Exam 4: The Market Forces of Supply and Demand

Why do we aspire to achieve the equilibrium for a market? What happens when supply and demand are not equal? Give two examples of events that could cause the equilibrium of a market to shift.

Suppose that the demand for crocodile leather falls after a decrease in price of snake skin.This would mean that crocodile leather is:

In Australia, a public transport operator might be a monopolist.

Movies and popcorn are complementary goods.

Supply and demand determine prices and prices allocate the economy's scarce resources.

Graph 4-2 -Refer to Graph 4-2.On the graph, the movement from D to D₁ is called:

A decrease in the number of sellers supplying a good will shift the:

Suppose that the equilibrium price in a market is $100, but the existing market price is $80.What will happen in the market? What if the existing market price is $150?

New Zealand sphagnum moss is an input used in the production of orchids.If the price of sphagnum moss increases, but nothing else changes, this will cause:

At the equilibrium price:

The term ceteris paribus refers to a:

Demand curves are often upward sloping when prices are very high.

Analysing how an event affects a market can be accomplished in two steps.

Suppose Lee likes chicken curry a little bit more than fish and chips.Lee eats chicken curry twice as often as fish and chips.Now suppose the price of chicken rises.How would Lee's demand for fish and chips change, assuming everything else was constant?

The clothing market is a good example of perfect competition.

Andrew has shares in Qantas.Why would he be interested in the safety ratings of other airlines?

Graph 4-4 -Refer to Graph 4-4.On the graph, the movement from S to S1 is called:

A movement along a supply curve is called a change in supply, while a shift of the curve is called a change in quantity supplied.

If the price of tea increases, there is likely to be a rightward shift in the demand for coffee.

In economics, a market is a place where people buy fruit and vegetables.