Exam 4: The Market Forces of Supply and Demand

Market demand is given as Qd = 200 - 2P. Market supply is given as Qs = 2P + 40. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Suppose there is an earthquake that destroys several seaside resorts. Which of the following would NOT occur as a direct result of this event?

In what type of market do we refer to buyers and sellers as "price takers"?

Market demand is given as Qd = 190 - 2P. Market supply is given as Qs = P + 10. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

What is an example of an inferior good?

Figure 4-7 -Refer to the Figure 4-7. What would cause the movement from point A to point B on the graph?

Figure 4-4 -Refer to the Figure 4-4. In this market, what would the equilibrium price and quantity be?

Assume the following demand and supply equations: Qd=900-20P, and Qs=150+10P. a) Graph the two curves. b) Calculate the slopes of the two curves. c) Calculate the equilibrium price and quantity. d) If the price was $30, how much would the quantity demanded be? (Show it on the graph) e) If the price was $30, how much would the quantity supplied be? (Show it on the graph)

-Refer to the Table 4-2. What is the space that would represent a decrease in equilibrium quantity and an indeterminate change in equilibrium price?

Holding all else constant, what will result from a higher price for ski-lift tickets?

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

-Refer to the Table 4-3. What happens if the price decreases from $1.50 to $1.00?

Market demand is given as Qd = 200 - 2P. Market supply is given as Qs = 2P + 40. What would result if the market price were $10?

You have decided to purchase a new Range Rover SUV. A friend tells you that Land Rover will be offering a $3000 rebate on Range Rovers starting next month. As a result of this information, what will happen to your demand curve for Range Rovers?

Market demand is given as Qd = 200 - 4P. Market supply is given as Qs = 6P. What would result if the market price were $30?

What impact does a person's expectations about the future have?

What happens if there is a shortage of a good at the current price?

Given a fixed demand curve, which of the following is affected when the price changes?

What does fewer sellers in the market cause?

Pens are normal goods. What will happen to the equilibrium price of pens if the prices of pencils rises, consumers experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to rise in the near future, the population increases, fewer firms manufacture pens, and the wages of pen-makers increase?