Exam 4: The Market Forces of Supply and Demand

Suppose that demand for black-market koala skins decreases AND supply decreases because of falling koala populations.What would happen in the black market for koala skins?

Graph 4-3 -Refer to Graph 4-3.Suppose we observe the movement from point B to point A on the graph.This would be caused by:

A reduction in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Because consumers can now buy books online and get them shipped, this leads to less competition.

The internet has enabled markets to move towards the competitive model.

If a rise in the price of a visit to the gym causes an increase in the demand for movie tickets, visits to the gym and trips to the movies are complements.

Graph 4-5 -Refer to Graph 4-5.According to the graph, at a price of $7:

Graphically, the market demand curve is:

Table 4-1 A market is represented by the table below: Quantities demanded: Price of the good John Lee Amy Jean \ 0.50 36 25 12 5 1.00 30 22 8 4 2.00 25 20 3 3 3.00 20 19 1 2 4.00 10 18 0 1 5.00 5 17 0 0 -Refer to Table 4-1.If the price increases from $1 to $4:

If the price of timber falls:

Tastes and expectations are not determinants of individual demand.

What is the practical purpose of ensuring ceteris paribus when explaining the results from a demand and supply model?

Graph 4-4 -Refer to Graph 4-4.On the graph, the movement from S to S1 could be caused by:

A supply curve slopes upward because, ceteris paribus, a higher price means a greater quantity supplied.

If the government imposes a price control on the price of wine so that no bottle can be sold for more than $15, you would expect:

A competitive market is a market in which there are enough buyers and sellers that each has a negligible impact on the market price.

If a good is 'normal', then an increase in income will result in:

In a free market system, what coordinates the actions of millions of people with their varying abilities and desires?

A game console and games designed for that console are substitute goods.

Graph 4-3 -Refer to Graph 4-3.The movement from point A to point B on the graph is called: