Exam 4: Bringing Supply and Demand Together

Which of the following is NOT a result of rent controls?

TABLE 4-3 -Refer to Table 4-3. What will result if the government imposes a $1 price ceiling?

When both the supply and demand curves shift in the same direction, the change in equilibrium quantity will be in the same direction as the shifting curves.

There is an increase in demand for personal computers at the same time their input costs fall. What can we expect?

Many cooks view butter and margarine to be substitutes. If the price of butter rises, how will the market for margarine be affected?

There is an increase in both consumer income and in the price of jet fuel, an important resource used to produce air travel. If air travel is a normal good, how will these changes influence the price and quantity purchased of air travel?

If both the supply and demand for computer games increase, what will happen to the equilibrium price and quantity of the game?

Ceteris paribus, if doctors were to discover that eating spinach reduces a person's cholesterol (a major cause of heart disease); the demand curve for spinach will shift to the right.

Which of the following events will cause the supply curve of books (which are produced using paper made from trees) to shift to the left?

TABLE 4-2 -Refer to Table 4-2. Suppose the demand schedule for Good A changes from D₁ to D₂ because the price of a related good, Good B, increases. Based on this, what can we conclude?

Are markets always in equilibrium?

A more efficient means of processing tree bark to produce an anticancer drug is discovered. How does this affect the supply curve for the drug?

TABLE 4-2 -Refer to Table 4-2. Suppose that D₁ and S₂ are the demand and supply schedules for Product A. What is the result if the government imposes a price floor of $12?

TABLE 4-4 -Refer to Table 4-4. If the government intervenes in the market for milk and sets a price ceiling of $0.90 per litre, what will be the result?

What does the imposition of a price ceiling on a market often result in?

Explain how both sales and long lines prior to store openings are characteristic of markets in disequilibrium.

If both market demand and supply increase simultaneously, what will happen to equilibrium quantity and equilibrium price?

The diagram below represents the market for butter. FIGURE 4-1 -Refer to Figure 4-1. What is the equilibrium price of butter?

TABLE 4-3 -Refer to Table 4-3. Assuming the market for gasoline is initially in equilibrium and that sport utility vehicles have very high fuel consumption, what is likely to happen when there is a significant decrease in the price of sport utility vehicles?

Serious natural disasters like hurricanes and tornadoes cause widespread and extensive damage to buildings. As a result of a natural disaster, what would you expect to happen in the market for building supplies?