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Exam 4: The Market Forces of Supply and Demand

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Question 41

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

A) True
B) False

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Question 42

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A decrease in the price of a complement will shift the demand curve for a good to the left.

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B) False

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Question 43

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Bo bakes muffins that he sells at the local farmer's market. If he purchases a new convection oven that reduces the costs of baking muffins, the

If the demand for a good increases at the same time as the supply of the same good decreases, what will happen to the equilibrium price and quantity of the good?

In a perfectly competitive market, the goods offered for sale are all exactly the same.

Table 4-9 The following table shows the supply and demand schedules in a market. $\begin{array} { | l | l | l | } \hline \text { Price (\$) } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (units) }\end{array} \\\hline 0 & 50 & 0 \\\hline 2 & 40 & 15 \\\hline 4 & 30 & 30 \\\hline 6 & 20 & 45 \\\hline 8 & 10 & 60 \\\hline 10 & 0 & 75 \\\hline\end{array}$ -Refer to Table 4-9. If the supply curve shifts to the right, will the price in this market rise or fall?

If Christopher expects to earn a higher income next month, he may choose to

An increase in the price of pizza will shift the demand curve for pizza to the left.

When the market price is above the equilibrium price, the quantity of the good demanded exceeds the quantity supplied.

If income rises in the market for an inferior good, will the demand curve for the inferior good shift to the right or to the left?

Figure 4-7 ​ -Refer to Figure 4-7. At what price would there be an excess demand of 600 units of the good?

Figure 4-10 -Refer to Figure 4-10. Which of the following movements would illustrate the effect of an increase in the price of binders on the market for paper?

If the number of buyers in a market decreases, then

Table 4-3 ​ $\begin{array} { | c | c | } \hline \begin{array} { c } \text { Price } \\\text { (Dollarsper unit) }\end{array} & \begin{array} { c } \text { Quantity Supplied } \\\text { (Units) }\end{array} \\\hline 12 & 170 \\\hline 25 & Q _ { 1 } \\\hline\end{array}$ -Refer to Table 4-3. If the law of supply applies to this good, then Q₁ could be

Which of the following events would cause a movement downward and to the left along the supply curve for oranges?

Figure 4-12 ​ ​ -Refer to Figure 4-29. The movement from S1 to S2 is a

Figure 4-3 -Refer to Figure 4-3. The shift from D_a to D_b is called

What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the near future?

The line that relates the price of a good and the quantity demanded of that good is called the demand

If an increase in income decreases the demand for a good, then the good is