Supply and Demand: Quantitative Analysis quiz #1 Flashcards
Supply and Demand: Quantitative Analysis quiz #1
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What are the determinants of supply? Determinants of supply include input prices, technology, number of sellers, expectations, and government policies such as taxes and subsidies. A decrease in the prices of inputs will cause which of the following to occur in the short run? A decrease in input prices will increase supply, shifting the supply curve to the right. What is the difference between supply and quantity supplied? Supply refers to the entire relationship between price and quantity supplied, while quantity supplied is the specific amount offered at a particular price. Which of the following is not held constant in a supply schedule? Price is not held constant in a supply schedule; it varies to show how quantity supplied changes. How do the forces of supply and demand affect the sale of ticket prices? Supply and demand determine ticket prices; if demand exceeds supply, prices rise, and if supply exceeds demand, prices fall until equilibrium is reached. Which of the following will cause a change in the quantity of chocolate chip cookies supplied? A change in the price of chocolate chip cookies will cause a change in the quantity supplied. How do changing prices affect supply and demand? Changing prices cause movements along the supply and demand curves, affecting the quantity supplied and demanded. The law of supply declares which of the following? The law of supply states that, all else equal, an increase in price leads to an increase in quantity supplied. What is an increase in competition likely to do to the demand? An increase in competition among sellers typically increases supply, which can lower prices and affect demand. How does a decrease in input costs affect suppliers? A decrease in input costs allows suppliers to produce more at each price, increasing supply. Which factor would most likely cause the supply of a company's product to increase? A technological improvement or a decrease in input prices would most likely increase supply. Which of the following factors is most likely to lower the price of a product? An increase in supply or a decrease in demand is most likely to lower the price of a product. In what two ways can a supply curve be read? A supply curve can be read as the quantity supplied at each price or the minimum price at which suppliers will offer each quantity. Which of the following is a supply factor which can change supply and demand projections? Input prices are a supply factor that can change supply and affect supply and demand projections. A decrease in the price of a good would A decrease in the price of a good would decrease the quantity supplied, causing movement down the supply curve. The shift from DB to DA in the market for potato chips could be caused by A shift from one supply curve to another (DB to DA) could be caused by a change in a non-price determinant, such as lower input costs or improved technology. When there is a change in a non-price determinant of supply: The entire supply curve shifts, either to the right (increase) or left (decrease). A change in a nonprice determinant of supply will: A change in a nonprice determinant of supply will shift the supply curve. The amount of a good that sellers are willing and able to supply at a given price This is called the quantity supplied. When artists pass away, the supply of their paintings most likely becomes The supply of their paintings becomes fixed or perfectly inelastic, as no more can be produced. If a nonprice determinant of supply causes an increase in supply: The supply curve shifts to the right, leading to a higher quantity supplied at each price. Consider the market for cheese. If the price of milk increases, what will be the consequences? An increase in the price of milk (an input) will decrease the supply of cheese, shifting the supply curve to the left. Which of the following events show an increase in supply? A technological improvement or a decrease in input prices shows an increase in supply. Which of these is the most likely to create a shortage of an item? A price set below equilibrium (price ceiling) is most likely to create a shortage. An increase in the price of oranges would lead to An increase in the price of oranges would lead to an increase in the quantity supplied of oranges.