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Exam 4: The Market Forces of Supply and Demand

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Question 311

Multiple Choice

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If a good is normal, then an increase in income will result in a(n)

A) increase in the demand for the good.
B) decrease in the demand for the good.
C) movement down and to the right along the demand curve for the good.
D) movement up and to the left along the demand curve for the good.

E) C) and D)
F) A) and B)

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Question 312

Multiple Choice

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Figure 4-18 -Refer to Figure 4-18. At what price would there be an excess supply of 200 units of the good?

A) $15
B) $20
C) $30
D) $35

E) B) and D)
F) B) and C)

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Question 313

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Most studies have found that tobacco and marijuana are complements rather than substitutes.

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, the approach of Thanksgiving would cause a move from

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, if the size of the shift of the demand curve is larger than the size of the shift of the supply curve, then the equilibrium quantity rises.

Scenario 4-1 Suppose the demand schedule in a market can be represented by the equation , where is the quantity demanded and is the price. Also, suppose the supply schedule can be represented by the equation , where is the quantity supplied. -Refer to Scenario 4-1. Suppose the price is currently equal to 10 in this market. Is there a shortage or surplus in this market, and how large is the shortage/surplus?

Supply and demand together determine the price and quantity of a good sold in a market.

When a shortage exists in a market, sellers

A decrease in demand will cause a decrease in price, which will cause a decrease in supply.

Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause an)

An increase in the number of college scholarships issued by private foundations would

When quantity supplied decreases at every possible price, we know that the supply curve has

The highest form of competition is called

Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. Which of the following changes would occur?

Suppose researchers discover a new, lower cost method of producing calculators. As a result, will the supply of calculators increase or decrease?

Given the table below, graph the demand and supply curves for flashlights. Make certain to label the equilibrium price and equilibrium quantity. a. What is the equilibrium price and the equilibrium quantity? b. Suppose the price is currently $5. What problem would exist in the market? What would you expect to happen to price? Show this on your graph. c. Suppose the price is currently $2. What problem would exist in the market? What would you expect to happen to price? Show this on your graph.

Which of the following is the least likely to be a competitive market?

Baseballs and baseball bats are substitute goods.

Figure 4-13 -Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $6 is

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires