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Terms in this set (47)
What is depicted in the graph below?
an increase in supply
Which of the following would cause an increase in the demand for umbrellas?
a. an increase chance of rain
b. improved technology for umbrella manufacturing
c. a decrease in the price of
umbrellas
d. both A and C
d. all of the above
a. an increase chance of rain
Assume that this market has only three consumers. Based on the table below, what quantity is demanded by the market at a price of $4.00?
3
If the price of Dell computers increases, what will be the impact on the market for a substitute such as
Gateway computers?
a. both the equilibrium price and equilibrium quantity will increase
b. the equilibrium price will increase and the equilibrium quantity will decrease
c. the equilibrium price will decrease and the equilibrium quantity will increase
d. both the equilibrium price and the equilibrium quantity will decrease
a. both the equilibrium price and equilibrium quantity will increase
If the
price of General Motors automobiles decreased and the quantity bought/sold increased, which curve must have moved in which direction?
a. supply increased
b. supply decreased
c. demand increased
d. demand decreased
a. supply increased
If demand increases, what is the impact on the equilibrium price and the equilibrium quantity?
a. both price and quantity will increase
b. price will increase and
quantity will decrease
c. price will decrease and quantity will increase
d. both price and quantity will decrease
a. both price and quantity will increase
On the graph depicted below, what quantity would be supplied at a price of $8.00?
20
Which of the following depicts the correct relationship between individual demand curves and the market demand curve? (Assume this market has only two individual consumers.)
What is most likely depicted in the graph below?
a. an increase in demand
b. a decrease in demand
c. an increase in supply
d. a decrease in supply
c. an increase in supply
Assume that this market has four firms selling guitars as listed in the table below. Which
of the following is true?
a. At a price of $50 the quantity supplied by the market will be 84.
b. At a price of $110, the quantity supplied by the market will be 30.
c. If the price increases from $50 to $80, the quantity supplied by the market will increase by 18 units.
d. If the price increases from $80 to $110, the quantity supplied by the market will decrease by 24 units.
e. If the price increases from $80 to $110, the quantity supplied by the market will increase by 54
units.
c. If the price increases from $50 to $80, the quantity supplied by the market will increase by 18 units.
*At a price of $50, the firms in the market want to sell a total of 12 units. At a price of $80, the firms in the market want to sell a total of 30 units. Therefore an increase in price from $50 to $80 will increase the quantity supplied by 18.
In the graph below, what quantity will be supplied at a price of $2.65?
150
*In this graph, follow the price of $2.65 all the way to the right where is intersects the supply curve. From that point, move down to the horizontal axis to find the quantity of 150. This quantity is the amount that producers would want to sell at a price of $2.65.
In the graph below, what quantity will be demanded at a price of $2.65?
100
*In this graph, follow the dashed horizontal at the price of $2.65 to the right where is intersects the demand curve. From that point, move down to the horizontal axis to find the quantity of 100. This quantity is the amount that consumers would want to buy at a price of $2.65.
Which of the following depicts the correct relationship between individual demand curves and the market demand curve? (Assume this market has only two individual consumers.)
If the price of leather increased, what would happen in the market for leather wallets?
a. an increase in price and an increase in quantity
b. an increase in price and a decrease in quantity
c. a decrease in price and an increase in quantity
d. a decrease in price and a decrease in quantity
b. an increase in price and a decrease in quantity
*Hide Feedback
The increased price of the
raw material would have an impact on the producers first, shifting the supply curve to the left. As a result, the equilibrium price would increase and the equilibrium quantity would decrease. Basically, producers would be forced to sell for a higher price and would end up selling fewer leather wallets. This is another case in which a graph may help.
If the price of cell phones decreased, what would happen in the market for cellular
service?
a. an increase in price and an increase in quantity
b. an increase in price and a decrease in quantity
c. a decrease in price and an increase in quantity
d. a decrease in price and a decrease in quantity
a. an increase in price and an increase in quantity
*The lower price for cell phones would increase the demand for cellular service, depicted as demand shifting to the right. As a result, the equilibrium price and quantity would increase. Basically, consumers would purchase more and more cell phones and cellular service. Eventually, service providers would raise their prices. See the graph below.
If the price of Toyotas increased, what would happen in the market for Hondas?
a. an increase in price and an increase in quantity
b. an increase in price and a decrease in quantity
c. a decrease in price and an increase in quantity
d. a decrease in price and a
decrease in quantity
a. an increase in price and an increase in quantity
*The higher price for Toyotas would increase the demand for a substitute such as a Honda, depicted as demand shifting to the right. As a result, the equilibrium price and quantity would increase. Car buyers might be more inclined to purchase Hondas because of the relative change in price. However, the Honda dealers and salespersons will eventually raise their prices in response to the greater demand for their cars. See the graph below.
If the equilibrium price of a Sony 42" plasma television decreased and the equilibrium quantity increased, which curve must have moved in which direction?
a. supply increased
b. supply decreased
c. demand increased
d. demand decreased
a. supply increased
Which of the following depicts the correct relationship between the supply curves for individual firms and the market supply curve? (Assume this market has only two firms operating.)
Assume that U.S. auto workers negotiate a new contract with higher wages for themselves. What would be the impact on the market for new cars?
a. increase in demand
b. increase in supply
c. decrease in demand
d. decrease in supply
e. none of the above
d. decrease in supply
Based on the graph below, what price are we most likely to see in this market? At this price, what amount of goods will be bought/sold?
price = $2.25 ; quantity = 115
*We would expect any free market to move to the equilibrium price and quantity. To locate this point, find the intersection of supply and demand. In this graph, the intersection of supply and demand is found at a price of $2.25 and a quantity of 115. That is the amount that we would expect to be both bought and sold in this market.
If the equilibrium price of new homes decreased and the equilibrium quantity decreased also, which curve must have moved in which direction?
a. supply increased
b. supply decreased
c. demand increased
d. demand decreased
d. demand decreased
*A decrease in demand would cause consumers to want less of the good in question. As a result, producers would have to lower their prices. We would depict this as a decrease in the equilibrium price and a decrease in the equilibrium quantity. The graph below may help to illustrate the situation.
What is most likely depicted in the graph below?
a. a decrease in demand
b. a decrease in quantity demanded
c. a decrease in supply
d. a decrease in quantity supplied
d. a decrease in quantity supplied
On the graph depicted below, what quantity would be demanded at a price of $8.00?
60
*40 is the equilibrium quantity. This would be both the quantity demanded and the quantity supplied if the price was $16.00; look across from a price of $8.00 to find the correct answer.
If the price of gasoline
decreased significantly, what would be the impact on the market for moving services that used large trucks?
a. an increase in price and an increase in quantity
b. an increase in price and a decrease in quantity
c. a decrease in price and an increase in quantity
d. a decrease in price and a decrease in quantity
c. a decrease in price and an increase in quantity
*The lower gasoline price would impact producers in a positive manner causing an increase in supply. Try drawing a new supply curve to the right and see how the market equilibrium changes.
Assume that an expansion increases the average income level for individuals throughout the economy. What would be the impact on the market for new cars?
a. increase in demand
b. increase in supply
c. decrease in demand
d. decrease in supply
e. none of the above
a . increase in demand
If supply decreases, what is the impact on the equilibrium price and the equilibrium quantity?
a. both price and quantity will increase
b. price will increase and quantity will decrease
c. price will decrease and quantity will increase
d. both price and quantity will decrease
b price will increase and quantity will decrease
Which of the following
would not cause an increase in demand for tickets to a college football game?
a. The two teams are tied for first place with one game remaining.
b. An increased number of fans in the area
c. A significant increase in the price of tickets for other sporting events like professional football
d. A decrease in the price of tickets for this game
e. All of the above would lead to an increase in demand.
c. a decrease in the price of tickets for this game
*The only factor listed that would not increase demand would be the lower ticket prices mentioned in answer D. This would lead to an increase in quantity demanded (movement along the existing curve) as opposed to an increase in demand (creation of an entirely new curve).
If the equilibrium price of a good increased and the equilibrium quantity increased, which curve must have moved in which direction?
a. supply increased
b.
supply decreased
c. demand increased
d. demand decreased
c. demand increased
*This would increase quantity but cause a decreased in price. Drawing a graph may be helpful in this case.
If a local professional sports franchise drafts a new star player and goes from worst to first in the standings, what will be the impact in the market for tickets to these games?
a. an increase in price and an
increase in quantity
b. an increase in price and a decrease in quantity
c. a decrease in price and an increase in quantity
d. a decrease in price and a decrease in quantity
a. an increase in price and an increase in quantity
*The team's improvement would impact consumers causing an increase in demand. Try drawing a new demand curve to the right and see how the market equilibrium changes.
Which of
the following would cause in demand for Dell computers?
a. an increase in the price of Dell computers
b. a decrease in the price of Dell computers
c. an increase in the price of Gateway computers
d. a decrease in the price of Gateway computers
e. both B and C above
c. an increase in the price of Gateway computers
*An increase in the price of Gateway computers - a substitute - would cause an increase in the demand for Dell computers. However, a decrease in the price of Dell computers would not cause an increase in demand (entirely new demand curve) it would only cause an increase in quantity demanded (movement along the existing demand curve).
Assume that the price of steel decreases significantly. What would be the impact on the market for new cars?
a. increase in demand
b. increase in supply
c. decrease in demand
d. decrease in supply
e. none of the
above
b. increase in supply
What is most likely depicted in the graph below?
a. an increase in demand
b. a decrease in demand
c. an increase in supply
d. a decrease in supply
d. a decrease in supply
Assume that this market has only the three consumers who are listed below. Based on the table below, what quantity is demanded by the market at a price of $2.00?
17
If bad weather destroys a significant portion of the tomato crop, what will be the impact in the market for tomatoes?
a. an increase in price and an increase in quantity
b. an increase in price and a decrease in quantity
c. a decrease in price and an increase in quantity
d. a decrease in price and a decrease in quantity
b. an increase in price and a decrease in quantity
Assume that the U.S. government makes a law that reduces all car prices by $2,000. What would be the impact on the market for new cars?
a. increase in demand
b. increase in supply
c. decrease in demand
d. decrease in supply
e. none of the above
e. none of the above
*A change in price will cause a change in quantity demanded and a change in quantity supplied but it will not create an entirely new demand curve nor an entirely new supply curve.
If supply increases, what is the impact on the equilibrium price and the equilibrium quantity?
a. both price and quantity will increase
b. price will increase and quantity will decrease
c. price will decrease and quantity will increase
d. both price and quantity will decrease
c. price will decrease and quantity will increase
*An increase in supply makes an item less scarce which decreases price.
Assume that there is a significant improvement in the quantity and quality of mass transit (buses and trains) in cities throughout the country. What would be the impact on the market for new cars?
a. increase in demand
b. increase in supply
c. decrease in demand
d. decrease in supply
e. none of the above
c. decrease in demand
Which of the following would not cause a decrease in supply of dining room tables?
a. an increase in the price of wood used to make these tables
b. an increase in the expected future price of furniture like these tables
c. a decrease in the number of companies making these tables
d. a decrease in the current price of these tables
e. All of the above would lead to an increase in demand.
d. a decrease in the current price of these tables
*The only factor listed that would not decrease supply would be the lower current price mentioned in answer D. This would lead to a decrease in quantity supplied (movement along the existing curve) as opposed to a decrease in supply (creation of an entirely new curve).
If demand decreases, what is the impact on the equilibrium price and the equilibrium quantity?
a. both price and quantity
will increase
b. price will increase and quantity will decrease
c. price will decrease and quantity will increase
d. both price and quantity will decrease
d. both price and quantity will decrease
*This is another case in which drawing a graph can be helpful. A decrease in demand is depicted as the demand curve moving to the left. Note the change in equilibrium based on the intersection of the supply curve and the demand curve.
Which of the following would cause an increase in the demand for iPods?
a. advances in production technology
b. a decrease in the price of music downloads
v. a decrease in the price of iPods
d. both B and C above
e. all of the above
b. a decrease in the price of music downloads
Assume that a market exists with only three producers. Of these curves, which of the four could be the market supply curve making the others the individual supply curves?
S4
On the graph depicted below, what quantity would be demanded at a price of $8.00?
60
If the price of remaining Falcons tickets increased and the quantity bought/sold decreased, which curve must have moved in which direction?
a. supply
increased
b. supply decreased
c. demand increased
d. demand decreased
b. supply decreased
If the price of GM autos decreases, what will be the impact on the market for GM auto parts - a complement?
a. both the equilibrium price and equilibrium quantity will increase
b. the equilibrium price will increase and the equilibrium quantity will decrease
c. the equilibrium price will decrease and the
equilibrium quantity will increase
d. both the equilibrium price and the equilibrium quantity will decrease
a. both the equilibrium price and equilibrium quantity will increase
What is depicted in the graph below?
a. a decrease in supply
a decrease in demand
an increase in supply
an increase in demand
If supply
increases, what is the impact on the equilibrium price and the equilibrium quantity?
a. both price and quantity will increase
b. price will increase and quantity will decrease
c. price will decrease and quantity will increase
d. both price and quantity will decrease
c. price will decrease and quantity will increase
Assume that this market has only three producers. Based on the table below, what quantity is supplied by the market at a price of $15,000?
975
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