Question 1

Draw a hypothetical example of the demand curve for gasoline and explain it.

Accepted Answer

The demand curve shows the negative relationship between prices and the quantity demanded. As the price of gasoline falls the quantity of gasoline demanded rises.

Question 2

What relationship is shown by a demand curve?

Accepted Answer

Since price and quantity demanded are inversely related, the demand curve is downward sloping.

Question 3

List three things that can cause an increase in demand. Be specific.

Accepted Answer

Student responses will vary but may include: (1.) An increase in income (normal good). (2.) A decrease in income (inferior good). (3.) An increase in the price of a substitute good. (4.) A decrease in the price of a complementary good. (5.) A change in preferences (the product is more desirable than before).

Question 4

Some baseball parks have a "7th Inning Stretch" where beer, hotdogs and other food
items are offered for sale at a lower price. What economic concept is being used by the baseball park to justify this practice? If it is successful at selling more food and
drink with this practice why don't they lower prices at the beginning of the game?

Accepted Answer

The economic concept is the law of dimin

Question 5

Each year Apple Computers produces a new line of IPods with greater storage capacity and more features. Sales continue to soar even though the prices each year
rise as well. Is this a refutation of the law of demand or is there something else going on here that doesn't meet the eye?

Accepted Answer

The law of demand states that there will

Question 6

What types of things are sold in input or factor markets? Who are the buyers and
sellers in these markets?

Accepted Answer

Resources used to produce goods and serv

Question 7

Explain how the market supply curve is derived. Does the law of supply apply to the
market supply curve?

Accepted Answer

The market supply curve for a good can b

Question 8

Suppose the U.S. economy enters a recession and incomes fall. What will happen to
the equilibrium prices and quantities of normal goods? Would your answer be the same if you were discussing inferior goods? Why or why not?

Accepted Answer

If incomes fall, the demand for normal g

Question 9

Even though household have wide-ranging preferences, discuss some of the things
that all households have in common including their constraints.

Accepted Answer

All households have limited income and a

Question 10

Explain how an increase in the price of leather brought about by shift in tastes may
lead to an increase in the supply of beef.

Accepted Answer

An increase in the price of leather will

Question 11

Define what a firm is and its role in the market.

Accepted Answer

The firm is an organization th

Question 12

Below are the demand curves for CDs for two individuals: Bob and Tom.   Assume that Bob and Tom are the only two buyers in the market for CDs. Draw the market demand curve.

Accepted Answer

Market demand is the sum of th

Question 13

What is a demand schedule? Provide an example and explain it.
It is a table showing how much of a given product a household would be willing to buy at different prices. Below is an example of a demand schedule. As the price falls the quantity demanded rises.

Accepted Answer

The answer of What is a demand schedule? Provide an...

Question 14

Explain the difference between a change in supply and a change in quantity supplied.

Accepted Answer

A change in supply is represented by a s

Question 15

When the price of good X rises, the demand for good Y falls. Explain what this
relationship implies about the two goods.

Accepted Answer

Goods X and Y must be compleme

Question 16

Explain what an entrepreneur is and its function.

Accepted Answer

An entrepreneur is a person wh

Question 17

When the price of good X rises, the demand for good Y rises. Explain what this
relationship implies about the two goods.

Accepted Answer

Goods X and Y must be substitu

Question 18

When the price of compact disc players decreases, the demand for compact discs
rises while the demand for cassette tapes decreases. What does this imply about the relationship between compact disc players, compact discs, and cassette tapes?

Accepted Answer

Compact disc players and compa

Question 19

Show graphically the effect of an increase in the wage paid to autoworkers on the
supply of new cars.

Accepted Answer

An increase in wage paid to au

Question 20

Explain the law of demand. What does it imply about the shape of the demand curve?

Accepted Answer

The law of demand describes the inverse

Draw a hypothetical example of the demand curve for gasoline and explain it.

What relationship is shown by a demand curve?

List three things that can cause an increase in demand. Be specific.

Each year Apple Computers produces a new line of IPods with greater storage capacity and more features. Sales continue to soar even though the prices each year rise as well. Is this a refutation of the law of demand or is there something else going on here that doesn't meet the eye?

What types of things are sold in input or factor markets? Who are the buyers and sellers in these markets?

Explain how the market supply curve is derived. Does the law of supply apply to the market supply curve?

Suppose the U.S. economy enters a recession and incomes fall. What will happen to the equilibrium prices and quantities of normal goods? Would your answer be the same if you were discussing inferior goods? Why or why not?

Even though household have wide-ranging preferences, discuss some of the things that all households have in common including their constraints.

Explain how an increase in the price of leather brought about by shift in tastes may lead to an increase in the supply of beef.

Define what a firm is and its role in the market.

Below are the demand curves for CDs for two individuals: Bob and Tom. Assume that Bob and Tom are the only two buyers in the market for CDs. Draw the market demand curve.

What is a demand schedule? Provide an example and explain it. It is a table showing how much of a given product a household would be willing to buy at different prices. Below is an example of a demand schedule. As the price falls the quantity demanded rises.

Explain the difference between a change in supply and a change in quantity supplied.

When the price of good X rises, the demand for good Y falls. Explain what this relationship implies about the two goods.

Explain what an entrepreneur is and its function.

When the price of good X rises, the demand for good Y rises. Explain what this relationship implies about the two goods.

When the price of compact disc players decreases, the demand for compact discs rises while the demand for cassette tapes decreases. What does this imply about the relationship between compact disc players, compact discs, and cassette tapes?

Show graphically the effect of an increase in the wage paid to autoworkers on the supply of new cars.

Explain the law of demand. What does it imply about the shape of the demand curve?

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Social Choice

Filters

Exam 3: Demand, Supply, and Market Equilibrium

Draw a hypothetical example of the demand curve for gasoline and explain it.

What relationship is shown by a demand curve?

List three things that can cause an increase in demand. Be specific.

Each year Apple Computers produces a new line of IPods with greater storage capacity and more features. Sales continue to soar even though the prices each year rise as well. Is this a refutation of the law of demand or is there something else going on here that doesn't meet the eye?

What types of things are sold in input or factor markets? Who are the buyers and sellers in these markets?

Explain how the market supply curve is derived. Does the law of supply apply to the market supply curve?

Suppose the U.S. economy enters a recession and incomes fall. What will happen to the equilibrium prices and quantities of normal goods? Would your answer be the same if you were discussing inferior goods? Why or why not?

Even though household have wide-ranging preferences, discuss some of the things that all households have in common including their constraints.

Explain how an increase in the price of leather brought about by shift in tastes may lead to an increase in the supply of beef.

Define what a firm is and its role in the market.

Below are the demand curves for CDs for two individuals: Bob and Tom. Assume that Bob and Tom are the only two buyers in the market for CDs. Draw the market demand curve.

What is a demand schedule? Provide an example and explain it. It is a table showing how much of a given product a household would be willing to buy at different prices. Below is an example of a demand schedule. As the price falls the quantity demanded rises.

Explain the difference between a change in supply and a change in quantity supplied.

When the price of good X rises, the demand for good Y falls. Explain what this relationship implies about the two goods.

Explain what an entrepreneur is and its function.

When the price of good X rises, the demand for good Y rises. Explain what this relationship implies about the two goods.

When the price of compact disc players decreases, the demand for compact discs rises while the demand for cassette tapes decreases. What does this imply about the relationship between compact disc players, compact discs, and cassette tapes?

Show graphically the effect of an increase in the wage paid to autoworkers on the supply of new cars.

Explain the law of demand. What does it imply about the shape of the demand curve?

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Social Choice

Filters