Exam 3: Supply and Demand

FIGURE 3-2 -Refer to Figure 3-2. As a result of the decrease in donut prices at Yum Yum Donuts, what do the managers at Krispy Kreme discover about the demand for their donuts?

FIGURE 3-4 -Refer to Figure 3-4. What does a change from Point A to Point B represent?

FIGURE 3-1 -Refer to Figure 3-1. Beginning on D₁, what would a shift to D₀ indicate?

FIGURE 3-3 -Refer to Figure 3-3. The University Theatre faces market demand curve D₀ and has begun charging $10, up from $5, for tickets for Friday and Saturday night shows. What will students do as a result?

Is it possible for a BMW to be an inferior good? Explain.

In the three months before a $1 per pack cigarette tax took effect in Ontario, smokers bought 175 million more cigarettes than during the same period a year earlier. What explains this behaviour by consumers?

Why are economists more interested in relative prices rather than money prices?

When a demand schedule is drawn in a graph, which of the following statements best describes the graph?

What would happen to demand if consumers expect the price of a good to rise in the near future?

If a product's price increases, what happens to quantity?

Farm land can be used to produce either cattle or wheat. If the demand for cattle increases, what will happen in the market for wheat?

Which of the following factors will NOT affect the supply of shoes?

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

Whenever the price of Good A decreases, the demand for Good B increases. What do Goods A and B appear to be?

Technological advances in recycling make it possible to produce a greater quantity of paper from a given quantity of recycled newspapers. What is the likely impact on the supply curve for paper?

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

Increasing opportunity costs is one explanation for the law of supply.

Which of the following would most likely cause a reduction in the supply of Nintendo video games?

Steel producers offer to sell steel to Canadian auto producers at a much lower price than in the past. What would one expect to be the result of this?

Which of the following is NOT a characteristic of competitive markets?