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Exam 3: Demand and Supply

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Question 231

Multiple Choice

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Ticket scalpers at the NCAA basketball tournament last year charged prices high above the printed ticket price. This observation is evidence of

A) the tournament getting too much television exposure.
B) a shortage at printed ticket prices.
C) the tournament not being televised.
D) a surplus at printed ticket prices.

E) B) and D)
F) None of the above

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Question 232

Multiple Choice

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Gruel is an inferior good. Hence, a decrease in peopleʹs incomes

A) decreases the quantity of gruel supplied.
B) shifts the demand curve for gruel leftward.
C) shifts the demand curve for gruel rightward.
D) shifts the supply curve of gruel leftward.

E) B) and C)
F) None of the above

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Question 233

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-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A movement to point d would be the result of

$\begin{array} { | l | l | l | } \hline \begin{array} { l } \text { Price } \\\text { (dollars per } \\\text { pound of } \\\text { cat food) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { demanded } \\\text { (tons of cat } \\\text { food per } \\\text { year) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { supplied } \\\text { (tons of cat } \\\text { food per } \\\text { year) }\end{array} \\\hline 1.00 & 52 & 15 \\\hline 1.50 & 46 & 26 \\\hline 2.00 & 43 & 34 \\\hline 2.50 & 40 & 30 \\\hline 3.00 & 35 & 44 \\\hline\end{array}$ -The above table gives the demand and supply schedules for cat food. If the supply increases by 20 tons at every price, what is the new equilibrium price and quantity?

Your friend Tony opened a pizzeria. You helped him to advertise his pizza, which is in fact the best pizza in town. As a result, the demand for Tonyʹs pizza increases and your friend, noticing lines of customers, raises the price of his pizza. But then he fears that the higher price will cause demand to decline, which will cause the price to drop. Is Tony right in his analysis of the situation? Explain.

When peopleʹs incomes increase, the demand for a good increases. The good is called

Which of the following statements is correct?

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a ____________in the market and the price will _________.

When does a shortage occur?

-In the above figure, if D₂ is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?

If shoes rise in price, the demand curve for shoes ___________and the quantity of shoes demanded________

-The above figures show the market for gasoline. Which figures) shows the effect of a new U.S. tax on oil that suppliers must pay?

Which of the following increases the equilibrium price of a used car and decreases the equilibrium quantity?

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of the tomato sauce used to produce pizza?

Which of the following shifts the supply curve for gasoline rightward?

For consumers, goods A and B are complementary goods. The cost of a resource used in the production of A decreases. As a result,

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bag of corn chips?

Which of the following explains why supply curves slope upward?

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. An increase in the price of a soda results in a movement to a point such as

If the demand and supply curves are described by the following equations P=a-bQ and P=c+dQ, respectively, the equilibrium price is P*=ad+bc)/b+d) .