good or service and the quantity supplied. d. can be used only to analyze individuals supplies for a good or service. e. can be used only to analyze the entire markets supply for a good or service.

Q: The law of supply states that, all other things being equal, a. the quantity supplied falls when the price falls, and the quantity supplied rises when the price rises. b. the quantity supplied falls when the price rises, and the quantity supplied rises when the price falls. c. the supply falls when the price falls, and the demand rises when the price rises. d. the supply falls when the price rises, and the demand rises when the price falls. e. price and quantity are always negatively correlated.