Exam 4: Demand and Supply Applications

Refer to the information provided in Figure 4.6 below to answer the question(s) that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. The area of [A + B + C] represents

Refer to the information provided in Figure 4.3 below to answer the question(s) that follow. Figure 4.3 -Refer to Figure 4.3. If the government will not allow retailers to charge less than $0.50 for a pencil, which of the following will happen?

Quantity demanded will equal quantity supplied if a ________ is set ________ the equilibrium price.

If a price is demand determined, then

If a price floor is set above the equilibrium price,

A U.S. tariff on oil would reduce the domestic quantity of oil supplied.

People scalping tickets for a jazz festival will be successful at selling the tickets for a profit

A government-imposed maximum price will have no economic impact if

Refer to the information provided in Figure 4.5 below to answer the question(s) that follow. Figure 4.5 -Refer to Figure 4.5. Assume that initially there is free trade. The quantity demanded of CD-Rom drives will be reduced by 3 million CD-Rom drives if the United States imposes ________ tariff per CD-Rom drive on imported CD-Rom drives.

An effective price floor results in a shortage.

Related to the Economics in Practice on page 83: When acquiring a ticket for a play takes a significant amount of time, the true economic cost of that ticket would include all of the following factors except

If the market price of coffee is $3.00 per pound but the government will not allow coffee growers to charge more than $2.00 per pound of coffee, which of the following will happen?

When supply is fixed, price is supply determined.

Queuing is a system of nonprice rationing.

Refer to the information provided in Figure 4.6 below to answer the question(s) that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. Consumer surplus is area [A + B + E] if price is

Establishing a list of favored customers is an alternative rationing mechanism to price rationing.

Refer to the information provided in Figure 4.4 below to answer the question(s) that follow. Figure 4.4 -Refer to Figure 4.4. If the United States levies no tariffs on imported oil, which of the following would occur?

Producer surplus describes a situation in which there is excess quantity demanded.

Nonprice rationing will happen whenever there is excess supply in a market.

Ration coupons are tickets or coupons that give someone a right to purchase a certain amount of a product each time period such as a month.