D089 - Module 3 Practice - Supply and Demand
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Western Governors University *
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D089
Subject
Economics
Date
Jan 9, 2024
Type
2
Pages
5
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D089 - Module 3 Practice - Supply and Demand
D089 Course Instructors have created this resource to help develop your knowledge of the concepts in Module 3. We recommend reading the material in your Acrobatiq text and watching the
videos before working on the questions. Please note that these questions do not come from the actual assessment. Course Instructors are not privy to information on the assessment. If you have
any questions, please feel free to reach out to us at economics@wgu.edu
.
Points:
10/12
Correct
1/1 Points
1
According to the "Law of Demand", what happens when the price of a good increases?Single choice. Quantity demanded of the good decreases
Feedback: The "Law of Demand" describes an inverse relationship between price and quantity demanded. When price increases, quantity demanded falls
Demand for the good increases
Quantity demanded of the good increases
Demand for the good decreases
Correct answers: Quantity demanded of the good decreases
Correct
1/1 Points
2
What does the graph depict?Single choice. An increase in quantity demanded
An increase in demand
Feedback: When the demand curve moves to the right this is an increase in demand.
A decrease in demand
A decrease in quantity demanded
Correct answers: An increase in demand
Correct
1/1 Points
3
The graph below shows the demand for hand sanitizer. Which of the following scenarios could be depicted using the graph? (Choose 2)Multiple choice. The price of soap, a substitute for hand sanitizer, decreases.
The price of hand sanitizer decreases.
Consumers expect there to be a shortage of hand sanitizer in the future.
Feedback: Demand increases when there is a change in the preference for hand sanitizer caused by the desire for protection from the virus. Demand also increases based on the expectations of future availability.
CDC recommends hand cleaning to protect against Covid infections.
Feedback: Demand increases when there is a change in the preference for hand sanitizer caused by the desire for protection from the virus. Demand also increases based on the expectations of future availability.
Correct answers: Consumers expect there to be a shortage of hand sanitizer in the future.,CDC recommends hand cleaning to protect against Covid infections.
Incorrect
0/1 Points
4
What happens when the price of pizza decreases?Single choice. The supply of pizza decreases.
The quantity supplied of pizza decreases.
The quantity supplied of pizza increases.
Feedback: According to the "Law of Supply", there is a positive relationship between price and quantity supplied.
The supply of pizza increases.
Your answer to question 4 is wrong. Correct answers: The quantity supplied of pizza decreases.
Incorrect
0/1 Points
5
What would happen to the demand curve for pizza if the price of pizza decreased?
Single choice. A shift of the demand curve to the right
Movement along the curve to a higher quantity demanded
A shift of the demand curve to the left
Movement along the curve to a lower quantity demanded
Your answer to question 5 is wrong. Correct answers: Movement along the curve to a higher quantity demanded
Correct
1/1 Points
6
Which of the following scenarios cause a decrease in the supply of lemonade? (Choose 2)Multiple choice. New tariffs raise the price of sugar used to produce lemonade.
Fewer temporary worker Visas reduce the supply of labor to lemon groves.
The hot summer weather causes more people to want to drink lemonade.
The price of lemonade decreases.
Correct answers: New tariffs raise the price of sugar used to produce lemonade.,Fewer temporary worker Visas reduce the supply of labor to lemon groves.
Correct
1/1 Points
7
The table shows the market for gasoline. If the price of gasoline is $1.80 per gallon, then...Single choice. There is a surplus and the price of gasoline will rise.
There is a shortage and the price of gasoline will fall.
There is a surplus and the price of gasoline will fall.
Feedback: Prices adjust to bring markets back to equilibrium. When quantity supplied exceeds quantity demanded, there is a surplus and the price will fall in order to clear the market.
There is a shortage and the price of gasoline will rise.
Correct answers: There is a surplus and the price of gasoline will fall.
Correct
1/1 Points
8
Use the supply and demand model to analyze the following scenarios. Which of these events increase the equilibrium quantity of bicycles? (Choose 2)Multiple choice. An increase in the number of people looking for alternate exercise options while their gyms are shut down.
A shortage of aluminum used to make bikes.
An improvement in the technology used to make bikes.
There is a sale on bicycles.
Correct answers: An increase in the number of people looking for alternate exercise options while their gyms are shut down.,An improvement in the technology used to make bikes.
Correct
1/1 Points
9
Changes in climate conditions have improved farmer's corn yields, causing an increase in the supply of corn. Which of the following describes the impact of this change on the market for corn?
Single choice. The supply curve will shift left, causing an decrease in equilibrium price and an increase in equilibrium quantity.
The supply curve will shift left, causing an increase in equilibrium price and an decrease in equilibrium quantity.
The supply curve will shift right, causing an increase in equilibrium price and an increase in equilibrium quantity.
The supply curve will shift right, causing a decrease in equilibrium price and an increase in equilibrium quantity.
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4.00
3.50
Monopoly Outcome
3.00
ATC
2.50
Profit
2.00
1.50
Loss
MC
1.00
K 0.50
D
2.0
QUANTITY OF OUTPUT (Thousands of cans of beer)
0.5
1.0
1.5
2.5
3.0
35
4.0
Suppose that BYOB charges $2.75 per can. Your friend Musashi says that since BYOB is a monopoly with market power, it should charge a higher p
of $3.00 per can because this will increase BYOB's profit.
Complete the following table to determine whether Musashi is correct. If BYOB is suffering a loss, enter a negative value for profit.
Price
(Dollarc nor can)
Quantity Demanded
Total Revenue
Total Cost
Profit
nollare)
nallare)
IDallare-1
17 +
ho.
144
DII
DDI
&
*
5.
6.
7.
8.
ba
R
PRICE AND COST PER UNIT (Dollars per can)
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Chapter 13 Homework
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In the following table, complete the marginal cost, average variable cost, and average total cost columns.
Quantity
(Vats of juice)
0
(Dollars)
Variable Cost Total Cost Marginal Cost
(Dollars)
(Dollars)
Average Variable Cost
(Dollars)
Average Total Cost
(Dollars)
0
30
8
38
2
18
48
3456
30
60
50
80
80
110
AAAAAA
120
150
A-Z
S
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On the following graph, use the orange points (square symbol) to plot the marginal-cost curve for Eric's Juice Bar. (Note: Be sure to plot from left to
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