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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
