Pretest Answer Key Name & Hour Part 1. Supply and Demand. Use the following Key to answer the following questions about Supply and Demand. NOTICE FOR DEMAND YOU ARE SHADING TWO LETTERS (A) The S-curve shifts to the right (AB) The D-curve shifts tothe right. (B) The S-curve shifts to the left. (AC) The D-curve shifts to the left. (C) The S-curve doesn’tshift. Qs increases. (AD) The D-curve doesn’t shift. Q¢ increases (D) The S-curve doesi’t shift. Qs decreases, (AE) The D-curve doesn’t shift. Qe decreases The price of bread goes up, _What happens to demand for butter? Irsays Demand so it’sa 2 Letter Answer. Bread & Butter are different soit shifts. 1f bread is more expensive people buy less butter to go with it So AC is the answer ‘2 Dike becomes very unpopular, __what happens to demand for Reebok? Iesays Demand so its a 2 Lewer Answer 1 doesn’t mention price so it shifts people buy less Nike, they would buy more of a Substitute like Reebox So ABs the answer You geta 10% pay cu, _what happens to demand for Normal Goods? It says demand so it's a2 Teter answer 1 doesn’t mention price so it shifts If you have less money you buy less of the good/nomnal stuff So AC is the answer 4 Rolo (a clothes company) goes out of business __What happens to supply af clothes? Ir says supply so it’s a1 letter answer i doesn’t mention price so its Shift i polo is out of business there willbe less clothes So Bis the answer ‘S_Anew tax is put on luxury cars,__What happens to the supply of juxury cars, Ii says Supply so 1 leter answer i doesn’t mention price so it shifts Ifa company has to pay a tax they can afford to make less products, So Bis the answer ‘6 The price of iron goes down _____Whet happens to the supply of steel, It says Supply so 1 leter answer Ittalks about2 different things so Shifts If iron is cheaper, steet companies can afford more of it, so make more steel So Ais the answer ‘L the price of new cars goes down, __what happens to demand for used cars? says Demand so 2 letter answer talks about2 different things so Shifts 1! people buy more new cars cause they cheaper, they buy less of a substitue used cars AC Is the answer ‘The US puts anew quota on all Asian VGRs____,__What happens to the supply of VCRs? I says Supply so 1 leter Answer i doesn’t mention price so it shifts ‘This new quota will stop some VCRs from coming to America so less VERS So Bis the answer ‘The price of bread goes yp, __What happens to the supply of bread? Ir says supply so 1 eter Answer Ik isprice of bread, supply of bread so no shift As Price goes up, QS goes up (same way, more willing to sell) 10 The price of computers goes up. __What happens to demand for computers? It says demand so 2 letter Answer Itis price of computers, demand of computers so no shift AAs Price goes up, Qd goes dawn (opposite way, less willing to buy) So ABs the answerProtest Answer Key Name & Hour Part 1. Supply and Demand. Use the following Key to answer the following questions about Supply and wi 2 itsays Demand so 2 letters 1: doesn’t mention price so shits If people buy more Nautica they buy less of a substitute like Polo So AGis the answer 2 wi 2 It says demand so two leter answer talks about2 different products so it shifts i MCD ismore expensive they buy less MCD, so would buy more of a substitute like BKC ABis the answer Part2 Supply or Demand. Answer ifthe following would affect supply or demand? (8) Supply (B) Demand 13 Income (This deals with buying so B) 14 A company going outof business. (This deals with making.a product so A) 15 Compliments and Substitute Prices (This effects what you buy, MCD effects BK for ex, so B) 16 Natural disasters (going for the idea that Nature was one of the 5 factors that shift Supply so A) 17 ‘ads (This effects what you buy so B) 1B Price of related goods (This is same exact as #15, so B again) 19 Producing technology (Key word here is producing so making so A) 20 Taxes (This effects what you can produce one of the factors that shift Supply so A) Part 4 True-False (@ Tre (0) False 21 Demanel Curves go from the upper left the lower right, True 22:To be able wo DEMAND something you must be able to buy it and be willing to buy it. ‘True 23 Oceasionelly in America you use not only price as a rationing device, but also a 2"*rationing device such as first come, first serve. ‘True, but becareful that I don’t say the only rationing device that matters is frst come, first serve 24 Supply is defined as being willing and able to buy something FALSE (not buy its sell) 25 Milk and Cereal are substitutes FALSE (compliments they go together) 26 Because of Scarcity, we usea rationing device. TRUE 27 Demand for Neutral Goods depends on how much income someone has. FALSE (cither neutral should be normal... Or neutral should say it doesn’t change) 28 A Surplusis defined as when Qd> Qs FALSE (either should be shortage, or QD < QS) 29 A price above the equilibrium price will produce a surplus, TRUE 30 Compliments are products that replace each other. FALSE (Substitutes or products that go together) 31 Qs and Price have an inverse relationship FALSE (should either be QD or should say QS and Price go the same way) 32 Normal goods are generic cheap products. (not name brand products) FALSE (inferior is cheap) 33 You're very easy to fire in a field where there is @ high demand for that type of worker and low supply. False (hard to fire)Protest Answer Key Name & Hour Part 1. Supply and Demand. Use the following Key to answer the following questions about Supply and Part 5 Equilibrium Points - What happens to EP and EQ in the following situations. Use the key to answer the questions: (Unless stated only one curve shifts)) (A) EP Increases & EQ Increases (More D) (B) EP Increases & EQ Decreases (Less S) (C) EP Decreases & EQ Increases (more S) (D) EP Decreases & EQ Decreases(LESS D) This basically means | first have to decide if a problem is MORE DEMAND— Graph Type A=- or Memorize > .....0 AMSWEE A LESS DEMAND —~ Groph’Type B -- or Memorize Answer D MORE SUPPLY-~ Graph Type G-—~orMemorize >... Answer LESS SUPPLY ~- Graph type D ~ or Memorize --> Answer B 3M New fertilizer boosts crop productio ‘What happens to Crops? ‘More Supply so answer C ‘siLBeel becomes amajor health concern, _Whet happens to Beef. Less Demand s0 Answer D LESS SUPPLY so answer B ‘32Fonl Cars become alot mor expensive ____What happens to GM Cars? MORE DEMAND FOR GM so answer A ‘38 The tax on alcohol is removed What happens ta Alcohol? ‘More Supply of Alcohol so Answer C ve w cars? LESS SUPPLY of cars so Answer B ‘40.A new shoe company is founded __What happens to Shoes? MORE supply so Answer C AL The Red Wings win the Cup and become more popular, What happens to Red Wing Jerseys? MORE DEMAND 50 answer A 42 If people start buying more of 2 prod What by to that product? MORE DEMAND so answer A 42 Rall hettoms very unpopular What happens ta Rall Bestoms? LESS DEMAND so answer D 44 Supply is decreasing more than demand is decreasing, What happens to that product? ((Supply decrease is stronger in the tug-of-war than the demand decrease)) Supply Decrease makes prices go up, ‘quantity go down Demand Decrease __prices go down quantity go down ‘Together Price the stronger wins Quantity goes down for sure Supply) So the answer Price goes up, Quantity goes down.... So answer B 45 Demand increase 80%. Supply decreases 25%. ‘What happens to that product? (Demand increase 1s stronger in the tug-of-war than the supply decrease) Since Demand Increase is stronger, treat this just like only Demand is increasing ignore restPretest Answer Key Name & Hour Part 1. Supply and Demand. Use the following Key to answer the following questions about Supply and MORE Demand ANSWER A Part 6 Shifting Curves. Based on the following information decide which way the other curve shifted (A) Shifted Left (B) Shifted Right 46 1: Supply staved the same, what could happen to Demand to cause Quantity to go DOWN? $0 Les Demand woud make Less Quanity, "Answer A So Les Supply would wae Lass Quanity "Answer 48 {Demand stayed the sam ld suppl Pri DOWN: So MORE Supply would make prices go dawn Answer B 49 LL Supply stayed the same, what could happen Pri So MORE demand would cause prices tg up = Answer B. 50 1 Demand for Gas didn’t change, what could happen 1o Supply 10 cause Price of Gas goes UP? So Less Supply would cause prices to go up Answer A Part 2: Graphing, Put all answers on Graph Paper In this packet. Part 7 Graphing, Make sure you use the labels wherever appropriate. (S1, 82, D1, D2, A, B) Also next to each graph answer what happened in the graph to EP and EQ. (3 points per graph) 51 Demand shifting le, ____Supply staying the same, So on the OTHER ANSWER KEY TYPE B 52 y 50 on the OTHER ANSWER KEY TYPE © 53 So on the OTHER ANSWER KEY TYPE F 54 Demand increasing ly shifting Jef So on the OTHER ANSWER KEY TYPE H Part 8 Graphing. A Supply/Chart that would illustrate the questions. Make sure you use the labels wherever appropriate, (S1, S2, D1, D2,A, B) Also next to each graph answer what happened to the missing piece (EP or EQ) (3 points per graph) 55 Demand stayed the same. so shift the Supply curve ($2) in order tomake the EP go up. ‘So on the OTHER ANSWER KEY so less Supply to make prices go up... Type D 56 Supaly Stayed the same, so shift the Demand Curve (D2) in arder to make the EQ goup. Supoly. ‘sayedihe same So cn the OTHER ANSWER KEY so more demand would make Q go up... TYPE.A Part 8 Read the following Graph. Answer 57 to 59 (1 point each) 57. What isthe Equilibrium Price? $4 58 What price istherea shortage at? Anything below eculibrium (2) 59 What price isthere a surplus at? Anything above equilibrium (6) Part 9 - Short Answer. A couple words or perhaps 1 sentence is sufficient to answer the following: 60. No one will buy it (no demand) 61 1, Job/Income 2. Price you pay for stuff (everything you buy) Part 10 Longer Answers. Do2 of the 4 Questions. (Skip 63) 62 1) Demand tries to buy cheap 2) Supply tries to Sell high 3) Together compromise at Equilibrium 68 « 1, Higher Prices from MORE DEMAND like Holidays 2. Higher Prices from LESS SUPPLY like natural disester 3. Lower Prices from LESS DEMAND like Winter 4, Lower prices from More supply like finding more ill Explain why some jobs make more money than other js xamples of profi Some jobs have a lower supply and higher demand than others.Protest Answer Key Name & Hour Part 1. Supply and Demand. Use the following Key to answer the following questions about Supply and Example: Professional Basketball players make more than teachers because there are less supply of them, and Sports demands have a high demand for them to sell tickets.