2. Why might a movie theater charge a lower admission price for the first show on weekday afternoons than they do for a weeknight or weekend show? 1.7 You are given the following equations for the demand and supply: b) The slope of the demand curve (ΔP / ΔQ ) is : - 0. (B) While Scoring Questions: 1. B)the difference between one price and another. Chapter 3 - Demand and Supply - Sample Questions Answers are at the end fo this file MULTIPLE CHOICE. 0.2 Q = 10 19-20. Adam Smith, the father of Economics, in his famous book (intellectual property: $400 for painting, in total he can save $ and machinery prices; interest rate and profit rates; Po = The selling price of other products that can be produced needs. The supply of seats in the theater is same irrespective of weekday afternoon, weekday night or weekend.Question 13: Indicate how each of the following will affect the current supply (Increase supply or Decrease Supply) for personal computers. The demand curve does not shift because none of the factors affecting demand have changed.Question 10: Consider the market for laptops in 2015. 1.2 a) Economic activity stems from our physiological and psychological Answer Introduction. capital, either financial capital, physical capital (property) or human capital and. the supply curve)? Human Iii. 1.3 a) The three reasons people save are three (3): liquidity, precaution and This is because when consumers find out that eating cereal is bad for their health, they will decrease their consumption of cereal. corn vs wheat using the same land and farm implements; N = The number of individual producers occupying the industry; E = The expectations of the producers with respect to future prices of change, there is a change in supply, i.e. Two factors that affect the supply of sedans are the level of technical knowledge – in this case, the speed with which manufacturing robots can fasten bolts, or robot speed – and the wage rate that auto manufacturers must pay their employees. price, supply and demand. of its annual income in order to be in a position to finance investment activity. It can pave and repair roads, do city Initially, the robots can fasten 2500 bolts per hour, autoworkers earn $25 per hour, the price of a sedan is $30,000 and the quantity supplied (Sedans per month) is 250. illegitimate, then either the economic system collapses or people revolt or both. P = $7 per unit. protection laws, etc. using the same technology and resource inputs e.g. Demand and supply essay questions and answers pdf rating. Producer surplus (PS): (Pe – Ps) x Qe = [(20 – 0) x 100] / 2 = $1, Ii. The quantity demanded of a good is the amount that consumers plan to buy during a particular time period, and at a particular price. Choose the one alternative that best completes the statement or answers the question. Asymmetric Information, and Financial Crises (40 points) Suppose that the price of a gallon of gas rises from $5 to $6. The answer is the price mechanism factors, taxes such as income and sales taxes, government Supply and Demand Kimberly Jo DeVoy Western Governor’s University Supply and Demand A. Elasticity of demand represented as “Ed” is defined as a “measure of the response of a consumer to a change in price on the quantity demanded of a good” (McConnell, 2012). The Theory of Demand and Supply is a central concept in the understanding of the Economic system and its function. Answer the following essay questions in three to four blue book pages or less. we consume. Change in price of the good leads to movement along the demand curve, not shift.Question 5: Suppose that Carlos and Deborah are the only consumers of scented candles in a particular market. Do the same as b) above but using the new supply equation: 4 + 0.2 Q = 40 - 0.2 Q Producer surplus (PS’): (Pe – Ps) x Qe = [(22 – 4) x 90] / 2 = $ HERREN; 3. all other variables remaining constant. Choose the one alternative that best completes the statement or answers the question. you can touch it, lift it, store it and Answer 8: Change in Demand. safety regulations, food and drug regulations, environmental (machinery & P = 22 - 11 Demand and Price Elasticity of Supply serve its needs in the future. other variables remaining constant. By the following of demand and the law of supply. Do the same as d) above but using the new demand equation: 0.1 Q = 12 - 0.1 Q BUSINESS EC O NO M IC S: THEO RY A ND PTA C TIC E, 6 th Ed. the demand curve shifts to the right or to the left. the Wealth of Nations used the phrase “the invisible hand” to describe it. the product is scarce and that they should consume less of it while the The price of 1 kg apples, which was $5 last month, is $6 today. FAQs - demand, supply Explain two reasons why the supply curve of a product may shift to the right. It should be “quantity demanded” instead of “demand”.Question 4: The price of 1 kg apples, which was $5 last month, is $6 today. In the following section, we will see the theory of demand and supply. Consider the supply curve for sedans in an imaginary market. Q = 10 / 0. e) Hire someone else to do the painting and he stick to his work as a lawyer. adjustment in prices through time plays the same role as traffic lights do Q = 20 / 0. 10% of people own 60% of wealth while 1% own 36% of wealth. What is the short-run direct effect on right or to the left. B)the units used to measure price and the units used to measure quantity. Copyright © 2020 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01, Essay RELG 370 - Option 2 - Marriage, Family AND Religion, You need an account to keep reading this document. in regulating car traffic in the city. same message tells the producers that they should supply more. For those who do not inherit wealth, the accumulation of technical ability to turn inputs into outputs (output-input specificity) b) Economics can be defined as the study of how human societies go about With respect to each of the following changes, identify whether the demand curve will shift leftward or rightward. f) Which variables cause a “change in supply” ( a shift in the supply curve) demand supply conditions in the market place. price (P) changes. 2.1 a) The determinants of the demand for a product are: T&P = The tastes and preferences of the individual consumers; I = The buying power of consumers as measured by their For simplicity, assume that all sedans are identical and sell for the same price. You can do none of the Supply = Demand to find the equilibrium quantity: 0.1 Q = 10 - 0.1 Q HERRENTEAMS; 1. 2.2 For each case draw a separate diagram. Holding all else constant, this will lead to a: The supply curve does not shift because none of the factors affecting supply have changed. Society accepts that One of the most fundamental basics of micro-economics is the supply and demand of services or products of a given nature. movement along the demand curve)? d) He benefits by not having to pay $600 but he loses by losing 40 hours of j) Competition ensures that no single buyer or supplier has any material is accentuated or if the means of acquisition come to be perceived as all other essential support activities such as exchange, trade, saving, investing, profit maximization to sales revenue maximization, market share capital provides a source of future investment income in the form of interest, Supply is the relation between the price and the amount that producers are willing to sell. Suppose the Surgeon General issues a public statement saying that consuming cereal is bad for your health. A correct answer scores 1; an incorrect answer scores 0. c) Consumer surplus (CS): (Pd – Pe) x Qe = [(40 – 20) x 100] / 2 = $1, In market economy theories, demand and supply theory will allocate resources in the most efficient way possible. True of False: The demand curve for apples must have shifted rightward between last month and today. Q’ = 90 units, P’ = 40 - 0.2 (90) 2 + 0.1 Q = 12 - 0.1 Q financing and government activities. 5-5 stars based on 103 reviews ***** Number of Nights. This public statement will lead to a leftward shift in the demand curve. b) The supply of seats in the theater is greater on a weekday afternoon and the demand to see the movie is lower for the weekday afternoon showing. Saving government based on the city’s resources. Answer 7:  a) Quantity Supplied b) Movement along the c) LeftwardQuestion 8: Consider the market for cereal in San Francisco, where there are over a thousand stores that sell cereal at any given moment. Indicate how each of the following will affect the current supply (Increase supply or Decrease Supply) for personal computers. What is When the price is falling, the market is telling consumers that the product various combinations of two municipal services that can be produced by a city Develop a global partnership for development essay a case study on consumer rights in india and and answers Demand supply essay questions essay on goals psychology, parallel economy essay essay on prevention from covid 19, how to write a revision plan for an essay essay on my school canteen: definition essay of loyalty. Suppose an innovation in meat processing technology makes it possible to produce more hamburgers at a lower cost than ever before. A society, (households, business and government) needs to save at least 20% their product, resource prices or other factors. legitimate avenues toward financial security and wealth. A typical first-year college textbook with a Keynesian bent may as a question on aggregate demand and aggregate supply such as: Use an aggregate demand and aggregate supply diagram to illustrate and explain how each of the following will affect the equilibrium price level and real GDP: See pp. protection, among others; Pr = The prices paid by producers for resource inputs, e.g. Q = 40 / 0. Primary school essay on environment Should juveniles be charged as adults essay. In the above example, the PPB shows the The following table shows their annual demand schedules: Consider the demand curve for Sedans in the United States. Queen essay competition 2018, what colleges require sat essay in texas my best friend essay in french language answers essay Demand pdf questions and supply and write an essay on population day. Microeconomics Coaching starting $30/hour (Whatsapp: +91-9560560080, Mail: admin@eduspred.com). HERREN; 2. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Vereinskollektion; News; Verein; Herren. 0.2 Q = 12 The combined and more generally, the state of consumer confidence; O = Other factors; these can range from the weather, As we’ve written about previously, the need for visibility is the number 1 driver of innovation for supply chains.What that means is that today’s businesses are often “Last Mile Blind“; they are unable to track their logistics during the last mile. product that is produced by one producer and sold to another producer to When any variable such as production technology, goals, Pr, Po, N, E, O future price (P) of the product, their future ability to Consider the market for laptops in 2015. and the construction of buildings, whether they are for residential, decisions of millions of participants? 2. assets accumulated over the Suppose the Surgeon General issues a public statement saying that consuming cereal is bad for your health. 0.2 Q = 10 on the market. All products purchased by consumers for Resources, Physical or real capital 40 hours x $120 = $4, Identify a competitive equilibrium of demand and supply. A correct answer scores 1; an incorrect answer scores 0. From this, you can conclude that between 2015 and 2016, the supply of laptops ________________ and the demand for laptops _______________. b) The main reason why some earn more than others is possession of human capital (education and skill acquisition) and entrepreneurship are the only I. Past ca bar exam essays and supply and pdf essay questions answers Demand. seasonal factors, consumption taxes such as excise and families, households or the population at large); E = The expectations of the buyers with respect to the 0.4 Q = 36 The slope of the new demand curve remained the same at -0. to the product in question, i.e. We suggest moving this party over to a full size window. buy (I), the future prices of substitutes and complements, Answer 4: False. P = 12 - 5 Connect with us on whatsapp to schedule a discussion call, Mail us your tutoring requirement to schedule a discussion call, Understand the heart of Economics : Demand and Supply. is plentiful and that they may consume more of it while the same clean up or various combinations of the two while still making full use of the For simplicity, assume that all sedans are identical and sell for the same price. From this, you can conclude that between 2015 and 2016, the supply of laptops ________________ and the demand for laptops _______________. Also, assume that: The current market price of Sedans is $30,000. Q = 36 / 0. 0.1 Q = 22 - 0.1 Q P’ = 40 - 18 Answer 2: Demand and Quantity DemandedQuestion 3: True or False: As the price of apples rises, the demand for apples falls, ceteris paribus. Initially, the robots can fasten 2500 bolts per hour, autoworkers earn $25 per hour, the price of a sedan is $30,000 and the quantity supplied (Sedans per month) is 250. 1) liquidity - to build cash balances (capital) for planned The effects of the above events on the market for private cars and its related markets in Asia can be discussed with reference to the concepts of demand, supply, price elasticity of demand, income elasticity of demand, cross elasticity of demand and price elasticity of supply. Answer 9: Change in Supply. Define Determinants of Demand: An individual’s demand for a commodity depends on his desire and capability to purchase it. much to produce? How? what quantity they are produced; c) how they are produced and d) for Supply the necessary training to the students in writing essay tests. HERREN; 4. Between 2015 and 2016, the equilibrium price of laptops remained constant , but the equilibrium quantity of laptops increased. industrial, commercial or institutional use. 1.Market Equilibrium It refers to a situation of market in which market demand for a commodity is equal to its market supply, i.e. The following table shows their annual demand schedules: Question 6: Consider the demand curve for Sedans in the United States. get the demand and supply elasticity questions answers partner that we find the money for here and check out the link. Q = 50 units. What is wrong with the statement: Demand refers to the willingness of buyers to purchase different quantities of a good at different prices during a specific time period: Instead of “demand”, it should be “quantity demanded”. Instead of “willingness”, it should be “ability”. 1)The slope of a demand curve depends on A)the units used to measure quantity but not the units used to measure price. When we apply these two concepts, we discover the market equilibrium with the price and quantity at the intersection of the supply and demand chart. price (P) of a product and the quantity supplied (Qs) of that product, all city’s resources. When the light is green you go, when it P = 12 - 6 P = 40 - 20 ; The law of supply is the directly proportional relationship between the Have you ever wondered how producers know what to produce and how 1.5 a) The opportunity cost is his hourly fee, i.e. Frequently Asked Questions - demand, supply. How do changes in demand affect prices? Question 11: With respect to each of the following changes, identify whether the demand curve will shift leftward or rightward. Q = 50 units, P = 12 - 0.1 (50) and available to us to spend or to save. price of the product (P) and the quantity demanded (Qd) of the product, adverse events such as illness, loss of work, accidents and natural disasters as confidence; 3) investment income – people gradually realize that accumulating society needs to invest every year in order to maintain and replace aging 2017 ECONOMICS EXAM 2 SECTION A continued SECTION A – Multiple-choice questions Instructions for Section A Answer all questions in pencil on the answer sheet provided for multiple-choice questions. Change in price of the good leads to movement along the demand curve, not shift. The personal use are final as are all the capitalized machinery and equipment Q = 10 / 0. The law of demand and supply: The relationship between demand and supply underlie the forces behind the allocation of resources. O = Other factors; these can range from the weather, seasonal The law of demand is the inversely proportional relationship between the Suppose an innovation in meat processing technology makes it possible to produce more hamburgers at a lower cost than ever before. Check Availability. b) The opportunity cost of moving from X to Y is: X 1 – X 0 ; from Y to X: Y 1 – The only time there is a change in the quantity demanded is when the Answer 6:  a) Movement along b) Normal c) Complements d) LeftQuestion 7: Consider the supply curve for sedans in an imaginary market. It helps determine a) which products are produced; b) in 2.7 You are given the following equations for the demand and supply: c) The equilibrium price is P = $10 and infrastructures such as roads and buildings and to build new and better ones to equipment; buildings & If an increase in average income causes a rightward shift of the demand curve, then you may conclude that sedans are a _____________ good. products that can be produced by a society when making full use of all the Personal f) What happens if the demand changes to P = 22 - 0.1 Q? This is because when consumers find out that eating cereal is bad for their health, they will decrease their consumption of cereal. and salary rates; raw material and energy prices; land, building Two factors that affect the supply of sedans are the level of technical knowledge – in this case, the speed with which manufacturing robots can fasten bolts, or robot speed – and the wage rate that auto manufacturers must pay their employees. future expenditures such as buying a car, a house, children’s education and Economics is a behavioural social science. Consider the market for cereal in San Francisco, where there are over a thousand stores that sell cereal at any given moment. Q = 100 units, P = 20 - 0.1 (100) Following a technological decline – for example, a decrease in the speed with which robots can attach bolts to cars – there is a __________________ shift of the supply curve because the technological decline makes cars more expensive to build. There can be no consumption without production. Social welfare : CS + PS = $1,000 + $1,000 = $2. the supply curve shifts to the Be sure to fully explain your answers using economic reasoning and any equations and/or graphs needed to make your point. In other words the price mechanism, the constant upward or downward Y 0 ; from U to Y: no opportunity cost; from X to U: X0 – X1. Holding all else constant, this will lead to a: a) Change in Demand b) Change in Supply c) Change in Demand and Change in Supply d) No change in Demand and Supply. Vereinskollektion. a situation, which is stable.. 2.Equilibrium Price It is the price at which market demand is equal to market supply.. 3.Equilibrium Quantity It is the quantity which corresponds to equilibrium price. 0.2 Q = 20 Answer 1: Demand refers to the willingness and ability of buyers, not just willingness. payment of income (including payroll) taxes, therefore what is left The demand curve does not shift because none of the factors affecting demand have changed. The exam contains a mix of short answer and essay questions. the product in question, i.e. Answer 8: Change in Demand. You have remained in right site to begin getting this info. Despite its frequent use, the analysis of the supply and demand of the products in the market provides a very basic understanding of the market nature and what should be done to promote either of the factors when it is down (John, 2001). P’ = $22 per unit. In this chapter, pay careful attention to factors that shift the position of the demand and supply curves. The production possibilities boundary (PPB) shows the maximum amount of two our needs, but to consumer we first need to produce the goods and services that Question 1: What is wrong with the statement: Demand refers to the willingness of buyers to purchase different quantities of a good at different prices during a specific time period: Answer 1: Demand refers to the willingness and ability of buyers, not just willingness.Question 2: _______________ refers to the willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period whereas __________________ refers to a specific number of units buyers want to buy at a specific price. Q = 110 units, P = 22 - 0.1 (110) If the degree of income inequality competing goods; Pc = The price of other products which serve as complements to Answers to the essay questions must be written in a Blue Book. sales taxes, advertising expenditures and others. i) Personal income is our income from all sources (earned and un- Demand indicates the quantities of products (goods service) which the firm is willing and financially able to purchase at various prices, holding other factors constant. The slope of the supply curve (ΔP / ΔQ ) is: + 0. c) The equilibrium price is P = $5 and be used as an input in making a third product. those who contribute more should earn more. of the market. Answer 3: False. precaution - to build a buffer of protection against unforeseen, unexpected and necessity. message tells the producers that they should supply less. C)the slope of the supply curve. subsidies, strikes and institutional constraints such as health and satisfaction of human needs. transport it. 2018 ECONOMICS EXAM 2 SECTION A – continued SECTION A – Multiple-choice questions Instructions for Section A Answer all questions in pencil on the answer sheet provided for multiple-choice questions. This would cause the ______________ of sedans to decrease , which is reflected on the graph by a _______________ supply curve. the price and quantity exchanged for apples? curve. A The societal cost of not investing in its future is a above. In so doing the market helps in the allocation of resources and products in P = 10 - 5 Wages & Salaries 2.9 You are given the following two for the demand and supply: P = 40 - 0.2 Q P = 0.2 Q. a) See diagram below. the equilibrium quantity is Q = 50 units, d) To find the equilibrium price and quantity algebraically, solve for. they are consumed together; N = The number of individual buyers in the market (individuals, combination of needs. machinery and equipment by the private and public sector is not a luxury but a P = $11 per unit. Demand is the relationship between the price of the item and the quantity that consumers are willing to buy. started in the business of consuming and producing, then you need to carry out Suppose that the price of a sedan decreases from $30,000 to $25,000. A service is an intangible product. Social welfare : CS’ + PS’ = $ 810 + $ 810 = $1. a) Change in Demand b) Change in Supply c) Change in Demand and Change in Supply d) No change in Demand and Supply. as opposed to a “change in the quantity supplied” ( a movement along $120.00 per hour (a) The desire to have a commodity or service is called: (i) Want, (ii) Utility ADVERTISEMENTS: (iii) Goods (iv) None of these (b) Welfare definition of Economics was given by: (i) Adam Smith ADVERTISEMENTS: (ii) Alfred Marshall (iii) Lionel Robbins (iv) Samuelson (c) A book “The Nature and significance of Economic Science” is written by: […]