Exam 4: The Market Forces of Supply and Demand

An increase in the price of a good would:

Which of the following would be an example of a monopoly?

Which of the following is an example of a market?

Table 4-2 $\begin{array}{|c|c|c|}\hline \text { Price }(\$) & \text { Quantity demanded } & \text { Quantity supplied } \\\hline 25 & 1 & 25 \\\hline 20 & 2 & 20 \\\hline 15 & 3 & 15 \\\hline 10 & 4 & 10 \\\hline 5 & 5 & 5 \\\hline\end{array}$ -Refer to Table 4-2.In the table shown, the equilibrium price and quantity would be:

Boris discovers a new technology that can produce economics textbooks at triple the speed that textbooks are usually produced.What effect can Boris expect this discovery to have on the supply of economics textbooks?

Suppose that John receives a pay increase.We would expect John's demand for:

How important are prices in allocating resources in a market economy?

Given the following information about three consumers' monthly demand, construct a market demand curve for potato chips.What would happen to demand if Ryan decided to buy popcorn and not to buy chips? Show this change on your graph. $\begin{array}{|c|c|c|c|}\hline \text { Priceper bag (\$) } & \text { Ryan's demand } & \text { Rusty's demand } & \text { Regan's demand } \\\hline .25 & 7 & 10 & 6 \\\hline .50 & 6 & 8 & 5 \\\hline .75 & 5 & 6 & 4 \\\hline 1.00 & 4 & 4 & 3 \\\hline 1.25 & 3 & 2 & 2 \\\hline 1.50 & 2 & 0 & 1 \\\hline\end{array}$

A reduction in an input price will cause a change in quantity supplied, but not a change in supply.

Economists can use which of the following to illustrate the law of demand?

A market is a:

Which of the following is a determinant of demand?

Normal and inferior goods are substitutes.

The following table shows the demand and supply of backpacks made by a Melbourne designer whose products sell exclusively to a youth market.Graph both the demand and supply curves and label the equilibrium price and quantity.Now assume that a famous celebrity starts wearing the backpack everywhere, making it very popular with young people.Young people are now willing to purchase 300 more backpacks per year at every price.Show this change on your graph and explain what has happened to equilibrium price and quantity as a result. $\begin{array}{|c|c|c|}\hline \text { Price of Backpack }(\$) & \text { Quantity demanded per year } & \text { Quantity supplied per year } \\\hline 210 & 800 & 5100 \\\hline 180 & 2000 & 4300 \\\hline 130 & 3000 & 3000 \\\hline 100 & 5000 & 1200 \\\hline 70 & 6000 & 800 \\\hline 50 & 8000 & 500 \\\hline\end{array}$

What are the determinants of individual demand and individual supply?

Which of the following is NOT a step for analysing changes in equilibrium?

Generally, the market for water in your town would be considered:

If nothing else changes, a rise in the price of a good leads to an increase in the quantity supplied of a good.This is known as:

Firms that sell their products in a competitive market have limited pricing power because:

To represent the effect of a price increase for coffee: