Exam 4: The Market Forces of Supply and Demand

Given the following demand schedule, graph Lee's weekly demand curve for coffee. $\begin{array}{|c|c|}\hline \text { Price of Coffee (\$) } & \text { Cups of Coffee } \\\hline 5.00 & 0 \\\hline 4.00 & 4 \\\hline 3.00 & 8 \\\hline 2.00 & 12 \\\hline 1.00 & 16 \\\hline .00 & 20 \\\hline\end{array}$

Suppose a drought reduces the production of brussels sprouts in Australia, but simultaneously a new study finds that they have cancer-curing properties.One would expect:

When large areas of the US Pacific North-West were protected from logging in 1990 (to conserve spotted owl habitat), this is likely to have caused the equilibrium price of logs to increase and the equilibrium quantity of logs sold to decrease.

A market where there is only one seller is called a:

A market with many sellers offering slightly different products is called a monopoly.

Suppose that a decrease in the price of X results in more of good Y sold.This would mean that X and Y are:

If demand increases and supply simultaneously decreases, equilibrium price will rise.

The quantity demanded of a product is positively related to the price.

Demand for which of the following goods will fall as income rises?

Suppose that the number of buyers in a market increases and expectations of the price of the good indicate that its price will rise in the future.What would we expect to happen in the market?

Suppose at the current price of sugar, sugar suppliers have a surplus.This must mean that:

A demand curve is:

In a monopoly market, equilibrium is always achieved.

A market demand is:

If sellers are price makers, then individually:

In addition to price, the determinants of individual supply include input prices, technology and expectations.

If mad cow disease causes a beef-scare in Europe, demand for wild meat like deer or kangaroo is likely to shift to the right in that market.

An increase in the price of a product will reduce the amount of it purchased because:

For each of the following situations in the wheat market, determine whether the quantity demanded changes, or the demand curve shifts and determine the direction of the change. a.consumer income increases b.the price of wheat increases c.scientists determine that eating wheat causes high blood pressure d.the price of oats increases e.in June, insects destroy part of the country's wheat crop

The market-clearing price will always be lower than the equilibrium price.