ECO 201 & 202 QUIZ WITH EXPLAINED
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SCORE A
Individual and market demand
Suppose that Sam and Teresa are the only consumers of pizza slices in a
particular market. The following table shows their annual demand
schedules:
Price Sam's Quantity Teresa's Quantity
Demanded Demanded
(Dollars per
slice) (Slices) (Slices)
1 40 60
2 25 40
3 15 30
4 5 20
5 0 10
On the following graph, plot Sam's demand for pizza slices using the
green points (triangle symbol). Next, plot Teresa's demand for pizza
slices using the purple points (diamond symbol). Finally, plot the market
demand for pizza slices using the blue points (circle symbol).
6. Shifts in supply or demand I
The following graph shows the market for cereal in Miami, where there
are over a thousand stores that sell cereal at any given moment.
Suppose the price of milk increases. (Assume that people regard cereal
and milk as complements.)
Show the effect of this change on the market for cereal by shifting one
or both of the curves on the following graph, holding all else constant
, ECO 201 & 202 QUIZ WITH EXPLAINED
ANSWERS 100% CORRECT DOWNLOAD TO
SCORE A
Explanation:
Cereal and milk are complementary goods because people like to consume them together.
When the price of milk increases, it becomes more costly to consume milk and cereal together.
Therefore, people decrease their consumption of cereal at any given price. Consequently, the
demand for cereal decreases, and the demand curve shifts to the left. Notice that it is the price
of milk, rather than the quantity demanded of milk, that changes the demand for cereal.
Note that the supply curve does not shift because none of the factors affecting supply have
changed. In particular, the supply curve shifts in response to changes in the following:
Factors Affecting Supply
• Price of inputs
• Production technology
, ECO 201 & 202 QUIZ WITH EXPLAINED
ANSWERS 100% CORRECT DOWNLOAD TO
SCORE A
• Number of producers
• Expectations of producers
5. A change in supply versus a change in quantity supplied
5. A change in supply versus a change in quantity supplied
The following calculator shows the supply curve for sedans in an
imaginary market. For simplicity, assume that all sedans are identical
and sell for the same price. Two factors that
, ECO 201 & 202 QUIZ WITH EXPLAINED
ANSWERS 100% CORRECT DOWNLOAD TO
SCORE A
affect the supply of sedans are the level of technical knowledge—in
this case, the speed with which manufacturing robots can fasten
bolts, or robot speed—and the wage rate that auto manufacturers
must pay their employees. Initially, the graph shows the supply
curve when robots can fasten 2,500 bolts per hour and autoworkers
earn $25 per hour.
Use the graph input tool to help you answer the following questions.
You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any
corresponding amounts in each grey field will change accordingly.
ANSWERS 100% CORRECT DOWNLOAD TO
SCORE A
Individual and market demand
Suppose that Sam and Teresa are the only consumers of pizza slices in a
particular market. The following table shows their annual demand
schedules:
Price Sam's Quantity Teresa's Quantity
Demanded Demanded
(Dollars per
slice) (Slices) (Slices)
1 40 60
2 25 40
3 15 30
4 5 20
5 0 10
On the following graph, plot Sam's demand for pizza slices using the
green points (triangle symbol). Next, plot Teresa's demand for pizza
slices using the purple points (diamond symbol). Finally, plot the market
demand for pizza slices using the blue points (circle symbol).
6. Shifts in supply or demand I
The following graph shows the market for cereal in Miami, where there
are over a thousand stores that sell cereal at any given moment.
Suppose the price of milk increases. (Assume that people regard cereal
and milk as complements.)
Show the effect of this change on the market for cereal by shifting one
or both of the curves on the following graph, holding all else constant
, ECO 201 & 202 QUIZ WITH EXPLAINED
ANSWERS 100% CORRECT DOWNLOAD TO
SCORE A
Explanation:
Cereal and milk are complementary goods because people like to consume them together.
When the price of milk increases, it becomes more costly to consume milk and cereal together.
Therefore, people decrease their consumption of cereal at any given price. Consequently, the
demand for cereal decreases, and the demand curve shifts to the left. Notice that it is the price
of milk, rather than the quantity demanded of milk, that changes the demand for cereal.
Note that the supply curve does not shift because none of the factors affecting supply have
changed. In particular, the supply curve shifts in response to changes in the following:
Factors Affecting Supply
• Price of inputs
• Production technology
, ECO 201 & 202 QUIZ WITH EXPLAINED
ANSWERS 100% CORRECT DOWNLOAD TO
SCORE A
• Number of producers
• Expectations of producers
5. A change in supply versus a change in quantity supplied
5. A change in supply versus a change in quantity supplied
The following calculator shows the supply curve for sedans in an
imaginary market. For simplicity, assume that all sedans are identical
and sell for the same price. Two factors that
, ECO 201 & 202 QUIZ WITH EXPLAINED
ANSWERS 100% CORRECT DOWNLOAD TO
SCORE A
affect the supply of sedans are the level of technical knowledge—in
this case, the speed with which manufacturing robots can fasten
bolts, or robot speed—and the wage rate that auto manufacturers
must pay their employees. Initially, the graph shows the supply
curve when robots can fasten 2,500 bolts per hour and autoworkers
earn $25 per hour.
Use the graph input tool to help you answer the following questions.
You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any
corresponding amounts in each grey field will change accordingly.
