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The supply curve will shift to the right and the equilibrium price will fall if new producers enter the industry.

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The market demand for a product will shift if which of the following variables shift?


A) the price of the product
B) population
C) technology
D) the prices of substitutes in production

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What would happen in the market for laser eye surgery if insurance companies started to cover a portion of the price of voluntary procedures?


A) Demand will increase, but this will not shift the supply curve.
B) Supply will increase, but this will not shift the demand curve.
C) Demand and supply will both increase.
D) Demand will increase and supply will decrease.

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At a product's equilibrium price:


A) the product's demand curve is the same as the product's supply curve.
B) the quantity of the product demanded is greater than the quantity of the product supplied.
C) the quantity of the product demanded is less than the quantity of the product supplied.
D) the product's demand curve crosses the product's supply curve.

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If the price of petrol decreases, what will be the impact in the market for public transportation?


A) The demand curve for public transportation shifts to the right.
B) The quantity of public transportation demanded increases.
C) The demand curve for public transportation shifts to the left.
D) The quantity of public transportation demanded decreases.

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If the price of peaches, a substitute for plums, decreases, then the demand for plums will increase.

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Sardines are ___________ if a decrease in income leads to an increase in the demand.


A) an inferior good.
B) a neutral good.
C) a necessity.
D) a normal good.

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One would speak of a change in the quantity of a good supplied, rather than a change in supply, if:


A) supplier expectations about future prices change.
B) the price of the good changes.
C) the cost of producing the good changes.
D) prices of substitutes in production change.

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Indicate whether each of the following situations would shift the supply curve to the left, to the right, or not at all. a.an increase in the number of firms in the market b.an increase in the current price of the product c.a decrease in productivity d.an increase in the expected future price of a product e.a decrease in the price of an input _____________________________________________________________________________________________ _____________________________________________________________________________________________

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a. shift to the righ...

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If a demand curve shifts to the left, then:


A) demand has increased.
B) quantity demanded has increased.
C) demand has decreased.
D) quantity demanded has decreased.

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Figure 3.2 Figure 3.2 -Refer to Figure 3.2. An increase in the number of firms in the market would be represented by a movement from: A) A to B. B) B to A. C) S₁ to S₂. D) S₂ to S₁. -Refer to Figure 3.2. An increase in the number of firms in the market would be represented by a movement from:


A) A to B.
B) B to A.
C) S₁ to S₂.
D) S₂ to S₁.

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How does the decreasing use of traditional cameras affect the market for traditional camera film?


A) The demand curve for traditional camera film shifts to the right.
B) The quantity of traditional camera film demanded decreases.
C) The quantity of traditional camera film demanded increases.
D) The demand curve for traditional camera film shifts to the left.

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Corn chips and salsa are complements. If the price of salsa decreases, the demand for corn chips will increase.

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Figure 3.1 Figure 3.1 -Refer to Figure 3.1. If the product represented is an inferior good, an increase in income would be represented by a movement from: A) A to B. B) B to A. C) D₁ to D₂. D) D₂ to D₁. -Refer to Figure 3.1. If the product represented is an inferior good, an increase in income would be represented by a movement from:


A) A to B.
B) B to A.
C) D₁ to D₂.
D) D₂ to D₁.

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How is the market for corn (a substitute for wheat) affected by a positive technological change in the production of disease-resistant wheat caused the price of wheat to fall, holding everything else constant?


A) The supply of corn would decrease and the equilibrium price of corn would increase.
B) The demand for corn would increase and the equilibrium price of corn would increase.
C) The demand for corn would decrease because consumers could afford to buy less wheat and less corn.
D) The demand for corn would increase and the equilibrium price of corn would decrease.

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Last week, the local pay TV company lowered the monthly pay TV price because the city council has granted approval for three new pay TV companies to service the area. How is the market for pay TV services affected by this?


A) There is an increase in the supply of pay TV service.
B) There is a decrease in the demand for pay TV service.
C) There is a decrease in the quantity of pay TV service supplied.
D) There is a decrease in the supply of pay TV service.

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What are the two effects that explain the Law of Demand? Briefly explain each effect. _____________________________________________________________________________________________ _____________________________________________________________________________________________

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The two effects that explain the Law of ...

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An increase in the demand for lobster due to changes in consumer tastes, accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster, will result in:


A) a decrease in the equilibrium quantity of lobster and no change in the equilibrium price.
B) an increase in the equilibrium price of lobster and no change in the equilibrium quantity.
C) an increase in the equilibrium price of lobster; the equilibrium quantity may increase or decrease.
D) a decrease in the equilibrium quantity of lobster; the equilibrium price may increase or decrease.

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In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is a normal good. a.The population increases and the price of inputs increase. b.The price of a complement increases and technology advances. c.The number of firms in the market increases and income increases. d.Price is expected to increase in the future. e.Consumer preference increases and the price of a substitute in production decreases _____________________________________________________________________________________________ _____________________________________________________________________________________________

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a. Price increases; quantity may increas...

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A decrease in the demand for incandescent light bulbs due to changes in consumer tastes, accompanied by a decrease in the supply of incandescent light bulbs as a result of government restrictions, will result in:


A) a decrease in the equilibrium quantity of incandescent light bulbs and no change in the equilibrium price.
B) a decrease in the equilibrium price of incandescent light bulbs and no change in the equilibrium quantity.
C) a decrease in the equilibrium price of incandescent light bulbs; the equilibrium quantity may increase or decrease.
D) a decrease in the equilibrium quantity of incandescent light bulbs; the equilibrium price may increase or decrease.

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