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

Assume that a hurricane in Brazil destroys half of the coffee crop. Considering that Brazil is a major coffee producing country, consumers expect the price of coffee to increase in the near future. How does this reflect on the demand for coffee?

The table given below represents the supply schedules of the only three DVD producers in the market for DVDs. Table 3.2 $\begin{array}{|cccc|}\hline\text { Supply 1 } & \text { Supply 2 } & \text { Supply 3 } & \text { Price per DVD (\$) } \\60 & 30 & 12 & 5 \\50 & 25 & 9 & 4 \\40 & 20 & 6 & 3 \\30 & 15 & 3 & 2 \\20 & 10 & 0 & 1\\\hline\end{array}$ -The market supply curve for any product:

A market survey conducted by an electronics manufacturer reported a year on year growth in the sale of television sets, along with an increase in the selling price. Which of the following could be a likely cause for this situation?

Every Friday night Elizabeth either goes bowling or goes to the movies. Because the price of bowling went up, Elizabeth now sees more movies. Elizabeth's behavior would be best described as a change in which determinant of demand?

The table given below reports the quantity demanded and supplied of a commodity in a market at different price levels. Table 3.4 $\begin{array}{|ccc|}\hline \text { Price (\$) } & \text { Quantity Demanded } & \text { Quantity Supplied } \\1 & 1,500 & 500 \\2 & 1,000 & 700 \\3 & 900 & 900 \\4 & 600 & 1,100 \\5 & 400 & 1,300\\\hline\end{array}$ -Consider the market described by Table 3.4. Identify the correct statement.

The demand for luxurious goods are usually unaffected by an increase in income.

Which of the following determines the quantity demanded of a commodity?

If demand increases and supply decreases, then equilibrium price must decrease, but equilibrium quantity is indeterminate.

Barter can best be defined as:

When a freely functioning market is in disequilibrium:

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 $2:

When the price ceiling on eggs is lifted, there is a shortage of eggs in the market.

Other things remaining the same, an individual demand schedule shows the various quantities of a good:

In general, the purpose of markets is to facilitate the exchange of goods and services between buyers and sellers.

The term barter refers to exchanges made:

Last year a firm made 1,000 units of its product available at a price of $5 per unit. This year the firm will still make 1,000 units available, but only if the price is $7 per unit. What is most likely to have happened?

A supply curve slopes downward because of the law of supply.

Inferior goods are low quality goods that people prefer to buy less of.

In the figure given below D₁ and S₁ are the initial demand and supply curves for a commodity in the market. Figure 3.3 -If both supply and demand for a good increase, which of the following will definitely happen?