Exam 4: Demand, Supply, and Market Equilibrium

As a result of advances in technology, cellular telephones have become cheaper to produce. Illustrate the effect of this change on the market for cellular telephones.

If at a price of $1000, 8 different laptop manufacturers are willing to sell 20 laptops each. If the 8 manufacturers are the only sellers of laptops in the market, then at a price of $1000, there are laptops supplied in the market.

When consumers find their incomes increasing, they tend to buy more _______.

Suppose that the price of oranges increases and the quantity of oranges in the market decreases. Suggest two reasons why this might have happened.

Suppose that in October the price of a cup of cafe latte was $1.50 and 400 lattes were consumed. In November the price of a latte was $2.00 and 200 lattes were consumed. What might have caused this change?

The market demand curve is:

If an increase in income results in a decrease in the demand for Honda Civics, then Honda Civics are considered:

When a government pays a company for producing a product or good with the result that selling the product is more profitable regardless of the price so that the company will produce more of it, it is called a _______.

Using a graph, illustrate the effect that an increase in production costs will have on the equilibrium price and quantity of a good.

Figure 4.4 -Figure 4.4 illustrates the demand for guitars. Assume that guitars and guitar strings are complements. A decrease in the price of guitar strings would bring about a movement from:

Suppose that the Surgeon General releases a study suggesting that steak consumption increases the risk of cancer. As a result of this study, we would predict that the equilibrium quantity of steak will _______ and the equilibrium price of steak will _______.

A demand curve is defined as the relationship between:

Figure 4.4 -Figure 4.4 illustrates the demand for guitars. Assume guitars are an inferior good. An increase in income would bring about a movement from:

A government sometimes creates an excess supply of a product by setting a minimum price at which the product may be sold to consumers. This is sometimes called a:

If a government imposes a tax on the producers of a product, in addition to making the product more costly and less profitable, the tax will _______.

Becky demands more raisins as her income increases. From this, we can conclude that, for Becky:

Suppose that consumers expect that the price of a product will increase in the future. The result is that:

If incomes increase and Honda Civics are considered inferior goods, then

Peaches and cream are complements. When the price of peaches rises and the price of raw milk (used to make cream) rises:

Peaches and cream are complements. When the price of peaches falls, the equilibrium quantity of cream will and the equilibrium price of cream will _ .