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Exam 3: Demand, Supply, and Market Equilibrium

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Question 41

Multiple Choice

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In moving along a supply curve, which of the following is not held constant?

A) the number of firms producing this good
B) expectations about the future price of the product
C) techniques used in producing this product
D) the price of the product itself.

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Question 42

Multiple Choice

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A leftward shift of a product supply curve might be caused by

A) an improvement in the relevant technique of production.
B) a decline in the prices of needed inputs.
C) an increase in consumer incomes.
D) some firms leaving an industry.

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Question 43

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If farmers withhold some of their current corn harvest from the market because they anticipate a higher price of corn in the near future, then this would cause a(n)

Producing a good in the least costly way is known as allocative efficiency.

An increase in the excise tax on cigarettes raises the price of cigarettes by shifting the

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.An increase in the price of a product that is a complement to X will

In cases where the supply curve is vertical, any change in demand will cause only a change in price but no change in quantity.

Suppose product X is an input in the production of product Y.Product Y in turn is a substitute for product Z.An increase in the price of X can be expected to

In the market for sushi, an increase in supply and a greater decrease in demand will cause both the equilibrium price and quantity to decrease.

In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase.

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain

Two goods are considered to be related goods by many buyers: if the price of one increases, buyers buy more of the other.This indicates that the two goods are complements.

A newspaper reports that the average price of new homes in a certain city had decreased, and the number of new homes sold had also decreased.This situation is probably caused by

An increase in the demand for online streaming music indicates that more is

A higher price reduces the quantity demanded for a product because

A decrease in the price of multi-touch screens for electronic tablets will increase the supply of electronic tablets.

Suppose that at prices of $1, $2, $3, $4, and $5 for product Z, the corresponding quantities supplied are 3, 4, 5, 6, and 7 units, respectively.Which of the following would increase the quantities supplied of Z to, say, 6, 8, 10, 12, and 14 units at these prices?

Sometimes, we observe cases where the price of a product rose and the quantity bought by buyers also increased.Such cases occur due to a violation of the

Other things equal, which of the following might shift the demand curve for gasoline to the left?

When the price of a product rises, consumers with a given money income shift their purchases to other products whose prices are now relatively lower.This statement describes