Deck 3: The Market at Work: Supply and Demand

Question 1

If the price of a good increases,holding all else constant,

A) the demand for all of that good's substitutes will decrease.
B) the quantity demanded for that good will increase.
C) the demand for all of that good's complements will increase.
D) the demand for all of that good's substitutes will increase.
E) the demand curve will shift to the left.

Answer 1

the demand for all of that good's substitutes will increase.

Question 2

For a market to be competitive:

A) each buyer and seller is small, relative to the whole market; no single decision-maker has any influence over the market price.
B) sellers must produce goods and services that are different from their competitors.
C) sellers should have substantial pricing power.
D) all you need are many buyers and many sellers.
E) the price must be a fair price.

Answer 2

each buyer and seller is small, relative to the whole market; no single decision-maker has any influence over the market price.

Question 3

Imperfect markets:

A) do not exist in democracies.
B) always result in supply exceeding demand.
C) always result in demand exceeding supply.
D) occur when the buyer or seller has an influence on the price.
E) can't occur if there are many buyers and many sellers.

Answer 3

occur when the buyer or seller has an influence on the price.

Question 4

The price of good X increases by 25%,causing the quantity consumed of good Y to decrease by 10%.If everything else is held constant in the economy,we can say with certainty that good X and good Y are:

A) substitutes.
B) inferior.
C) complements.
D) normal.
E) unrelated.

Question 5

A monopoly:

A) exists when either the buyer OR the seller has the ability to influence the market price.
B) exists when there are so many buyers and sellers that each has only a small impact on the market price and output.
C) exists when a single consumer demands the entire market for a particular good or service.
D) can have many sellers but only one buyer.
E) exists when a single company supplies the entire market for a particular good or service.

Question 6

Which of the following will cause the demand curve for burgers to shift the right?

A) The price of burgers decreases.
B) The price of burgers increases.
C) The price of burger buns increases.
D) A study is published by the National Association for Burger Research that says eating burgers can reduce the risk for bad acne.
E) The price of steak decreases.

Question 7

According to the figure below,at the price of $5:

A) the equilibrium quantity is 500.
B) the quantity demanded is 500.
C) the demand is 500.
D) there is a surplus.
E) there is a shortage.

Question 8

Kim attends the farmer's market in her hometown of Bakersfield every Sunday.She notices that all of the oranges sold by the many different farmers at the market have roughly the same price,as do most other products that are alike.Which statement best explains why the prices are so similar?

A) The farmer's market in Bakersfield is an imperfect market so prices are set by the producers.
B) The farmer's market in Bakersfield is a monopoly because it is the only place to buy fresh fruit on Sundays.
C) The farmer's market in Bakersfield is a competitive market so prices are set by the consumer.
D) The farmer's market in Bakersfield is a competitive market so neither the consumer nor the producer has a large influence on the price, allowing for the market to set the price.
E) The farmer's market in Bakersfield is an imperfect market where Kim's decision to purchase or not purchase an orange will not change the price of an orange.

Question 9

Companies use advertising to shift consumer demand.Which of the following demand shifters do you think advertisers most often rely on?

A) changes in income
B) the price of related goods
C) changes in tastes and preferences
D) the number of buyers
E) expectations regarding the future price

Question 10

Consider the following demand schedules for New York Mets T-shirts:

Holding all else constant,which of the following demand schedules is most likely to represent New York Mets T-shirts if they win the World Series?

A)
B)
C)
D)
E)

Question 11

Pepsi and Coke are considered substitute goods.Because of this,one would predict that,holding all else constant,if the price of Pepsi increases,we would see:

A) the demand curve for Coke shift to the right.
B) the demand curve for Coke shift to the left.
C) no change in the demand for Coke.
D) the demand curve for Pepsi shift to the right.
E) the demand curve for Pepsi shift to the left.

Question 12

Something is an inferior good if the demand for the good:

A) increases as the consumer's income increases.
B) increases as the consumer's income decreases.
C) decreases as the price of a complement increases.
D) decreases as the price of a substitute increases.
E) decreases as the consumer's income decreases.

Question 13

A demand schedule:

A) is a curve representing the relationship between the price of a good or service and the quantity demanded.
B) is a list of goods and services demanded at different prices.
C) is a table representing the relationship between the price of a good or service and the quantity demanded.
D) can only be used to analyze the individual's demand for a good or service.
E) can only be used to analyze the entire market's demand for a good or service.

Question 14

Two goods that are used together are called:

A) complements.
B) inferior.
C) Giffin.
D) substitutes.
E) normal.

Question 15

Which of the following would cause the demand curve to shift to the right?

A) Income decreases for an inferior good.
B) Income decreases for a normal good.
C) Tastes and preferences decrease.
D) The price of a substitute decreases.
E) The price of a complement increases.

Question 16

Refer to the table below:

Assume that the market for iPods has only two consumers: Chuck and Ryan.According the table above,if the price of an iPod is $85,the market will demand:

A) 8 iPods.
B) 6 iPods.
C) 5 iPods.
D) 28 iPods.
E) 45 iPods.

Question 17

When the price of an hour of tutoring increases,

A) the demand for tutoring decreases.
B) the demand for tutoring increases.
C) the demand curve for tutoring shifts.
D) the quantity demanded for tutoring increases.
E) the quantity demanded for tutoring decreases.

Question 18

Which of the following would cause a normal good's demand curve to shift to the left?

A) Income decreases.
B) Income increases.
C) The price increases.
D) The price decreases.
E) The input prices increase.

Question 19

Something is a normal good if the demand for the good:

A) increases as the consumer's income increases.
B) increases as the consumer's income decreases.
C) decreases if the price of a substitute good increases.
D) increases if the price of a complement good increases.
E) decreases as the income of the consumer increases.

Question 20

According to the law of demand,all other things being equal,

A) the quantity demanded falls when the price falls, and the quantity demanded rises when the price rises.
B) the quantity demanded falls when the price rises, and the quantity demanded rises when the price falls.
C) the demand falls when the price falls, and the demand rises when the price rises.
D) the demand falls when the price rises, and the demand rises when the price falls.
E) price and quantity are always positively correlated.

Question 21

Refer to the accompanying diagram.An increase in the number of buyers would cause the demand curve to:

A) shift from D₁ to D₃.
B) remain at D₁.
C) shift from D₁ to D₂.
D) shift from D₂ to D₁.
E) shift from D₂ to D₃.

Question 22

Refer to the accompanying graph.If consumers expect the price of a good to decrease in the future and all else is held constant,we would assume that the demand curve would:

A) shift from D₁ to D₃.
B) remain at D₁.
C) shift from D₁ to D₂.
D) shift from D₂ to D₁.
E) shift from D₂ to D₃.

Question 23

If the cost of flour increases from $3 to $5 a bag,you could predict the supply curve for bagels to:

A) shift to the right.
B) shift to the left.
C) become steeper.
D) become flatter.
E) increase.

Question 24

Which of the following will cause a movement along a good's supply curve?

A) an increase in the price of an input
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

Question 25

Chuck drives past the same gas station every day.He realizes that the gas station always changes its prices on Tuesdays but keeps the price steady the rest of the week.On Saturday,Chuck turns on the news and hears a report projecting that the price of gasoline is going to increase.Holding all else constant,what do you think would happen to Chuck's demand for gasoline on Monday?

A) His demand would shift to the right.
B) His demand would shift to the left.
C) You would see a movement down on his demand curve but no shift.
D) You would see a movement up on his demand curve but no shift.
E) You would see nothing happen to his demand curve until the price changed on Tuesday.

Question 26

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.

Question 27

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' supply for a good or service.
E) can be used only to analyze the entire market's supply for a good or service.

Question 28

As the life expectancy in the United States increases,which of the following could likely happen to the demand curve for items such as health care,cancer treatments,and nursing facilities,holding all else constant,and why?

A) There would be a decrease because individuals are healthier.
B) There would be an increase because the cost of these items is falling.
C) There would be an increase because there will be more buyers in these markets.
D) There would be a decrease because Social Security benefits are running out.
E) They will stay the same because these changes would affect the supply curve and not the demand curve.

Question 29

An expectation of a lower price in the future will:

A) increase current demand.
B) decrease current demand.
C) not change demand.
D) cause demand to stay the same but increase the quantity demanded.
E) cause demand to stay the same but decrease the quantity demanded.

Question 30

As more people migrated West during the gold rush,what do you think happened to the demand curve in most Western markets,holding all else constant?

A) The demand curve shifted to the right.
B) The demand curve shifted to the left.
C) There was no shift, but there was an increase in quantity demanded.
D) There was no shift, but there was a decrease in quantity demanded.
E) There was no shift, nor any increase or decrease in quantity demanded.

Question 31

Changes in population can:

A) alter the supply of a good or service in an area.
B) shift the supply curve of a good or service in an area.
C) cause the price of a good or service to increase in an area but cannot cause the price to decrease.
D) cause the price of a good or service to decrease in an area but cannot cause the price increase.
E) shift the demand curve of a good or service in an area.

Question 32

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 changes
D) expectations of future prices
E) the number of buyers

Question 33

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.

Question 34

Assume there are 100 suppliers of widgets in the widget market.Half of these suppliers supply 35 widgets to the market each,a quarter of these suppliers supply 40 widgets to the market each,and a quarter of these suppliers supply 50 widgets to the market each.What is the market supply for widgets?

A) 100
B) 125
C) 400
D) 4,000
E) 1,750

Question 35

If the price of rubber were to increase by 20% over the fiscal year and if all else were held constant,what would you 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.

Question 36

In March 2012,the state of California started requiring that all packaging for food and drink with the additive 4-methylimidazole (4-MI) be clearly labeled with a cancer warning.Because of this,both Pepsi and Coke changed their formula to eliminate 4-MI as an ingredient.If Pepsi and Coke did NOT change their formula,holding all else constant,what do you think would have happened to the demand for these goods,assuming Pepsi and Coke were in a competitive market?

A) The demand curve for both Pepsi and Coke would have shifted to the right, causing the price of both products to decrease and the profits for the companies to fall.
B) The demand curve for Pepsi and Coke would have remained unchanged, but the price of both products would have decreased and the profits for the companies would have fallen.
C) The demand curve for Pepsi and Coke would have decreased, but the prices and profits would not have changed.
D) The demand curve for only one of them would change because Pepsi and Coke are substitutes.
E) The demand curve for Pepsi and Coke would have shifted to the left, causing the price of both products to decrease and the profits for both companies to fall.

Question 37

Inputs are:

A) goods that are used together.
B) goods that are used in place of one another.
C) goods that you demand more of as your income increases.
D) goods that you demand less of as your income increases.
E) resources that firms use in the production of final goods and services.

Question 38

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.

Question 39

The demand curve for a good will shift to the right if,holding all else constant,

A) consumers expect future prices to decrease.
B) an input cost of the item goes up.
C) consumers expect future prices to increase.
D) the price of the good goes down.
E) the price of a substitute good goes down.

Question 40

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.

Question 41

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 you heart disease
E) a severe hurricane in Florida

Question 42

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.

Question 43

Refer to the table below.If the price of this good is $2.00,there would be a _________ of _________ units.

A) shortage; 20
B) surplus; 50
C) shortage; 30
D) surplus; 30
E) surplus; 20

Question 44

If a new french fry-cutting machine works twice as fast as the old machine,McDonald's 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.

Question 45

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.

Question 46

Refer to the table below.The equilibrium price and quantity in this market is:

A) $4.00 and 40 units.
B) $4.00 and 80 units.
C) $2.00 and 50 units.
D) $2.00 and 60 units.
E) $8.00 and 40 units.

Question 47

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%.
E) The price and quantity adjust back to the competitive market equilibrium point.

Question 48

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.

Question 49

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)

Question 50

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.

Question 51

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 up.
C) decrease, causing the supply to decrease.
D) decrease, causing the supply to increase.
E) increase, causing the supply to increase.

Question 52

Old Navy stocks more Bermuda shorts during the summer months than in the winter months.The resulting shift in supply explains:

A) 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.

Question 53

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.

Question 54

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 would:

A) 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.

Question 55

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

Question 56

If the price of Gatorade increases,the

A) equilibrium price of Powerade will increase because of a shift in demand.
B) equilibrium price of Powerade will increase because of a shift in supply.
C) equilibrium price of Powerade will decrease because of a shift in demand.
D) equilibrium quantity of Powerade will decrease because of a shift in supply.
E) equilibrium quantity of Powerade will decrease because of a shift in demand.

Question 57

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.

Question 58

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.

Question 59

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 same
D) increase; increase
E) increase; decrease

Question 60

On January 30,2012,Starbucks India announced plans to open 50 cafés.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.

Question 61

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; decrease.
D) decrease; increase.
E) remain the same; remain the same.

Question 62

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.

Question 63

The equilibrium price of teddy bears is $5.A study comes out that says owning a teddy bear causes you to earn a lower salary.If all other factors are held constant,which of the following scenarios could happen?

A) The price of teddy bears increases to $7 because of a supply shift.
B) The price of teddy bears decreases to $4 because of a supply shift.
C) The price of teddy bears decreases to $4 because of a demand shift.
D) The price of teddy bears increases to $7 because of a demand shift.
E) The price of teddy bears increases to $7 because of both a demand shift and a supply shift.

Question 64

Which of the following scenarios would explain the change in equilibrium shown in the accompanying figure?

A) an increase in an input price
B) a decrease in the number of buyers in a market
C) an increase in the price of a substitute good
D) an increase in the expected future price
E) a negative technological change

Question 65

Assume that the market for baseballs is in equilibrium.There is a sudden decrease in income throughout the economy.If all else is held constant,we would expect that:

A) if baseballs are an inferior good, then the demand curve will shift to the left, causing the equilibrium price and quantity to fall.
B) if baseballs are a normal good, then the demand curve will shift to the right, causing the equilibrium price and quantity to rise.
C) if baseballs are an inferior good, then the demand curve will shift to the right, causing the equilibrium price and quantity to fall.
D) if baseballs are a normal good, then the demand curve will shift to the left, causing the equilibrium price and quantity to fall.
E) if baseballs are a normal good, then the demand curve will shift to the left, causing the equilibrium price and quantity to rise.

Question 66

The difference between a tax and a subsidy is that when the government places a tax on a good,it _________ the equilibrium price and _________ the equilibrium quantity,whereas when the government places a subsidy on a good,it _________ the equilibrium price and _________ the equilibrium quantity.

A) increases; decreases; decreases; increases
B) increases; increases; decreases; decreases
C) decreases; decreases; increases; increases
D) decreases; increases; increases; decreases
E) increases; does not change; does not change; increases

Question 67

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; upward
D) below; shortage; downward
E) above; surplus; downward

Question 68

If all else is held constant,what would happen to the equilibrium price and quantity of iPhones if the price of an Android phone decreased?

A) They would both increase.
B) They would both decrease.
C) One would increase and one would decrease, but we don't know which would do what.
D) The price would increase and the quantity would decrease.
E) The price would decrease and the quantity would increase.

Question 69

When the demand curve shifts to the left and all else is held constant,the

A) equilibrium price falls and the equilibrium quantity rises.
B) equilibrium price rises and the equilibrium quantity falls.
C) equilibrium price falls and the equilibrium quantity falls.
D) equilibrium price rises and the equilibrium quantity rises.
E) equilibrium price falls and the equilibrium quantity remains constant.

Question 70

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.

Question 71

A technological advancement for Good A will shift the _________ curve of Good A to the _________,making the equilibrium price _________.

A) demand; left; decrease.
B) supply; right; increase.
C) demand; right; increase.
D) supply; left; increase.
E) supply; right; decrease.

Question 72

Wine and cheese are complement goods because they are consumed together.What would you expect to happen to the equilibrium quantity of cheese if the price of wine increased and all else is held constant?

A) It would increase because of a supply shift.
B) It would increase because of a demand shift.
C) It would stay the same because of both a demand and a supply shift.
D) It would decrease because of a supply shift.
E) It would decrease because of a demand shift.

Question 73

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.

Question 74

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.

Question 75

According to the accompanying figure,if the price is $10,there is a:

A) shortage of 15 units.
B) surplus of 15 units.
C) shortage of 30 units.
D) surplus of 30 units.
E) surplus of 22 units.

Question 76

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) you see a movement along the demand curve.

Question 77

The economists at JET Consulting consider Campbell's 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 Campbell's 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.

Question 78

When supply shifts to the right and demand stays constant,the equilibrium price:

A) increases and the equilibrium quantity decreases.
B) increases and the equilibrium quantity increases.
C) decreases and the equilibrium quantity decreases.
D) decreases and the equilibrium quantity increases.
E) stays the same and the equilibrium quantity increases.

Question 79

The equilibrium price of peanut butter is $5.A study comes out that says the fat in peanut butter is good for your 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.

Question 80

In the first few months of 2012,the price of gasoline increased by approximately 15%.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 left
D) demand; shift to the left
E) supply; shift to the right