Page 44 - 2023-bfw-Macro-Krugman-Econ-4e
P. 44
ModULE 1.5
5. A technological advance in textbook production will 7. Starch from the stalks of potato plants is used to
lead to which of the following? make packing peanuts, a complement in production.
a. a decrease in textbook supply A decrease in potato demand that lowers potato prices
b. an increase in textbook demand will cause which of the following in the packing-peanut
c. an increase in textbook supply market?
d. a movement along the supply curve for textbooks a. an increase in supply and no change in demand
e. an increase in textbook prices b. an increase in supply and a decrease in demand
6. Expectations among hiking-boot makers that boot c. a decrease in both demand and supply
prices will rise significantly in the future will lead to d. a decrease in supply and no change in demand
which of the following now? e. a decrease in supply and an increase in demand
a. an increase in boot supply
b. no change in boot supply
c. a decrease in boot supply
d. a movement to the left along the boot supply curve
e. a movement to the right along the boot supply curve
®
Tackle the AP Test: Free-Response Questions
1. Tesla Motors makes sports cars powered by lithium
batteries. Rubric for FRQ 1 (5 points)
a. Draw a correctly labeled graph showing a Price
hypothetical supply curve for Tesla sports cars.
b. On the same graph, show the effect of a major new
discovery of lithium that lowers the price of lithium.
Explain.
c. Suppose Tesla Motors expects to be able to sell its
cars for a higher price next month. Explain the effect
that will have on the supply of Tesla cars this month. S S
®
2. Suppose AP Economics students at your school offer 1 2
tutoring services to students in regular economics Quantity of cars
courses. 1 point: Graph with “Price” or “P” on the vertical axis and
a. Draw a correctly labeled graph showing the supply “Quantity” or “Q” on the horizontal axis
curve for tutoring services measured in hours. Label 1 point: A positively sloped curve labeled “Supply” or “S”
the supply curve “S .”
1
b. Suppose the wage paid for babysitting, an alternative 1 point: A second supply curve shown to the right of the
original supply curve with a label such as 2 S , indicating that
®
activity for AP Economics students, increases. it is the new supply curve
Explain how the wage increase affects the supply of 1 point: Lithium is an input into the production of Tesla
tutoring. Show the effect of this wage increase on cars. A decrease in the price of lithium will increase the sup-
the graph you drew for part a. Label the new supply ply of Tesla cars.
curve “S .”
2
®
c. Suppose instead that the number of AP Economics 1 point: Correct explanation that the expectation of higher
prices next month would lead to a decrease in the supply
students increases. Explain how the change in the of Tesla cars this month because the company will want to
®
number of AP Economics students affects the sell more of its cars when the price is higher
supply of tutoring. Show the effect of this increase in
®
AP Economics students on the same graph you
drew for parts a and b. Label the new supply curve
“S .” (5 points)
3
Module 1.5 Review 45
Copyright © Bedford, Freeman & Worth Publishers.
Strictly for use with its products. For review purposes only. Not for redistribution.
02_APKrugman4e_40932_MacroU01_002_062.indd 45 05/07/22 10:51 AM