Supply & Demand S20

Almond Pest Destroys 50% of Crop: Prices Expected to Double

For a consumer who loves almonds, but has a limited budget, what is this new headline likely to trigger?

• supply shock leading to higher consumption of almonds

• income effect leading to lower demand for several goods

• law of demand leading to lower prices for all goods

• market equilibrium leading to stable prices for almonds

Which of the following describes the relative elasticity in demand for toothpaste in a period of economic change?

• Demand is inelastic because it is a luxury item.

• Demand is elastic because there are no substitutes.

• Demand is inelastic because it makes up a large share of most people’s budget.

• Demand is inelastic because it is a low-cost necessity.

Which of the following price / output pairs would appear on the supply schedule used to create the individual supply curve below?

• $1.00 / 100

• $5.00 / 250

• $3.00 / 2,000

• $5.00 / 350

What is the marginal product of labor that results from hiring the seventh worker?

• one beanbag per hour

• three beanbags per hour

• five beanbags per hour

• seven beanbags per hour

If you used this schedule to graph the demand for watermelons, where would the equilibrium point appear?

• at a price of $1.00 and a quantity supplied of 300

• at a price of $2.00 and a quantity supplied of 150

• at a price of $3.00 and a quantity supplied of 200

• at a price of $4.00 and a quantity supplied of 250

What would LIKELY happen to the market for oranges like these as a result of a severe frost in the South?

• The market would be thrown into disequilibrium.

• Many new sellers would enter the market.

• Consumers would demand more of the fruit.

• The supply curve would shift to the right.

Which of the following BEST describes equilibrium?

• the point at which quantity supplied and demanded should remain no matter what happens in the market

• a point on the demand curve that shows the highest market price for a good

• a point on the supply curve that shows the greatest possible output

• a point that moves continually in response to market changes in quantity supplied and demanded

In a market-based economy, consumers rely on prices to help them

• choose among similar products.

• decide which products suit their lifestyle.

• discover the latest high-technology gadgets.

• find clothing that fits them the best.

A huge, weeklong series of outdoor concerts is scheduled for early summer. Why will local stores LIKELY increase their supplies of consumer goods before the concert?

• in response to the falling equilibrium price

• in response to the expected surplus

• in response to the profit incentive

• in response to the supply shock

How many slices of pizza per day would you expect a pizzeria in this market to sell if it were pricing its slices at $3.50?

• 150

• 175

• 200

• 225