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Exam 3: Demand and Supply

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Question 41

Multiple Choice

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-The above figure shows the market for oil. Because of the development of a new deep sea drilling technology the

A) demand curve shifts from D₁ to D₂ and the supply curve does not shift.
B) demand curve shifts from D₁ to D₂ and the supply curve shifts from S₁ to S₂.
C) demand curve does not shift, and the supply curve shifts from S₂ to S₁.
D) demand curve does not shift, and the supply curve shifts from S₁ to S₂.

E) B) and C)
F) A) and D)

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Question 42

Multiple Choice

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Which of the following statements is CORRECT?

A) When demand increases, both the price and the quantity increase.
B) When demand decreases, the price rises and the quantity decreases.
C) When supply increases, the quantity decreases and the price rises.
D) When supply decreases, both the price and the quantity decrease.

E) B) and C)
F) B) and D)

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Question 43

Essay

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-The above table gives the demand and supply schedules for cat food. If the price is $1.00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price? If there is a shortage, how much is the shortage? If there is a surplus, how much is the surplus? If $3.00 is the equilibrium price, what is the equilibrium quantity?

In 2014, the price of peanuts was rising, which lead peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. In the current market for peanut butter, the price rises and the quantity increases. This set of results means that

An increase in technology will shift the good's supply curve rightward.

Which of the following is NOT one of the factors that influences the supply of a product?

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are a normal good?

A substitute is a good

Growers expect that the price of a bushel of wheat will increase in one month. This belief results in

-Consider the demand curves for soft drinks shown in the figure above. A movement from point a to point c represents

-The above figures show the market for gasoline. Which figure shows the effect of the end of a nine month strike by workers at all U.S. oil refineries?

-In the above figure, if D₂ is the original demand curve for a normal good and income decreases, which price and quantity might result?

-In the above figure, if the price is $8 then there is a

Flights to Paris are a normal good and people's incomes rise. At the same time, the price of jet fuel rises. The equilibrium price of a flight to Paris ________ and the equilibrium quantity of flights to Paris ________.

-The above figures show the market for hamburger meat. Which figure(s) shows the effect of a new report by the U.S. Surgeon General that beef consumption is healthier than previously believed?

The number of firms producing computer memory chips decreases. As a result, the price of a memory chip ________ and the quantity of memory chips ________.

-The above table shows the demand schedule and supply schedule for chocolate chip cookies. What is the equilibrium quantity and equilibrium price for chocolate chip cookies?

When income increases, the demand curve for X shifts rightward and the demand curve for Y shifts leftward. These shifts mean that

All grapefruit juice producers have decided to blend tangerine juice with the grapefruit juice. This blend results in a higher cost of production, but studies show that consumers prefer the taste of the blend to straight grapefruit juice. What will happen to the equilibrium price and quantity of the new "blended" grapefruit juice now that it costs more to produce but consumers like it better?

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a technological advance increases the quantity of disks supplied at each price by 25 million. What is the new equilibrium price and the new equilibrium quantity of Blu-rays?