Economics Topic 3 Review Questions with Correct Answers (Grade
A+)
Question 1: How would consumers react if the apple crop was destroyed by an insect and the price of
apples was expected to rise?
Answer: They would buy more while they are still cheap
Question 2: What happens in a market demand curve when price for a product falls?
Answer: demand increases
Question 3: What might be a complementary good for hamburgers?
Answer: hamburger buns
Question 4: Why doesn't demand increase for a product that is a low-cost necessity?
Answer: you don't need more of it, even if it gets cheaper
Question 5: What does a supply schedule show for individual firms and markets?
Answer: The relationship between price and quantity supplied for a specific good or service
Question 6: A new type of cherry from imported cherry trees is becoming very popular, what problem
do domestic cherry growers have if they want to start selling these cherries?
Answer: They have to wait for the trees to grow (can't sell right away)
Question 7: Why would a factory selling baseballs allow a variable cost increase and still increase
production?
Answer: Adding labor increases variable cost but also increases rate of production (marginal cost is less
than marginal revenue)
Question 8: What happens to a market supply curve in Zionsville when another pizza place opens?
Answer: shifts to the right
Question 9: If quantity supplied is larger than quantity demanded how can you restore market
equilibrium.
Answer: lower the price
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A+)
Question 1: How would consumers react if the apple crop was destroyed by an insect and the price of
apples was expected to rise?
Answer: They would buy more while they are still cheap
Question 2: What happens in a market demand curve when price for a product falls?
Answer: demand increases
Question 3: What might be a complementary good for hamburgers?
Answer: hamburger buns
Question 4: Why doesn't demand increase for a product that is a low-cost necessity?
Answer: you don't need more of it, even if it gets cheaper
Question 5: What does a supply schedule show for individual firms and markets?
Answer: The relationship between price and quantity supplied for a specific good or service
Question 6: A new type of cherry from imported cherry trees is becoming very popular, what problem
do domestic cherry growers have if they want to start selling these cherries?
Answer: They have to wait for the trees to grow (can't sell right away)
Question 7: Why would a factory selling baseballs allow a variable cost increase and still increase
production?
Answer: Adding labor increases variable cost but also increases rate of production (marginal cost is less
than marginal revenue)
Question 8: What happens to a market supply curve in Zionsville when another pizza place opens?
Answer: shifts to the right
Question 9: If quantity supplied is larger than quantity demanded how can you restore market
equilibrium.
Answer: lower the price
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