Principles of Economics

A supply schedule is a table that shows the relationship between

• price and quantity supplied.

• input costs and quantity supplied.

• quantity demanded and quantity supplied.

• profit and quantity supplied.

“Other things equal, when the price of a good rises, the quantity supplied of the good also rises, and when the price falls, the quantity supplied falls as well.” This relationship between price and quantity supplied

• is referred to as the law of supply.

• applies only to a few goods in the economy.

• is represented by a downward-sloping supply curve.

• All of the above are correct.

Suppose there are six bait and tackle shops that sell worms in a lakeside resort town in Minnesota. If we add the respective quantities that each shop would produce and sell at each of the six bait and tackle shops when the price of worms is $2 per bucket, $2.50 per bucket, and $3 per bucket, and so forth, we have found the

• market demand curve.

• surplus or shortage depending on market conditions.

• equilibrium curve.

• market supply curve.

If the demand for a good falls when income falls, then the good is called a(n)

• normal good.

• regular good.

• luxury good.

• inferior good.

When it comes to people's tastes, economists generally believe that

• tastes are based on forces that are well within the realm of economics.

• tastes are based on historical and psychological forces that are beyond the realm of economics.

• tastes can only be studied through well-constructed, real-life models.

• because tastes do not directly affect demand, there is little need to explain people's tastes.

If something happens to alter the quantity supplied at any given price, then

• we move along the supply curve.

• the supply curve shifts.

• the supply curve becomes steeper.

• the supply curve becomes flatter.

If buyers today become more willing and able than before to purchase larger quantities of stand up paddle boards (SUPs) at each price of SUPs, then

• we will observe a movement downward and to the right along the demand curve for SUPs.

• the demand curve for SUPs will shift to the right.

• we will observe a movement upward and to the left along the demand curve for SUPs.

• the demand curve for SUPs will shift to the left.

At the equilibrium price, the quantity of the good that buyers are willing and able to buy

• is greater than the quantity that sellers are willing and able to sell.

• exactly equals the quantity that sellers are willing and able to sell.

• is less than the quantity that sellers are willing and able to sell.

• Either a) or c) could be correct.

In a market economy, supply and demand are important because they

• are direct policy tools used by government agencies to regulate the economy.

• illustrate when an market is in equilibrium, but they are not helpful when a market is out of equilibrium.

• can be used to predict the impact on the economy of various events and policies.

• All of the above are correct.

Suppose that when the price of a 16 oz. to-go cup of gourmet coffee is $4.25, students purchase 750 cups per day. If the price decreases to $3.75 per cup, which of the following is the most likely outcome?

• Students would purchase fewer than 750 cups per day.

• Student would continue to purchase 750 cups per day.

• Students would purchase more than 750 cups per day.

• We do not have enough information to answer this question.