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Exam 4: The Market Forces of Supply and Demand

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Question 101

Multiple Choice

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If muffins and bagels are substitutes, a higher price for bagels would result in

A) an increase in the demand for bagels.
B) a decrease in the demand for bagels.
C) an increase in the demand for muffins.
D) a decrease in the demand for muffins.

E) C) and D)
F) None of the above

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Question 102

Multiple Choice

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What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

A) Both the equilibrium price and quantity would increase.
B) Both the equilibrium price and quantity would decrease.
C) The equilibrium price would increase, and the equilibrium quantity would decrease.
D) The equilibrium price would decrease, and the equilibrium quantity would increase.

E) A) and B)
F) All of the above

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Question 103

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The law of supply states that, other things equal, when the price of a good falls, the quantity supplied falls as well.

When the market price is below the equilibrium price, suppliers are unable to sell all they want to sell.

If a seller in a competitive market chooses to charge more than the going price, then

In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold.

According to the law of demand, when price increases the quantity demanded of a good

The market supply curve

Table 4-6 ​ ​ $\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Price } \\\text { (Dollars per unit) }\end{array} & \begin{array} { c } \text { Quantity Demanded } \\\text { (Units) }\end{array} & \begin{array} { c } \text { Quantity Supplied } \\\text { (Units) }\end{array} \\\hline 15 & 10 & 60 \\\hline 12 & 20 & 45 \\\hline 9 & 30 & 30 \\\hline 6 & 40 & 15 \\\hline 3 & 50 & 0 \\\hline\end{array}$ ​ -Refer to Table 4-6. The equilibrium price and quantity, respectively, are

Figure 4-11 ​ ​ -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if the price of this good increases.

If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

Which of the following events could cause an increase in the supply of ceiling fans?

An increase in the price of maple syrup will decrease both the equilibrium price and quantity in the market for pancakes.

A shortage is the same as an excess demand.

Figure 4-13 ​ -Suppose researchers discover a new, lower cost method of producing calculators. As a result, will the supply of calculators increase or decrease?

Soup is an inferior good if the demand

When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now.

An increase in the price of ink will shift the supply curve for pens to the left.

If a determinant of demand other than price changes, the demand curve shifts.

Which of the following would shift the supply of cars to the left?