Identify the determinants of demand and supply

Assignment Help Microeconomics
Reference no: EM131018402

Practice Problems #2

Objective 1: Identify the determinants of demand and supply and indicate how each must change for demand and supply to increase or decrease. (Q1-2)

Objective 2: Derive market demand and market supply curves from individual demand and supply schedules. (Q3-4)

Objective 3: Differentiate between a shift of demand curve or supply curve and a movement along a curve, and depict these cases correctly on a graph. (Q5-6)

Objective 4: Provide explanations for the slope of a typical demand curve. (Q7-8)

Objective 5: Distinguish between normal goods and inferior goods, substitute goods and complement goods. (Q9-10)

Questions:

1. Energizer and Duracell's Coppertop batteries are substitutes. The Energizer Bunny cuts supply and increases the price of its batteries. Equilibrium price will______ and quantity exchanged will _______ in the market for Duracell.

  1. Rise; rise
  2.  Fall; rise
  3. Fall; fall
  4. Rise; fall

2. As the price of oranges increases, orange growers will:

  1. Use more-expensive methods of growing oranges.
  2. Use less-expensive methods of growing oranges.
  3.  Decrease the supply of oranges.
  4. Increase the supply of Oranges.

3. If the firms producing fuzzy dice for cars must obtain a higher price than they did previously to produce the same level of output as before, then we can say that there has been:

a.     An increase in quantity supplied.

b.     An increase in supply.

c.     A decrease in supply.

d.     A decrease in quantity supplied.

4. The market supply curve for wheat depends on each of the following except:

a. The price of wheat-producing land.

b. The price of production alternatives for wheat.

c. The tastes and preferences of wheat consumers.

d. The number of wheat farmers in the market.

5. A "change in demand" means

  1. The quantity demanded changes as price changes.
  2. A movement along a given demand curve or schedule.
  3. A shift in the position of the demand curve.
  4. A change in the shape of a demand curve.

6. Which of the following will cause a decrease in the demand for tennis racquets?

  1. A rise in the price of squash racquets.
  2. A rise in the price of tennis racquets.
  3. A rise in the price of tennis balls.
  4. A fall in the price of tennis shoes.

7. The demand curve has:

a. "Price" on the vertical axis, "quantity demanded per time period" on the horizontal axis, and an upward sloping demand curve.

b. "Price" on the horizontal axis, "quantity demanded per time period" on the vertical axis, and an upward sloping demand curve.

c. "Price" on the vertical axis, "quantity demanded per time period" on the horizontal axis, and a downward sloping demand curve.

d. "Price" on the horizontal axis, "quantity demanded per time period" on the vertical axis, and a downward sloping demand curve.

8. We are trying to explain the law of demand. When the price of pretzels rises,

  1. The opportunity cost of consuming pretzels increases along the demand curve.
  2. Sellers switch production and increase the quantity supplied of pretzels.
  3. Income rises for producers of pretzels.
  4. The opportunity cost of other goods increases.

9. If the economy's income rises by 10% then, ceteris paribus, we would predict:

  1. A decrease in demand for a normal good.
  2. An increase in quantity demanded for a normal good.
  3. An increase in quantity demanded for an inferior good.
  4. A decrease in demand for an inferior good.

10. Good A and Good B are substitutes for one another. An increase in the price of A will:

  1. Increase the demand for B
  2. Reduce the quantity demanded of B
  3. Increase the quantity demanded of B
  4. Reduce the demand for B.

Reference no: EM131018402

Questions Cloud

What should your company record as a gain from the sale : The prevailing rate of interest for a note of this type is 8%. What should your company record as a gain from the sale of this computer?
Discuss the non-metals used in aircraft : There are other standards besides the AN (Airforce-Navy) bolt. What does NAS or MS standards refer to?
Write an equation in slope intercept form for clint budget : Suppose Clint's income is $100 a day and he spends all of this income on hamburgers (H) or hotdogs (D). Write an equation in slope intercept form for Clint's budget line given this information and measuring hamburgers on the vertical axis
How should the court rule : The Franklins sued, claiming that the FLB attorney had authority to settle the case and that FLB was bound by the settlement agreement. How should the court rule?
Identify the determinants of demand and supply : Identify the determinants of demand and supply and indicate how each must change for demand and supply to increase or decrease.
Describe the economic- social and political environments : Describe the economic, social, and political environments in which the problem arose and in which the existing policy for solving the problem was developed. Evaluate the effectiveness of the policy or lack thereof in dealing with the problem.
What is the value of total surplus in this market : What is the value of total surplus in this market when the market is in equilibrium? Show how you calculated this value
Write equation for country a production possibility frontier : Given the above information write an equation for Country A's production possibility frontier in slope intercept form where bread (B) is measured on the vertical axis and jam (J) is measured on the horizontal axis
Regardless of changes in market value : Regardless of changes in market value, land is reported at its historical cost an application of the qualitative characteristic of - Relevance

Reviews

Write a Review

 

Microeconomics Questions & Answers

  Firm uses three inputs to produce its output

Suppose that the firm uses three inputs to produce its output: capital K, labor, L and materials, M. The firm’s production function is given by Q = K^ (1/3) * L ^ (1/3) * M ^ (1/3).

  The market for fast food is a national market

Fast-food chains like McDonald"s, Burger King, and Wendy"s operate all over the United States. Therefore, the market for fast food is a national market.

  What would production at a point outside the production

What would production at a point outside the production possibilities curve indicate? What must occur before the economy can attain such a level of production?

  Give an in-depth evaluation

Give an in-depth evaluation. Provide information regarding what the regulation is about, your vision of the regulation, how it impacts the profession (logistics and transportation) and the reason you chose the regulation.

  The u.s. is an attractive market for foeign marketers

The U.S. is an attractive market for foeign marketers for all of the following reasons except: A) Large population B) Rapid growth and Economic growth

  International financial management is necessary for

with technological advances companies can expand their operations effectively and efficiently. international financial

  What do we mean by the economics of education

What reasons would you give for the rather sizable school dropout rates in developing countries? What might be done to lower these rates?

  Explain what could happen in the future with each of these

explain what could happen in the future with each of these trends below and come up with three3 more trends not listed

  What is the difference between a change in demand versus a

what is the difference between a change in demand versus a change in quantity demanded? a change in supply versus a

  Assume that in clothing market production costs have fallen

suppose that in the clothing market production costs have fallen but the equilibrium price and quantity purchased have

  What evidence might be bring to the hearing

Antitrust authorities at the Federal Trade Commission are reviewing your company's recent merger with a rival firm. The FTC is concerned that the merger of the two rival firms in the same market will increase market power.

  What would the fed have to do to lower the money supply

Assume the money supply (M) is $1,200 billion, bank deposits (D) are $800 billion and the required reserve ratio is 10%. What would the Fed have to do (in terms of open market operations) to lower the money supply by 5%? Explain. (Note assume that th..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd