Exam 3: Supply and Demand

If the price of corn is rises, we would expect: A.the quantity of corn demanded to rise. B.the quantity of corn supplied to rise. C.the demand for corn to shift inward. D.the supply of corn to shift outward.

Figure: The DVD Rental Market (Figure: The DVD Rental Market) Look at the figure The DVD Rental Market.At a rental price of $6, there will be: A.equilibrium in the rental market for DVDs. B.a decrease in demand. C.an excess supply of 20 DVD rentals. D.an excess demand of 20 DVD rentals.

When the price of armchairs increases, the: A.quantity supplied increases. B.supply increases. C.quantity supplied decreases. D.supply decreases.

Which of the following will not cause an increase in demand for good X?

Raclette is a popular wintertime dish in Switzerland.It is essentially melted Raclette cheese over boiled new potatoes.If the price of Raclette cheese decreased, we would expect to see: A.an increase in demand for Raclette cheese. B.an increase in demand for new potatoes. C.no effect on the demand for either of the Raclette ingredients, since this is a traditional dish and its consumption does not depend on the prices of the ingredients. D.an increase in demand for Raclette cheese and for new potatoes.

A decrease in the price of eggs will result in: A.an increase in the demand for eggs. B.an increase in the supply of eggs. C.an increase in the quantity of eggs supplied. D.an increase in the quantity of eggs demanded.

The law of demand states that other things equal: A.as the price increases, the quantity demanded will increase. B.as the price decreases, the demand curve will shift to the right. C.as the price increases, the demand will decrease. D.as the price increases, the quantity demanded will decrease.

The demand curve for videos has shifted to the right.What could have caused it?

Figure: Shifts in Demand and Supply (Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and Supply.The graph shows how supply and demand might shift in response to specific events.Suppose a new machine is developed that allows restaurants and fast-food outlets to produce french fries at a lower cost.Which panel best describes how this will affect the market for french fries? A.panel A B.panel B C.panel C D.panel D

Which of the following will not cause an increase in the supply of cornflakes in the short run? A.an increase in the price of cornflakes B.a cost-saving improvement in the technology of corn production C.a reduction in the price of corn D.the expectation by producers that the price of cornflakes will fall in the future

The price of microchips used to produce computers falls.As a result, the equilibrium price of computers ________ and the equilibrium quantity _. A.rises; increases B.rises; decreases C.falls; decreases D.falls; increases

An increase in the price of sugar (an ingredient for soft drinks) and an increased concern about tooth decay caused by the consumption of soft drinks will result in which of the following in the soft drink market? A.There will be an increase in both the equilibrium price and quantity. B.Equilibrium quantity will decrease, but equilibrium price may decrease, increase, or stay the same. C.There will be a decrease in both equilibrium price and quantity. D.Equilibrium quantity will increase, but equilibrium price may decrease, increase, or stay the same.

An increase in the price and an ambiguous change in quantity is most likely caused by: A.a shift to the left in demand and no shift in supply. B.a shift to the left in supply and no shift in demand. C.a shift to the right in supply and a shift to the left in demand. D.a shift to the left in supply and a shift to the right in demand.

Market equilibrium occurs when: A.there is no incentive for prices to change in the market. B.quantity demanded equals quantity supplied. C.the market clears. D.there is no incentive for prices to change in the market, quantity demanded equals quantity supplied, and the market clears.

Suppose the supply curve for soap bubbles has a slope of +1 and intersects the vertical axis at a price of $2 per bottle.Interpret the meaning of both the y-intercept and the slope.

The horizontal summation of individual demand curves for a particular product, holding the quantity demanded constant, is referred to as: A.market demand. B.market supply. C.complements in production. D.substitutes in production.

Alice goes to the local supermarket to purchase one package of her favorite taco shells.She often pays $1.50 for a package, but she finds they are on sale for $1 each.According to the law of demand, one can expect Alice to: A.purchase an alternative good. B.purchase more than one package of taco shells. C.decide not to purchase taco shells on this visit. D.buy only one package of taco shells.

A recent news story reported that OPEC is expected to decrease the supply of oil next summer.Summer is traditionally a time of increased demand for oil because of the many families driving and flying to vacation sites.What would be the combined effect of these two events on the summer market for gasoline? A.an increase in the price and the quantity B.an increase in the price and an unpredictable change in the quantity C.an unpredictable change in both the price and the quantity D.an unpredictable change in the price and a decrease in the quantity

Figure: The Demand and Supply of Wheat (Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply of Wheat.A temporary price of $4 in this market would result in: A.a surplus of 4,000 bushels. B.a shortage of 2,000 bushels. C.a shortage of 4,000 bushels. D.a surplus of 2,000 bushels.

Figure: The Demand and Supply of Wheat (Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply of Wheat.What is the equilibrium quantity in this wheat market? A.12,000 bushels B.2,000 bushels C.10,000 bushels D.6,000 bushels