Exam 3: Markets, Demand and Supply, and the Price System

If more firms enter the telecommunications industry, we can expect the equilibrium price of telecom services to decrease and the equilibrium number of services to increase.

The demand schedule is a price list for a fixed basket of consumer goods following a particular format.

The demand curve of a commodity slopes downward because of:

The table given below reports the quantity demanded and supplied of a commodity at different prices in a market. Table 3.5 $\begin{array}{|ccc|}\hline\text { Quantity Demanded }& \text { Price per Unit (\$) } &\text { Quantity Supplied }\\10 & 5 & 50 \\20 & 4 & 40 \\30 & 3 & 30 \\40 & 2 & 20 \\50 & 1 & 10\\\hline\end{array}$ -Refer to Table 3.5. If government imposes a price ceiling of $4:

In the figure given below D₁ and S₁ are the original demand and supply curves. Figure 3.1 -Refer to Figure 3.1. If demand shifts from D₁ to D₂ and supply shifts from S₁ toS₂:

Which of the following will cause an increase in the quantity demanded of ice cream at an ice cream store?

Which of the following is not an example of a price ceiling?

The below figure shows the demand and supply of DVD rentals in a city. S₁ and D₁ are the original supply and demand curves. The demand curve shifts from D₁ to D₂. Figure 3.4 -Refer to Figure 3.4 and identify the true statement.

According to the law of demand, if the price of movie rentals decreases, ceteris paribus,:

Which of the following statements correctly defines the law of demand?

Other things remaining the same, when a fall in the price of one good is followed by an increase in the demand for another good, both goods are said to be:

A sharp increase in gasoline prices will cause the supply curve for trucking services to shift to the right.

In the figure given below D₁ and S₁ are the initial demand and supply curves for a commodity in the market. Figure 3.3 -Refer to Figure 3.3. If the change in the demand in this market occurred before the change in supply, then starting from the initial equilibrium:

The figure given below represents the equilibrium in the market for bicycles under different demand and supply situations. The vertical axis in each panel shows the price of bikes. Figure 3.2 -Refer to Figure 3.2. Which of the following panels represents the equilibrium situation in the bicycle market, if there were an increase in the price of metal used in the production of bicycles?

The downward slope of the demand curve is attributed to:

A rightward shift of a market supply curve might be caused by:

Assume that the supply curve for tomatoes is upward sloping. If the price per pound increases from $0.99 to $1.89, a greater quantity of tomatoes will be supplied to the market.

_______ ensure that resources are allocated to where they are most highly valued.

Other things remaining the same, if a large part of the population decided against having soda for health reasons, this would result in:

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices. Table 3.1 $\begin{array}{|cccc|}\hline\begin{array}{c}\text { Price per } \\\text { DVD (\$) }\end{array} & \begin{array}{c}\text { Quantity } \\\text { Demanded 1 }\end{array} & \begin{array}{c}\text { Quantity } \\\text { Demanded 2 }\end{array} & \begin{array}{c}\text { Quantity } \\\text { Demanded 3 }\end{array} \\5 & 10 & 15 & 5 \\4 & 20 & 25 & 15 \\3 & 30 & 35 & 25 \\2 & 40 & 45 & 35 \\1 & 50 & 55 & 45 \\\hline\end{array}$ -Refer to Table 3.1. Calculate the market demand at prices $5, $4, $3, $2, and $1 respectively.