What would happen to the demand for peanuts if an insect destroyed half the peanut crop?

income effect lower demand for peanuts

If supply were to suddenly decrease, what would be the result?

increased price, decreased quantity

Which of the following is generally true after a shift in supply or demand?

equilibrium is generally restored

What would likely happen to oranges as a result of a severe freeze?

disequilibrium due to decreased supply

If the price of toothpaste increased, what would happen to the elasticity of toothpaste

inelastic b/c it's a low cost necessity

How does a government subsidy for rice farmers affect the market for rice?

increase supply by reducing farmers' costs

Government regulation of a factory with more pollution checks would affect supply by

decrease supply w/ higher production cost

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Demand & Supply Review

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Questions 15

Answers

1
What would happen to the demand for peanuts if an insect destroyed half the peanut crop?
market equilibrium, stable prices for all goods
income effect lower demand for peanuts
law of demand, lower prices for all goods
supply shock, higher consumption of peanuts
2
If supply were to suddenly decrease, what would be the result?
increased price and quantity
increased price, decreased quantity
decreased price, increased quantity
decreased price and quantity
3
Which of the following is generally true after a shift in supply or demand?
demand falls as prices rise
supply rises with demand
equilibrium moves down
equilibrium is generally restored
4
How are price ceilings and price floors similar
both show input changes in demand
both involve a maximum price
both are government price supports
both show disequilibrium
5
______________ refers to the change in output by hiring one additional worker.
increasing marginal returns
marginal product of labor
law of increasing costs
diminishing marginal returns
6
For most products and services, increased prices results in
demand for more products
demand for fewer products
reduced demand for substitutes
increased demand for complements
7
Which of the following is generally true after an increase in demand?
price increases, quantity decreases
price decreases quantity increases
price and quantity increases
price and quantity decrease
8
What would likely happen to oranges as a result of a severe freeze?
more sellers enter the market
disequilibrium due to decreased supply
consumers would demand more fruit
supply curve would shift right
9
Which of these would happen due to a successful ad campaign for iPhone 8?
supply curve shifts left
demand curve shifts left
demand curve shifts right
supply curve shifts right
10
A big series of outdoor concerts is set for fall. Why will stores increase the supply of goods?
response to profit incentive
response to falling equilibrium price
response to supply shock
expected surplus
11
An increase in the price of flashlights results in a decrease in the demand for batteries. They
are substitutes
are complements
are demand elastic
are inelastic
12
Which of the following would be considered a complement to salsa in the context of demand?
tortilla chips
bolts
screw drivers
peanuts
13
If the price of toothpaste increased, what would happen to the elasticity of toothpaste
elastic b/c there are no substitutes
Inelastic b/c it's a luxury
inelastic b/c it's a low cost necessity
inelastic b/c it's a large portion of a budget
14
How does a government subsidy for rice farmers affect the market for rice?
decrease supply by encouraging farmers to grow another crop
decrease supply by increasing farmers' production costs
increase supply by reducing farmers' costs
increase supply by increasing demand for rice
15
Government regulation of a factory with more pollution checks would affect supply by
decrease supply w/ higher production cost
increased supply w/ subsidy cost
decrease supply w/ higher transportation cost
increased supply w/ more efficeincy

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