ECON 102 Lecture Notes - Lecture 8: Demand Curve

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oliveferret918

27 Dec 2015

School

University of Illinois

Department

Economics

Course

ECON 102

Professor

Isaac Di Ianni

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ECON 102 Full Course Notes

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Q5 = f (price, # of sellers, technology, input prices, taxes or subsidies) If the price of the good itself changes, it doesn"t shift supply curve, just movement along the curve (like demand curve) If price rises, quantity supplied goes up but doesn"t change supply. Number of sellers: ex. medical services, ex. number of sellers increase, supply increases. Input prices: if technology improves, shifts supply to right, if technology decreases, supply shifts left, ex. hurricane katrina price of gasoline went up, supply shifted left. Knocked out refineries, takes time so gasoline produced gets lowered, resulting in decrease in supply: prices to the inputs of your production prcies. Ex. steel, rubber, etc to produce cars: if prices of inputs change affects supply of product. Ex. of price of steel rises, supply of cars will shift left bc more expensive to produce cars. Modern economists have a different answer there is a demand for steel for producing other things that people want.

Related Questions

13. If the price of gasoline increases and car dealers experience a decrease in demand for sport utility vehicles, then gasoline and sport utility vehicles are:

Select one:

a. substitutes.

b. unrelated goods.

c. inferior goods.

d. complements.

14. Specifically, a change in the quantity supplied is referring to:

Select one:

a. A movement along a given supply curve resulting from a change in price

b. A shift in the supply curve either up or down

c. A change in the minimum price sellers are willing to sell for resulting from a change in a determinant of supply (like input prices, technology, or taxes)

d. A shift in the supply curve either left or right

15. Which of the following would be classified as an intermediate good?

Select one:

a. The fabric purchased by a jean manufacturer to make their pants.

b. The wood purchased by a homeowner to build his own deck.

c. The book purchased by a student for their economics class.

d. The bottling machine purchased by Coca Cola to use in one of the bottling plants.

16. The single best indicator of a recession is:

Select one:

a. negative nominal GDP growth.

b. increasing unemployment.

c. falling prices.

d. negative real GDP growth.

17. A leftward shift of a product supply curve might be caused by:

Select one:

a. a decline in the prices of needed inputs.

b. some firms leaving an industry.

c. an improvement in the relevant technique of production.

d. an increase in consumer incomes.

18. The law of supply predicts that when price increases, holding all else constant, the quantity supplied by firms increases.

Select one:

True

False

amethystfly500

When demand for a good is very elastic, revenue ________ when the price falls.

(2)

An elasticity measure less than one means that demand is __________.

(3)

An elasticity measure greater than one means that demand is __________.

(4)

The Latin expression ceteris paribus means

	having made all other necessary changes.
	holding constant all other variables.
	assuming all households have similar incomes.
	given the level of income in the economy.

(5)

A variable measured in terms of money is called a ____________________.

	real variable
	nominal variable
	macroeconomic variable
	microeconomic variable

(6)

Which of the following is true about the importance of money in economics?

	Money is important in both macroeconomics and microeconomics.
	Money is important in macroeconomics but not microeconomics.
	Money is important in microeconomics but not macroeconomics.
	Money is not important in either microeconomics or macroeconomics.

(7)

What is the difference between normative and positive economics?

	Positive economics is descriptive and predictive; normative economics is prescriptive.
	Positive economics highlights the positive aspects of the economy; normative economics highlights the average features.
	Positive economics studies the actions of individuals; normative economics studies the actions of households.
	Positive economics is an applied social science; normative economics is a theoretical social science.

(8)

The slope of the demand curve is negative because

	the quantity of a good demanded decreases as income declines.
	the quantity of a good demanded increases as income declines.
	the quantity of a good demanded increases as the price declines.
	the quantity of a good demanded decreases as the price declines.

(9)

What is the result of an increase in the price of bread, a normal good?

	The demand curve shifts to the right.
	The demand curve shifts to the left.
	The quantity demanded increases.
	The quantity demanded decreases.

(10)

What is the effect on demand for bread when the price of bagels, a substitute for bread, rises?

	The demand curve for bread shifts to the right.
	The demand curve for bread shifts to the left.
	The quantity of bread demanded increases.
	The quantity of bread demanded decreases.

(11)

Which of the following would cause the supply curve for bread to shift inward?

	An increase in the price of bread
	An increase in the price of bagels
	A decrease in the price of bread
	An increase in the price of flour

(12)

An improvement in technology shifts the supply curve outward because

	at every price, firms find producing the good to be more profitable.
	the price of the good increases.
	at every price, firms find producing the good to be less profitable.
	the price of the good decreases.

(13)

Which of the following factors does not affect how much bread a baker is willing to produce?

	The price of bread
	The demand for bread
	The cost of inputs
	Technology

(14)

How do expectations of prices affect how much of a good producers are willing to sell?

	Expectations of prices affect only demand, not supply.
	Actual prices, not expectations of prices, affect supply.
	If producers expect prices to fall in the future, they supply less at every price.
	If producers expect prices to rise in the future, they supply less at every price.

(15)

When the price of a good is above equilibrium level,

	the quantity demanded exceeds the quantity supplied.
	the quantity supplied exceeds the quantity demanded.
	the supply curve shifts to the left.
	the supply curve shifts to the right.

(16)

At a price of P₀ in the diagram below, which of the following statements is true?

	Supply equals demand.
	There is excess demand.
	There is excess supply.
	There is scarcity.

(17)

If demand for bread increases at every price, the equilibrium price of bread will

	fall.
	rise.
	remain unchanged.
	depend on income.

(18)

If the demand for bread declines, then

	at the original equilibrium price, there is excess demand.
	at the original equilibrium price, there is excess supply.
	the supply curve shifts to the right.
	the supply curve shifts to the left.

(19)

Peanut butter and jelly are complementary goods. When the price of peanut butter rises, the demand for jelly ________ and the price of jelly ________.

	rises; falls
	rises; rises
	falls; rises
	falls; falls

(20)

The measure of elasticity that economists use is

	always a positive number.
	always a negative number.
	positive when demand is elastic and negative when demand is inelastic.
	negative when demand is elastic and positive when demand is inelastic.

(21)

Which of the following formulas is the correct expression for the slope of a line?

(22)

Graphically how would an increase in income affect the demand for hamburgers?

	The slope of the demand curve would increase.
	The slope of the demand curve would decrease.
	The demand curve would shift outward, parallel to the original demand curve.
	The demand curve would shift inward, parallel to the original demand curve.

(23)

Given the equation P = $6.00 ? $.40Q, where P is the price of the good and Q is the quantity of the good demanded, how many units will this consumer demand if the price is $3.60?

	1.44 units
	3 units
	3.6 units
	6 units

(24)

Which of the following is true about unit elasticity?

	Revenues remain unchanged when the price changes.
	Elasticity of demand increases as one moves down the demand curve.
	Elasticity of demand decreases as one moves down the demand curve.
	The elasticity of demand is greater than one at every point along the demand curve.

(25)

Which of the following could be a determinant of the quantity demanded of a good?

	The price of the good
	The price of related goods
	Income
	Expectations about the future price of the product
	All of the above

violethare488

Which of the following could shift the demand curve for music CDs to the left? Question 2 options:

A) A rise in the price of CD's.

B) A rise in people's incomes.

C) A fall in the cost of manufacturing CD's.

D) A fall in the price of downloading digital music files.

The horizontal sum of all the individual demand schedules for lumber Question 3 options:

A) is the market demand for lumber.

B) is the market supply for lumber.

C) will usually be a vertical line.

D) must be an upward sloping curve.

A movement along the demand curve for automobiles is caused by a change in Question 4 options:

A) the price of automobiles.

B) the price of gasoline.

C) the price of steel.

D) consumer's incomes

Which of the following would increase the demand for movie video rentals? Question 5 options:

A) The cost of producing movies rises dramatically.

B) New video rental stores are opened in the community.

C) Local officials levy a new tax on video rentals.

D) Prices on VCR and DVD players fall by 20 percent.

According to the law of supply, there is a direct relationship between the quantity supplied of a good and the Question 6 options:

A) number of sellers.

B) costs of resources.

C) technology used to produce the good.

D) price of the good.

Which of the following would increase the quantity supplied of books but have no impact on the supply of books? Question 7 options:

A) An increase in the price of books.

B) An increase in the cost of paper.

C) An increase in the number of area bookstores.

D) An increase in the royalties paid to authors.

Which of the following would cause a decrease in the supply of 35mm film? Question 8 options:

A) A fall in the price of 35mm film.

B) A fall in the price of developing 35mm film.

C) The introduction of new digital cameras that do not use 35mm film.

D) An increase in the cost of manufacturing 35mm film.

f the price of tea is below its equilibrium level, then Question 9 options:

A) the demand for tea will decrease.

B) the market for tea has cleared.

C) sellers will be stuck with unsold tea.

D) there is a shortage of tea.

The use of a price system tends to eliminate Question 10 options:

A) scarcity.

B) equilibrium.

C) shortages and surpluses

. D) changes in supply and demand.

ECON 102 Lecture Notes - Lecture 8: Demand Curve

ECON 102 Full Course Notes

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