CHAPTER 3 1. (0.5 points) What do you think happens to the demand for swimsuits during the winter? Why? 2. (0.5 points) Consider the law of demand in the context of a grocery store supplying cans of tomato juice, which are normally priced at $1.99. a. According to the law of demand, what happens to quantity demanded when the price (and only the price) for cans of tomato juice increases above $1.99? Why? b. According to the law of demand, what happens to quantity demanded when the price (and only the price) for cans of tomato juice decreases below $1.99? Why? 3. (0.5 points) a. Consider the scenario of an above-equilibrium price: as a result, is quantity demanded lower or higher (pick one) than quantity supplied? What is the term economists use to describe this scenario? b. Consider the scenario of a below-equilibrium price: as a result, is quantity demanded lower or higher (pick one) than quantity supplied? What is the term economists use to describe this scenario? 4. (0.5 points) Suppose something changes in society that causes the entire supply curve to shift rightward. This is a (fill in the blank with either "change in supply" or "change in quantity supplied"). 5. (0.5 points) Due to a change in more than one economic variable, the ceteris paribus assumption is false. In that case, will the laws of supply and demand still be guaranteed to hold? Answer yes or no.6. (1 point) The table below provides prices and quantities demanded for an inferior good. Columns D1, D2, D3, and D4 represent demand schedules. Use the table to answer parts a. and b. below. Price D1 D2 D3 D4 $4.30 50 60 70 80 $4.40 45 55 65 75 $4.50 40 50 60 70 $4.60 35 45 55 65 a. Starting from D3, a decrease in income (ceteris paribus) could lead to a shift to demand schedule(s) (fill in the blank with one or more of D1, D2, D3, and/or D4). b. Starting from D3, an increase in income (ceteris paribus) could lead to a shift to demand schedule(s) (fill in the blank with one or more of D1, D2, D3, and/or D4). 7. (1 point) The table below provides prices and quantities supplied for a good. Columns $1, $2, $3, and $4 represent supply schedules. Use the table to answer parts a. and b. below. Price S1 $2 S3 S4 $28 1.1 million 1.3 million 1.5 million 1.7 million $38 1.2 million 1.4 million 1.6 million 1.8 million $48 1.3 million 1.5 million 1.7 million 1.9 million $58 1.4 million 1.6 million 1.8 million 2.0 million a. Starting from $3, a decrease in subsidies for production (ceteris paribus) could lead to a shift to supply schedule(s) (fill in the blank with one or more of $1, Sz, $3, and/or S4). b. Starting from $3, an increase in subsidies for production (ceteris paribus) could lead to a shift to supply schedule(s) _ (fill in the blank with one or more of $1, Sz, S3, and/or $4).B. ([15 points} Suppose the government introduces a tax credit on manufacturing electric vehicles [E'v'sl that gives about $2 billion per year to producers that make E'v's. Is this new subsidy likely to shift the demand or supply {pick one} for electric vehicles? And will that shift be an increase or a decrease (pick one)? El. ([15 points} Suppose consumers discover that tofu prices are likely to dramas: dramatically next month, and this discovery causes the consumers to change their expectations. Will this expectation change shift the garment demand or supply (pick one) for tofu? And will that shift in current demand or supply be an increase or decrease [pick one}? 1D. [15 points) A news report on new negative health impacts from ecigarettes decreases the demand for ecigarettes in the United States. Enefly explain the anticipated result in temis of 1:911: the price for ecigarettes and the equilibrium quantity of ecigarettes bought and sold. 11. {1 point} Suppose that demand suddenly decreases for good XYZ, while at the same timer supply suddenly increases. Given that information, answer parts a. and b. below. a. The equilibrium price for good XYZ will increasetdecreasetbe unclear (choose one of the underlined options}. b. The equilibrium quantity for good XYZ vvill WWIW {choose one of the underlined options}. 12. [0.5 points) Suppose a price ceiling is introduced below the equilibrium price in the market for gasoline. In one brief sentence, describe the result in terms of quantity demanded and quantity supplied for gasoline. 13. [(1.5 points) \"At the efcient market equilibrium, society can increase producer surplus without reducing consumer surplus." Is the previous statement true or false? 14. (1 point}A price oor is introduced and is set above the equilibrium price in the market for soybeans. Use that information to answer parts a., b.: and c. below. a. Will there be a deadweight loss in the market for soybeans as a result of the price floor? b. The price floor will result in an increase to: consumer surplus / producer surplus / both consumer and producer surplus / neither consumer or producer surplus (choose one of the underlined options). c. The price floor will result in a decrease to: consumer surplus / producer surplus / both consumer and producer surplus / neither consumer or producer surplus (choose one of the underlined options) CHAPTER 4 15. (0.5 points) Provide your own original example of a factor that can cause a shift in the labor market demand curve for biologists. 16. (1 point) a. When you go to the bank to deposit money into your savings account, you are participating in financial market demand / supply (circle, or highlight, or bold one to indicate your response). b. When you go to the bank seeking to borrow money, you are participating in financial market demand / supply (circle, or highlight, or bold one to indicate your response). 17. (1 point) Suppose there is an increase in demand for business loans, ceteris paribus. Given that information, answer parts a. and b. below. (Hint: to answer a. and b., just choose one of the following options: "increase," "decrease," or "stay the same.") a. As a result, the rate of return on business loans will increase/decrease/stay the same (choose one). b. As a result, the quantity of business loans made and received will increase/decrease/stay the same (choose one).18. (1 point) Suppose there is an increase in supply for auto loans, ceteris paribus. Given that information, answer parts a. and b. below. (Hint: to answer a. and b., just choose one of the following options: "increase," "decrease," or "stay the same.") a. As a result, the rate of return on auto loans will increase/decrease/stay the same (choose one). b. As a result, the quantity of auto loans made and received will increase/decrease/stay the same (choose one)