Exam 3: Supply and Demand

TABLE 3-1 -Refer to Table 3-1. It illustrates the demand schedules for gourmet ice cream of two individuals and the rest of the market. At $4, what would the quantity demanded in the market be?

What do the income and substitution effects provide an explanation for?

Why does the quantity of a good demanded decrease when its price increases?

Increasing government taxation or regulation of an industry generally increases the supply of goods.

What does an upward-sloping supply curve show?

What is the difference between a change in demand and a change in quantity demanded?

What are the five things that will shift a demand curve to the right?

Roxanne considers movie tickets and DVD rentals to be substitute forms of entertainment. What will an increase in the price of a DVD rental likely result in for Roxanne?

If the demand for milk is downward sloping, then what will an increase in the price of milk result in?

If there are widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, what is the likely economic effect on the U.S. demand curve for beef from Canada?

What will occur in the market if producers expect the price of computers to fall in the near future?

A competitive market has many buyers and sellers, each with very little market power.

What is the difference between a change in quantity supplied and a change in supply?

In a competitive market, how are prices determined?

Ceteris paribus, if the price of lumber increases, we would expect an increase in the supply of lumber.

Which of the following statements about the demand curve for a typical good is the most accurate?

According to the substitution effect, what impact will an increase in the price of oranges have on consumers?

A market demand curve is constructed by horizontally summing individual demand curves.

Ceteris paribus, which of the following statements describes a market when transportation costs are high relative to selling prices?

If watermelons are normal goods, the demand for them will rise as the income of consumers rises.