Exam 3: Supply and Demand Theory

Suppose the government decides that every family should own its own home. To bring this about, the government decides to subsidize the home-construction industry by giving the home-construction companies $10,000 for every house that they build. As a result of this,

One reason that helps to explain the law of demand is the law of

A demand schedule is a numerical tabulation of the ___________________ of a good at different ____________________.

At a price of $9.99 per digital book, Danielle buys 3 digital books per month. When the price decreases to $7.99, Danielle buys 4 digital books per month. Jason says that Danielle's demand for digital books has increased. Is Jason correct?

On a supply-and-demand diagram, consider a price for which the horizontal distance to the supply curve exceeds the horizontal distance to the demand curve. There is a __________ at that price and the current price must be __________ the equilibrium price.

Exhibit 3-7 -Refer to Exhibit 3-7. If S₁ is the relevant supply curve, a decrease in the price of a resource that is necessary for the production of good X causes

Labor is a resource that is necessary to produce many goods. "If the price of labor falls," says the economist, "the prices of goods will soon follow." How does this work?

Exhibit 3-16 -Refer to Exhibit 3-16. Which of the graphs best represents the market for theater tickets that are already sold out on the day of the performance?

Suppose that for a given good demand increases and supply decreases at the same time. If demand increases by a lesser amount than supply decreases, then equilibrium price __________ and equilibrium quantity __________ for that good.

Exhibit 3-5 -Refer to Exhibit 3-5. In the market shown, if equilibrium was originally at point W and is now at point X, the new equilibrium price is __________ it was originally and the new equilibrium quantity is ____________ it was originally.

If the demand for a good rises by more than the supply of the good falls, then the good's equilibrium price will __________ and its equilibrium quantity will __________.

__________ is the number of units that individuals are __________ to buy at a particular price during some time period.

Exhibit 3-7 -Refer to Exhibit 3-7. If S₁ is the relevant supply curve, an increase in the price of good X may cause

If the maximum price a person is willing and able to pay for a good is $50, and consumers' surplus is $20, then it follows that the price the buyer paid for the good is

The equilibrium price of a good in market A is $24. The current price of the good in market A is $21. At this price, a(n) ________________________ of the good exists in market A.

Exhibit 3-13 -----------------------------Quantity Demanded------------------------------------- Assume that Jose, Kaitlyn, Leah, and Maria are the only buyers in this market. -Refer to Exhibit 3-13. Fill in blanks (A) and (B) respectively with the market quantity demanded at each given price.

There are two universities, A and B, in a city. Tuition rises at University A and, as a result, the demand for attending University B rises. It follows that educational services at the two universities are

An "increase in demand" means that

Exhibit 3-8 -Refer to Exhibit 3-8. A price of $1 will result in a ___________________ in this market which will cause the price of the product to gravitate ________________.

In general, all markets equilibrate at the same speed.