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Exam 3: Supply and Demand

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Question 121

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Use the following to answer questions -(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.50, there is:

A) a surplus of 35 bags per month.
B) a shortage of 35 bags per month.
C) a surplus of 70 bags per month.
D) a shortage of 70 bags per month.

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Question 122

Multiple Choice

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Which of the following is TRUE of a normal good?

A) When income increases, the demand for the good remains unchanged.
B) When income increases, the demand for the good decreases.
C) When income increases, the demand for the good increases.
D) Income and the demand are unrelated.

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Question 123

Multiple Choice

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Which of the following is TRUE of an inferior good?

Use the following to answer questions : -(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z. If the price of good Z is $15, there will be:

Use the following to answer questions Figure: The DVD Rental Market -(Figure: The DVD Rental Market) Look at the figure The DVD Rental Market. At a rental price of $3, there will be:

Suppose the demand curve for good Z is downward-sloping. If the price of good Z decreases because of a shift in supply, this will cause:

A new wonder diet that results in a dramatic weight loss sweeps through the United States. The key to the diet is to eat unlimited amounts of red meat (beef) but no poultry or carbohydrate-rich foods. As millions of Americans switch to the new diet, we can expect a(n) _____ in the _____ poultry, leading to a shift to the _____ in the _____ curve for poultry and _____ poultry prices.

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

The price of microchips used to produce computers falls. As a result, the equilibrium price of computers _____ and the equilibrium quantity _____.

Holding all other things constant, if ramen noodles are an inferior good to Vanessa, then as her income increases, her demand curve for ramen noodles:

Which of the following statements is CORRECT?

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 spring frost destroys one-third of the nation's artichoke crop. Which panel BEST describes how this will affect the market for mayonnaise, which is a complement to artichokes?

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.

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 figure shows how supply and demand might shift in response to specific events. Suppose a fall frost destroys one-third of the nation's orange crop. Which panel BEST describes how this will affect the market for oranges?

Which of the following would result in a movement along the demand curve?

Suppose oranges and clementines are considered to be substitutes. Holding everything else constant, if the price of oranges increases, then the demand for _____ will _____.

Use the following to answer questions Figure: Shifts in Demand and Supply IV -(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose the price of lumber falls dramatically. Which panel BEST describes how this will affect the market for new houses?

If Benjamin considers sushi to be a normal good and if his income increases by 20 percent, his purchases of sushi will:

Use the following to answer questions -(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.80, there is a monthly:

According to the law of demand, if the price of steak increases in Rhode Island, the demand for steak will decrease in Rhode Island.