Exam 4: Demand, Supply, and Market Equilibrium

Figure 4.5 -Figure 4.5 illustrates the supply of guitars. If firms expect the price of guitars to go up after Christmas, then before Christmas this would most likely cause a movement from:

What is the difference between "an increase in supply" and "an increase in quantity supplied" of a good?

A minimum supply price is defined as:

If consumers have an expectation of a product's price increasing in the near future, they will usually:

A permanent excess supply of a product is possible when the government sets a minimum price that is _______than the equilibrium price.

Draw a graph to illustrate the effect of higher gasoline prices on the demand for large SUVs. What is the relationship between gasoline and SUVs?

Figure 4.7 -If supply decreases in Figure 4.7, then the equilibrium:

A decrease in the tuition (i.e., price) that a public university charges would result in:

Suppose that the Surgeon General releases a study suggesting that orange juice consumption reduces the risk of cancer. As a result of the study, we could predict that the demand curve for orange juice will _______ and the equilibrium price will _______.

Bananas and apples are substitutes. When the price of bananas falls and a technological advancement in apple production occurs at the same time:

Suppose that a new study is released stating that consumption of orange juice (a substitute for apple juice) reduces the risk of cancer and a major freeze destroys half of the country's apple crop. What happens to the price and quantity of apple juice?

What is the difference between an "individual demand curve" and a "market demand curve"?

Figure 4.4 -Figure 4.4 illustrates the demand for guitars. A decrease in the demand for guitars is represented by the movement from:

When the quantity of a product demanded by buyers equals the quantity supplied, it is called _______ .

If the cost of producing a product goes down, this will cause the equilibrium price of the product to go down and the equilibrium quantity of the product to go up.

Figure 4.1 -Refer to Figure 4.1 that shows Mary and Tom's individual demand curves for meals per week at Fratelli's Italian Restaurant. Assuming Mary and Tom are the only consumers in the market, what is the market quantity demanded at a price of $15?

Two goods are substitutes if an increase in the price of one good leads to an increase in demand for the other.

As the price of a product rises, the demand for the product falls.

If the government imposes a price ceiling that is below the equilibrium price, then the market will experience:

A normal good is defined as a good for which demand decreases when: