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Exam 4: The Market Forces of Supply and Demand

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Question 131

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Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of

A) crystal to be unaffected.
B) crystal to decrease.
C) crystal to increase.
D) lead to increase.

E) B) and D)
F) A) and B)

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Question 132

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Figure 4-6 -Refer to Figure 4-6. The shift from D to D' is called

A) an increase in demand.
B) a decrease in demand.
C) a decrease in quantity demanded.
D) an increase in quantity demanded.

E) C) and D)
F) B) and D)

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Question 133

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The law of supply and demand asserts that

Figure 4-21 -Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

Table 4-9 The demand schedule below pertains to sandwiches demanded per week. $\begin{array} { | c | c | c | c | } \hline \text { Price } & \begin{array} { c } \text { Harry's } \\\text { Quantity } \\\text { Demanded }\end{array} & \begin{array} { c } \text { Darby's } \\\text { Quantity } \\\text { Denanded }\end{array} & \begin{array} { c } \text { Jake's } \\\text { Quantity } \\\text { Denanded }\end{array} \\\hline \$ 3 & 3 & 4 & 3 \\\hline \$ 5 & 1 & 2 & x \\\hline\end{array}$ -Refer to Table 4-9. Regarding Harry and Darby, for whom are sandwiches a normal good?

An improvement in production technology will

Figure 4-18 -Refer to Figure 4-18. At a price of $12, there is a

Table 4-1 $\begin{array} { | c | c | c | c | } \hline \text { Price } & \begin{array} { c } \text { Qurantit; Demanded } \\\text { by Michelle }\end{array} & \begin{array} { c } \text { Qurintity Demtanded } \\\text { by Laura }\end{array} & \begin{array} { c } \text { Quantity Damanded } \\\text { by Hillary }\end{array} \\\hline \$ 5 & 5 & 4 & 11 \\\hline \$ 4 & 6 & 6 & 13 \\\hline \$ 3 & 7 & 8 & 15 \\\hline \$ 2 & 8 & 10 & 17 \\\hline 1 & 9 & 12 & 19 \\\hline \$ 0 & 10 & 14 & 21 \\\hline\end{array}$ -Refer to Table 4-1. If the market consists of Laura and Hillary only and the price falls by $1, the quantity demanded in the market increases by

In a market economy, who or what determines who produces each good and how much is produced?

Which of these statements best represents the law of demand?

An increase in demand is represented by a

A decrease in the price of a good will

If a decrease in income increases the demand for a good, then the good is a(n)

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins rises?

An increase in demand shifts the demand curve to the left.

Figure 4-21 -Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for orange juice of an announcement by the American Dental Association that orange juice erodes tooth enamel?

Price will rise to eliminate a surplus.

Individual demand curves are summed vertically to obtain the market demand curve.

Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the

Figure 4-10 -Refer to Figure 4-10. Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for tennis racquets?