Liberty University ECON 213 Quiz 3 Complete Solutions Correct Answers Key

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Liberty University ECON 213Quiz 3 Complete Solutions Correct Answers KeyTwo different versionsQuestion 1 In agriculture, a “bumper crop” refers to a particularly productive harvest. If there is abumper crop for wheat at the same time that more people become allergic to wheat and all elseis held constant, what will happen to the equilibrium price and quantity for wheat?Question 2 Something is a normal good if the demand for the good:Question 3 During the winter months, many elderly persons leave their homes in northern NewYork and travel south to Florida or Arizona. What would you expect to happen to the equilibriumprice and quantity of items most used by the elderly in northern New York?Question 4 If the price of Gatorade increases, theQuestion 5 The change in equilibrium shown in the accompanying figure would be explained bya(n):Question 6 Oil is a main component in the manufacture of plastic bags. If the price of oil were toincrease, the price of plastics bags would:Question 7 Refer to the accompanying figure. What event would cause the supply curve to shiftout?Question 8 Changes in population can:Question 9 Refer to the table below: Assume that the market for iPods has only two consumers:Chuck and Ryan. According the table above, if the price of an iPod is $85, the market will demand:Question 10 Shoes are considered to be a normal good. What would happen to the equilibriumprice and equilibrium quantity of shoes if income increases and the cost of labor to produceshoes increases?Question 11 Which of the following scenarios would explain the change in equilibrium shown inthe accompanying figure?Question 12 If the price of rubber were to increase by 20% over the fiscal year and if all else wereheld constant,whatwould youexpect to happento the supply curve oftires thatare soldseparately from automobiles?

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Question 13 The demand curve for a good will shift to the right if, holding all else constant,Question 14 If the number of buyers in a market increases from 50 to 100, you would expect theequilibrium price to _________ and the equilibrium quantity to _________, holding all else constant.Question 15 The equilibrium price of teddy bears is $5. A study comes out that says owning ateddy bear causes you to earn a lower salary. If all other factors are held constant, which of thefollowing scenarios could happen?Question 16 A monopoly:Question 17 Kim attends the farmer’s market in her hometown of Bakersfield every Sunday. Shenotices that all of the oranges sold by the many different farmers at the market have roughly thesame price, as do most other products that are alike. Which statement best explains why theprices are so similar?Question 18 The law of supply states that, all other things being equal,Question 19 When the number of firms in a market decreases,Question 20 Firm A notices that Firm B is making a profit by producing footballs. There is nothingstopping Firm A from entering the football market, so it does. Holding all else constant, thenumber of firms in the market will:Question 1 In the first few months of 2012, the price of gasoline increased by approximately 15%.Because of this increase, we would expect the _________ curve in the market for hybrid cars to_________.Question 2 When the number of firms in a market decreases,Question 3 A shortage occurs whenever:Question 4 Companies use advertising to shift consumer demand. Which of the following demandshifters do you think advertisers most often rely on?

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Question 5 A subsidy:Question 6 When firms in a market expect the price of their product to rise, the supply curve oftheir good:Question 7 Old Navy stocks more Bermuda shorts during the summer months than in the wintermonths. The resulting shift in supply explains:Question 8 If the price of rubber were to increase by 20% over the fiscal year and if all else wereheld constant,whatwould youexpect to happento the supply curve oftires thatare soldseparately from automobiles?Question 9 The market for footballs is perfectly competitive. If all else is held constant and theprice of leather decreases, we would expect that the equilibrium quantity of footballs would:Question 10 As more people migrated West during the gold rush, what do you think happened tothe demand curve in most Western markets, holding all else constant?Question 11 As the life expectancy in the United States increases, which of the following couldlikely happen to the demand curve for items such as health care, cancer treatments, and nursingfacilities, holding all else constant, and why?Question 12 Something is a normal good if the demand for the good:Question 13 Which of the following would cause the demand curve to shift to the right?Question 14 According to the law of demand, all other things being equal,Question 15 Which of the quantity (Q) and price (P) combinations in the accompanying figurerepresents the market at competitive equilibrium?Question 16 The law of supply states that, all other things being equal,Question 17 When both curves shift:Question 18 Assume that the market for nachos has only two suppliers: Firm 1 and Firm 2.According to this table, if the price of nachos is $6, the market will supply:Question 19 The demand curve for a good will shift to the right if, holding all else constant,Question 20 The change in equilibrium shown in the accompanying figure would be explained bya(n):

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