978-0133460629 Chapter 04 Part 12

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12) The above igures show the market for HD televisions. If the price of the LCD screens

used to produce these televisions falls, which igure shows the efect of this change in

price?

A) Figure A

B) Figure B

C) Figure C

D) Figure D

E) None of the igures represent this change.

Skill: Level 3: Using models

Section: Integrative

Status: Old

AACSB: Analytical thinking

13) The above igures show the market for HD televisions. If there are severe earthquakes

that destroy a signiicant number of HD television manufacturing plants, which igure

shows the efect of the earthquake?

A) Figure A

B) Figure B

C) Figure C

D) Figure D

E) None of the igures represent this change.

Skill: Level 3: Using models

Section: Integrative

Status: Old

AACSB: Analytical thinking

14) The above igures show the market for HD televisions. If more irms start to produce

HD televisions , which igure shows the efect of this change?

A) Figure A

B) Figure B

C) Figure C

D) Figure D

E) None of the igures represent this change.

Skill: Level 3: Using models

Section: Integrative

Status: Old

AACSB: Analytical thinking

111

15) The above igures show the market for HD televisions. If the technology used to

produce these televisions advances so that productivity increases, which igure shows the

efect of this change?

A) Figure A

B) Figure B

C) Figure C

D) Figure D

E) None of the igures represent this change.

Skill: Level 3: Using models

Section: Integrative

Status: Old

AACSB: Analytical thinking

16) Consider the market for leather shoes. If producers believe the price of leather shoes

will increase next month, today

A) the supply curve for leather shoes shifts rightward.

B) the supply curve for leather shoes shifts leftward.

C) there is a movement along the supply curve for leather shoes.

D) the equilibrium price of leather shoes falls.

E) the equilibrium quantity of leather shoes increases.

Skill: Level 3: Using models

Section: Integrative

Status: Old

AACSB: Relective thinking

17) Consider the market for peanut butter. If there is an increase in the price of bread (a

complement for peanut butter) along with a drought in peanut growing areas, the

A) equilibrium quantity of bread increases.

B) equilibrium quantity of peanut butter deinitely decreases.

C) equilibrium quantity of peanut butter might increase or might decrease.

D) equilibrium price of peanut butter deinitely rises.

E) equilibrium price of peanut butter deinitely falls.

Skill: Level 3: Using models

Section: Integrative

Status: Old

AACSB: Analytical thinking

112

18) Consider the market for peanut butter. If there is a decrease in the price of deli turkey

slices (a substitute in consumption for peanut butter) along with a decrease in the price of

peanut brittle (a substitute in production for peanut butter), the

A) equilibrium price of peanut butter deinitely falls.

B) equilibrium quantity of peanut deinitely decreases.

C) equilibrium price of peanut butter might rise or fall.

D) equilibrium quantity of peanut butter deinitely increases.

E) equilibrium price of peanut butter deinitely rises.

Skill: Level 3: Using models

Section: Integrative

Status: Old

AACSB: Analytical thinking

19) Millions of people from Mexico have migrated to the United States. This has reduced

the supply of labor in Mexico and increased the supply of labor in the United States.

Assume that the demand for labor in Mexico and the United States is unchanged. Then

wages in the United States ________ and wages in Mexico ________.

A) fall; rise

B) rise; rise

C) rise; do not change

D) fall; fall

E) do not change; fall

Skill: Level 4: Applying models

Section: Integrative

Status: Old

AACSB: Analytical thinking

4.5 Essay: Demand

1) What is the law of demand?

Skill: Level 1: Deinition

Section: Checkpoint 4.1

Status: Old

AACSB: Relective thinking

113

2) What leads to a decrease in the quantity demanded of a good or service?

Skill: Level 1: Deinition

Section: Checkpoint 4.1

Status: Old

AACSB: Relective thinking

3) Explain the diference between a change in demand and a change in quantity demanded.

What leads to each of these changes?

Skill: Level 1: Deinition

Section: Checkpoint 4.1

Status: Old

AACSB: Written and oral communication

4) List the factors that change demand and shift the demand curve. Tell what happens to

demand and the demand curve when there is an increase in the factor.

Skill: Level 2: Using deinitions

Section: Checkpoint 4.1

Status: Old

AACSB: Written and oral communication

114

5) Computers are a complement to computer software. Suppose the price of a computer

falls. How does this fall in price afect the demand for computer software and the demand

curve for computer software?

Skill: Level 3: Using models

Section: Checkpoint 4.1

Status: Old

AACSB: Written and oral communication

6) What is the diference between a normal good and an inferior good? Give an example of

each.

Skill: Level 2: Using deinitions

Section: Checkpoint 4.1

Status: Old

AACSB: Written and oral communication

7) Suppose Katie, Mark, and Bobby are the only consumers in the market for ice cream.

Using the demand schedules in the table above, what is the market demand curve for ice

cream?

Skill: Level 3: Using models

Section: Checkpoint 4.1

Status: Old

AACSB: Analytical thinking

8) Soft drinks and milk are substitutes for consumers. Draw a graph showing the efect of

an increase in the price of milk on the demand for soft drinks.

115

Skill: Level 3: Using models

Section: Checkpoint 4.1

Status: Old

AACSB: Analytical thinking

116

9) Soft drinks are a normal good. Draw a graph showing the efect of an increase in income

on the demand for soft drinks.

Skill: Level 3: Using models

Section: Checkpoint 4.1

Status: Old

AACSB: Analytical thinking

4.6 Essay: Supply

1) What leads to a decrease in the quantity supplied of a good or service?

Skill: Level 1: Deinition

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

117

2) What is the diference between quantity supplied and supply?

Skill: Level 1: Deinition

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

3) List the factors that change supply and shift the supply curve. Tell what happens to

supply and the supply curve when there is an increase in the factor.

Skill: Level 2: Using deinitions

Section: Checkpoint 4.2

Status: Old

AACSB: Written and oral communication

4) What are substitutes in production?

Skill: Level 1: Deinition

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

5) Suppose that the number of companies selling computer software decreases. How does

this change afect the supply of computer software and the supply curve of computer

software?

Skill: Level 3: Using models

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

118

6) Suppose that the productivity used to produce computers advances. How does this

change afect the supply of computers and the supply curve of computers?

Skill: Level 3: Using models

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

7) The table above indicates how many thousands of containers of ice cream three diferent

companies are willing to produce at diferent prices. Does this information relect the law

of supply? Why or why not?

Skill: Level 2: Using deinitions

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

8) The table above shows supply schedules for the two nail salons in town, Nancy‘s Nails

and Fancy Nails. What is the market supply of manicures?

Skill: Level 2: Using deinitions

Section: Checkpoint 4.2

Status: Old

AACSB: Analytical thinking

4.7 Essay: Market Equilibrium

1) When does a shortage occur?

119