Markets

Multiple Choice Questions

After watching the Markets video lecture, consider the question(s) below. Then “submit” your response.

Question

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Question

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Question

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Question

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Question

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Question

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Question

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True/False Questions

After watching the Markets video lecture, consider the question(s) below. Then “submit” your response.

Question

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Question

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Question

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Short Answer/Discussion Questions

After watching the Markets video lecture, consider the question(s) below. Then “submit” your response.

Question

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Suggested solution: With the increase in brand A’s price, consumers will buy less of that product, a reduction in the quantity demanded. This will be shown on brand A’s demand curve by a movement along its demand curve—the curve itself will not move. Consumers will buy more of brand B, an increase in demand. This will be depicted by a rightward shift in brand B’s demand curve. (Answers may vary.)

Question

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Suggested solution: A change in the quantity supplied is caused by a change in the price of a good; the supply curve does not shift. A shift of the supply curve ( also called a change in supply) is caused by changes in factors other than price. These supply curve shifters include changes in (1) technology, (2) the prices of production resources, (3) the prices of substitute goods, (4) expectations, (5) the number of producers, and (6) taxes and subsidies. (Answers may vary.)

Question

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Suggested solution: No. For example, if there is a change in supply of a good that moves the supply curve to the right (and the demand curve remains stationary), the good’s equilibrium price will decline, but the equilibrium quantity will increase. A rightward movement of the supply curve would be caused by factors such as improvements in technology, declines in resource prices, reductions in taxes, or increases in subsidies causing a decline in production costs. (Answers may vary.)