Exam 5: Supply, Demand, and Price: Applications

The lower the price of medical care in general,the higher the ____________________________ medical care and the ______________________ specific items that make up medical care (such as x-rays). The result will be a _______________ price for the specific items that make up medical care.

Discuss three possible solutions for reducing traffic congestion on freeways.Be sure to explain what effect each would have on the supply and/or demand for freeway space.

Exhibit 5-4 -Refer to Exhibit 5-4. If television studio executives choose to charge a price of PB to view the taping of all shows,they will find that there is a shortage of tickets to view the taping of show ___________ and a surplus of tickets to view the taping of show ______________.

Using supply and demand analysis,explain why there is sometimes a surplus of seats to watch a television show being taped and other times there is a shortage of such seats. Assume that tickets to view the taping of a television show are free of charge.

At college X,students pay $3,000 less than the equilibrium tuition.At college Y,students also pay $3,000 less than the equilibrium tuition.If the supply is the same at both colleges,it follows that the shortage will be greater at

Exhibit 5-4 -Refer to Exhibit 5-4. If tickets for viewing television show tapings are free,for which show will fans most likely have the longest wait to get tickets?

Exhibit 5-5 -Refer to Exhibit 5-5.If the airline charges a price that is between P₁ and P₂ for both aisle seats and middle seats,the result will be

Profit can be earned by buying _____________ and selling ____________________.

When universities charge students less than the equilibrium tuition for admission,they have to impose some nonprice-rationing device.

The supply curve for space on the freeway is perfectly horizontal.

There is no toll charge to drive on freeway A.If there is freeway congestion at 9 a.m.,there will be greater freeway congestion at 11 a.m.if

If the quantity demanded of medical care is higher at a zero price than at some positive price,then it follows that the demand for those specific items that make up health care will be higher (than it would be if the quantity demanded of health care were lower).

The demand for seats in 10 a.m.classes at the university is higher than the demand for seats in 8 a.m.classes.The supply of seats is fixed.If the university can only charge a single price and wishes to maximize the total number of seats purchased during the day,it should set the price

If new legislation allowed patients to sue their health-maintenance organization (HMO),we would expect the supply curve for HMO-provided health care to shift to the left and the price of such coverage to rise.

A toll of $1 per car is imposed on a road regardless of time of day.If the toll creates equilibrium travel flows at the busiest time of day,it will create a __________ at all other times.

The lower the price of medical care in general,the higher the ____________________________ medical care and the ______________________ specific items that make up medical care (such as x-rays).

Suppose that there are two laws proposed for eviction notices.Plan A requires landlords to give a renter 30 days to vacate an apartment once he has been served an eviction notice.Under Plan B,he has 60 days to vacate an apartment once he has been served an eviction notice.It follows that landlords will find

The ticket price of zero for the viewing of a television show taping often results in a shortage of tickets which are frequently rationized on a first-come-first-served basis.

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.Which toll creates equilibrium at 8a.m.?

High demand for a product does not necessarily mean a high quantity demanded for that product if the price is high enough.