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Exam 3: Supply and Demand

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Question 131

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Use the following to answer questions : Figure: The Demand and Supply of Wheat -(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply of Wheat. If there is a decrease in supply of 2,000 bushels at each price, the equilibrium price and quantity will be _____ and _____ bushels, respectively.

A) $5; 5,000
B) $7; 5,000
C) $6; 4,000
D) $8; 6,000

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Question 132

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If the United States increases tariffs on imports of lumber from Canada (which raises the price of lumber in the United States) , the equilibrium price of new homes in the United States will _____ and the equilibrium quantity of new homes in the United States will _____.

A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

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Question 133

Multiple Choice

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Which of the following will raise the price of milk?

If the price of corn rises, we expect:

Use the following to answer questions : -(Table: The Demand for Chocolate-Covered Peanuts) Look at the table The Demand for Chocolate-Covered Peanuts. If George, Barbara, and Dan are the only three buyers in the market and the price of a bag of chocolate-covered peanuts is $0.50, the total market quantity demanded is _____ bags per month.

An announcement that smoking will harm your ability to think clearly will most likely result in:

Use the following to answer questions : Figure: Demand for DVDs -(Figure: Demand for DVDs) Look at the figure Demand for DVDs. A decrease in the price of movie tickets (a substitute) would result in a change illustrated by the move from:

A decrease in demand and a decrease in supply will lead to _____ in equilibrium quantity and _____ in equilibrium price.

Use the following to answer questions : Figure: Demand for DVDs -(Figure: Demand for DVDs) Look at the figure Demand for DVDs. A decrease in the price of DVD players (a complement) would result in a change illustrated by the move from:

Which of the following best describes demand?

In the Midwestern United States, the price of an ear of corn is always lowest in the summer. This seems odd, because consumers really enjoy eating ears of corn in the summer. Can you explain this?

When the price of lamps increases, the:

Consider the market for iPods. What happens if a fantastic new alternative MP3 player is developed and at the same time a boat carrying a large shipment of iPods is attacked by pirates and sunk?

Use the following to answer questions : Figure: Shifts in Demand and Supply III -(Figure: Shifts in Demand and Supply III) Look at the figure Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose a wet and sunny year increases the nation's corn crop by 20 percent. Which panel BEST describes how this will affect the market for corn?

Use the following to answer questions: Figure: Shifts in Demand and Supply -(Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and Supply. The graph shows how supply and demand might shift in response to specific events. Suppose a new machine allows restaurants and fast-food outlets to produce french fries at a lower cost. Which panel BEST describes how this will affect the market for french fries?

Use the following to answer questions : Figure: The Demand and Supply of Wheat -(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply of Wheat. If a price of $8 temporarily exists in this market, a _____ of _____ bushels will result.

Suppose that supply increases and demand decreases. What is the most likely effect on price and quantity?

Which of the following factors would result solely in a movement along the demand curve for a particular good?

After graduation from college, you might have an increase in your income from a new job. If as a result you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger is a(n) _____ good.

Use the following to answer questions : Figure: Four Markets for DVDs -(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. Which of the graphs illustrates what may happen in the market for DVDs if D₁ or S₁ is the original curve and D₂ or S₂ is the new curve and if the cost of producing DVDs falls?