Homework 2

Name: ID: (共 3 頁) curve does not shift.
B) demand curve shifts from D1 to D2 and the supply
Homework # 2 curve shifts from S1 to S2.
C) demand curve shifts from D2 to D1 and the supply
I. Multiple Choice curve shifts from S2 to S1.
D) demand curve does not shift, and the supply curve
1. The law of demand states that, other things remaining shifts from S1 to S2.
the same, the higher the price of a good, the
A) smaller is the demand for the good. 6. The above figure shows the market for oil. Because of
B) larger is the demand for the good. the development of a new deep sea drilling technology,
C) smaller is the quantity of the good demanded. the
D) larger is the quantity of the good demanded. A) demand curve shifts from D1 to D2 and the supply
curve does not shift.
2. If the price of a hot dog is $2 and the price of a B) demand curve shifts from D1 to D2 and the supply
hamburger is $4, then the curve shifts from S1 to S2.
A) relative price of a hot dog is 1/2 of a hamburger per C) demand curve does not shift, and the supply curve
hot dog. shifts from S2 to S1.
B) money price of a hot dog is 2 hamburgers per hot dog. D) demand curve does not shift, and the supply curve
C) relative price of a hamburger is 1/2 of a hot dog per shifts from S1 to S2.
hamburger.
D) money price of a hamburger is 2 hot dogs per 7. When the price is less than the equilibrium price,
hamburger. A) there will be a shortage.
B) some consumers will be willing to pay a price higher
3. People buy more of good 1 when the price of good 2 than the prevailing price.
rises. These goods are C) the price will be forced higher.
A) complements. D) All of the above answers are correct.
B) substitutes.
C) normal goods. 8. Coffee and sugar are complements. If the supply curve
D) inferior goods. of coffee shifts leftward because of poor weather, then
there will be
4. Which of the following statements is correct? A) an increase in the price of sugar.
A) A change in the quantity demanded means a shift in B) a decrease in the price of sugar.
the demand curve. C) a leftward shift of the demand curve for coffee.
B) A change in demand means a movement along the D) a leftward shift of the supply curve for sugar.
demand curve.
C) A change in demand and change in quantity
demanded means the same thing.
D) A change in demand means a shift in the demand
curve while change in the quantity demanded means a
movement along the demand curve.

5. The figure above shows the market for candy. People
become more concerned that eating candy causes them to
gain weight, which they do not like. As a result, the
A) demand curve shifts from D2 to D1 and the supply

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9. The above figure shows the market for pizza. Which 14. In the above figure, if the price of good A increases
figure shows the effect of a decrease in the price of a from P2 to P1 and the demand for good B decreases
hamburger, which for consumers is a substitute for from D1 to D2, then goods A and B
pizza? A) are substitute goods. B) are complements
A) Figure A C) are inferior goods. D) unrelated.
B) Figure B
C) Figure D 15. The market demand is QD = 60-6P and the market
D) Figures B and C supply is QS = 4P. A price of $3 will result in
A) a shortage of 18 units. B) a surplus of 30 units
10. Which of the following events would unambiguously C) a shortage of 30 units. D) a surplus of 12 units
cause a decrease in the equilibrium price of cotton shirts?
A) an increase in the price of wool shirts and a decrease 16.下列敘述何者為供給量變動？ A)肥料價格上漲，
in the price of raw cotton 引起稻米價格上漲。 B)稻米價格上漲，引起稻米產量
B) a decrease in the price of wool shirts and a decrease in 增加。C)降低汽車進口關稅，引起國產汽車價格下降。
the price of raw cotton D)開放蘋果進口，引起蘋果價格下跌，數量增加。
C) an increase in the price of wool shirts and an increase
in the price of raw cotton 17. 過去幾十年來個人電腦市場的需求曲線向右移，
D) a decrease in the price of wool shirts and an increase 然而市場價格卻下降。其可能原因為何? A) 供給大
in the price of raw cotton 幅減少。B) 供給大幅增加。C) 供給些微減少。D) 供
給些微增加。
11. Which of the following would lead to a movement
along, but no shift in, the demand curve for spinach? 18. 近年來電信業者大幅降低通話費，此一結果對行
A) Disastrous weather that destroys about half of this 動電話的供需有何影響? A) 供給增加，需求減少。
year’s spinach crop. B) 供給不變，需求增加。C) 供給增加，需求增加。
B) A newly discovered increase in the nutritional value D) 供給減少，需求增加。
of spinach.
C) An increase in the price of broccoli, a substitute for 19. 社會上有 10 個人，每人對香蕉有相同的需求函數
spinach. P ﹦50 ﹣Q，若市場供給函數為 Q ﹦20 ﹢10P，則 市
D) An increase in income for all spinach lovers. 場均衡之價格與每人消費量為何? A) 價格為 24；
每人消費量為 260。B) 價格為 3；每人消費量為 50。
12. New cars are normal goods. What will happen to the C) 價格為 3；每人消費量為 47。 D) 價格為 24；每
equilibrium price of new cars if the price of gasoline 人消費量為 26。
rises, the price of steel falls, public transportation
becomes cheaper and more comfortable, auto-workers 20. Refer to the above Figure. The movement from point
accept lower wages and automobile insurance becomes A to point B on the graph represents
more expensive? A) an increased willingness and ability on the part of
A) Price will rise. suppliers to supply the good at each possible price.
B) Price will fall. B) an increase in the number of suppliers.
C) Price will stay exactly the same. C) a decrease in the price of a relevant input.
D) The price change will be ambiguous. D) an increase in the price of the good that is being
supplied and suppliers’ response to that price change.
13. Consider the market for new DVDs. If DVD players
became cheaper, buyers expected DVD prices to fall
next year, used DVDs became more expensive, and
DVD production technology improved, then we could
safely conclude that the equilibrium price of a new DVD
would
A) rise. B) fall. C) stay the same.
D) We couldn't be sure what it might do.

II. Short Answers

1. The table gives the demand and supply schedules for
cat food. If the price is $3.00 per pound of cat food, will
there be a shortage, a surplus, or is this price the

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equilibrium price? If there is a shortage, how much is the
shortage? If there is a surplus, how much is the surplus?

Price Quantity Quantity
(dollars per demanded supplied
pound of cat (tons of cat (tons of cat
food per year) food per year)
food)
1.00 52 15
1.50 46 26
2.00 43 34
2.50 40 30
3.00 35 44

2. The demand and supply schedules for gum are in the
table.

Price Quantity Quantity
(cents per
demanded supplied
pack)
(millions of packs a week)
20
40 180 60
60
80 140 100
100
100 140

60 180

20 220

A) Draw a graph of the market for gum and mark in the
equilibrium price and quantity.

B) Suppose that the price of gum is 70¢ a pack. Describe
the situation in the gum market and explain how the
price adjusts.

C) A fire destroys some factories that produce gum and
the quantity of gum supplied decreases by 40 million
packs a week at each price. Explain what happens in the
market for gum and illustrate the changes on your graph.

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