Gm545 Quiz 1

Grading Summary

These are the automatically

computed results of your exam.

Grades for essay questions, and

comments from your instructor, are

in the "Details" section below.

Date Taken:

Time Spent:

Points Received:

Question Type:

Short

7/30/2012

1 h , 31 min , 12 secs

70 / 100 (70%)

# Of Questions:

10

# Correct:

N/A

Grade Details - All Questions

1. Question :

Student Answer:

Instructor

Explanation:

Points Received:

(TCO A) There is an increase in the cost of labor for producing bicycles.

(4 pts.) What happens to bicycle supply?

(6 pts.) What happens to bicycle demand?

Since a change in costs to produce the bicycle products is a supply

determinant or factor, an increase in costs would be expected to

decrease the supply of the bicycles. Because supply is a schedule of

how many units supplied or suppliers are willing to offer at

different prices, costs rise. The supply curve decreases or shifts to

the left. And since changes in the producer costs is not a demand

factor, there will be no impact upon demand.

Since a change in costs to produce the product is a supply factor, an

increase in costs would be expected to decrease bicycle supply. Remember

that supply is a schedule of how many units suppliers are willing to offer at

different prices. W hen costs rise, the supply curve decreases or shifts to the

left.

Since changes in producer costs is not a demand factor, there would be no

impact on demand.

10 of 10

Comments:

2. Question :

Student Answer:

Instructor

Explanation:

(TCO A) Ceteris paribus, Brand A Plain potato chips and Brand

B Plain potato chips are substitutes in consumption. The price of Brand A

Plain potato chips increases.

(4 pts.) a. What happens to the demand for Brand B Plain potato chips?

(6 pts.) b. What happens to the demand for Brand A Plain potato chips?

Because we are dealing with substitute products and because the

price of chip A has rise, and consumers don't feel...