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Exam 4: The Market Forces of Supply and Demand

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Question 1

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Whenever a determinant of supply other than price changes, the supply curve shifts.

A) True
B) False

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Question 2

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The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

A) True
B) False

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Question 3

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Which of the following events would cause the price of oranges to fall?

If something happens to alter the quantity supplied at any given price, then we move along the fixed supply curve to a new quantity supplied.

Figure 4-7 ​ -Refer to Figure 4-7. Equilibrium price and quantity are, respectively,

Which of the following changes would not shift the supply curve for a good or service?

If the price of steel, an input into the production of automobiles, rises, and at the same time the price of gasoline rises, what will happen to the equilibrium price and quantity of automobiles?

The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and when the price falls, the quantity demanded falls.

A decrease in the price of sugar will shift the supply curve for cookies to the right.

Figure 4-6 -Refer to Figure 4-6. The shift from S to S' in the market for muffins could be caused by

Surpluses drive price up, while shortages drive price down.

Suppose the United States had a short-term shortage of farmers. Which market mechanisms would adjust to remove the shortage?

Table 4-4 ​ ​ ​ ​ -Refer to Table 4-4. If these are the only four sellers in the market, then when the price increases from $4 to $6, the market quantity supplied

What would happen to the equilibrium price and quantity of lattés if the cost of producing steamed milk, which is used to make lattés, rises?

Suppose the supply and demand of corn both increase. As a result, what will happen to the equilibrium price and equilibrium quantity in the market?

If a good or service has only one seller, then the seller is called a monopoly.

Table 4-1 ​ ​ $\begin{array} { | c | c | } \hline \begin{array} { c } \text { Price } \\\text { (Dollarsper unit) }\end{array} & \begin{array} { c } \text { Quantity Demanded } \\\text { (Units) }\end{array} \\\hline 16 & 80 \\\hline 21 & Q _ { 1 } \\\hline\end{array}$ -Refer to Table 4-1. If the law of demand applies to this good, then Q₁ could be

A decrease in the price of pizza will shift the supply curve for pizza to the left.

Sellers as a group determine the demand for a product, and buyers as a group determine the supply of a product.

What would happen to the equilibrium price and quantity of smartphones if consumers' incomes rise and smartphones are a normal good?