Exam 3: Supply and Demand

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

FIGURE 3-5 -Refer to Figure 3-5. What does a change from Point A to Point E represent?

The law of supply is a federal regulation that prevents monopolies from charging too much.

If an increase in the price of Good X causes a decrease in the demand for Good Y, what can we conclude?

As consumers experience an increase in income, the demand for steak increases and the demand for macaroni and cheese decreases. What can we determine from this information?

According to the law of supply, what would we predict will occur when the price of a good increases?

Which of the following would NOT cause a change in the demand for cheese?

Other things constant, what will be the effect of a decrease in the price of fertilizer on the market for wheat?

Which of the following statements about the demand for a normal good is the most accurate?

When the price of corn falls, the market supply of wheat (which can be grown using the same land) is likely to increase.

FIGURE 3-2 -Refer to Figure 3-2. Two donut chains in your town are battling for customers. The manager of the Yum Yum Donut Shop, facing demand curve D₁, has changed donut prices from P₀ to P₁. What do the customers do as a result?

FIGURE 3-3 -Refer to Figure 3-3. Everyone has been raving about the newest summer blockbuster film. You decide to see a movie even though ticket prices have risen to $10 per ticket. You are not alone, as many students are waiting in line at the theatre, shifting the demand curve to D₁. How many tickets are the theatre owners now selling?

Assuming that Chinese food and Thai food are substitutes, which of the following will result if P. F. Chang's Chinese Restaurant reduces its prices?

A demand curve shows the relationship between price and quantity demanded, "other things remaining constant." Which of the following is NOT included in the other things that remain constant?

Other things constant, what effect will an increase in the price of beef have?

If producers expect the price of a good to rise in the near future, what will be the effect on supply?

The law of supply suggests that a decrease in the price of a product will increase the quantity supplied for that product.

Why do supply curves generally slope upward?

Vodka and whiskey are considered by consumers to be substitutes. What is the likely economic impact of a decrease in the price of whiskey?

What does a supply schedule show?