Exam 4: Bringing Supply and Demand Together

Whenever there is a surplus at a particular price, what will the quantity sold at that price be equal to?

Suppose there is a reduction in consumer income and an increase 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 of air travel?

Assume a price ceiling is imposed at the current equilibrium price in the market for wheat. If the supply of wheat then decreases as a result of bad weather, what will result?

Which of the following would most likely increase the price of chicken?

TABLE 4-2 -Refer to Table 4-2. If D₂ and S₁ represent the demand and supply schedules in a particular market, then what are the equilibrium price and quantity in that market?

FIGURE 4-2 -Refer to Figure 4-2. Under what circumstances would a movement from S₁ to S₂ occur?

In an attempt to reduce poaching of elephant ivory tusks, officials in Kenya burned illegally gathered ivory. Using your understanding of shifts in supply and demand, will this turn out to be a helpful or hurtful move on the Kenyan government's part?

Assume that coffee and tea are substitutes for each other. If weather conditions cause a substantial portion of the available coffee crop to be destroyed, what will be the result?

If the government wants to increase the minimum wage for workers, what type of policy should they implement?

TABLE 4-2 -Refer to Table 4-2. If D₂ and S₂ represent the demand and supply schedules in a particular market, then what are the equilibrium price and quantity in that market?

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

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 $10?

TABLE 4-1 -Refer to Table 4-1. What is the equilibrium price?

Price "floors" get their name from the fact that they represent a minimum price below which the legal price cannot fall.

If a shortage currently exists in the market for strawberries, which of the following statements is most accurate?

The diagram below represents the market for butter. FIGURE 4-1 -Refer to Figure 4-1. If a price ceiling of $2 is imposed, how many units of butter will be sold?

TABLE 4-3 -Refer to Table 4-3. The government imposes a $1.20 price ceiling at the same time that there is a substantial decrease in the price of sport utility vehicles. (Assume that sport utility vehicles have very high fuel consumption.) What is the expected result?

With knowledge about the direction (but not magnitude) of simultaneous supply and demand curves shifts, one can always determine the direction of changes in both equilibrium price and quantity.

FIGURE 4-2 -Refer to Figure 4-2. Which movement of equilibrium illustrates an increase in the quantity supplied, but NOT an increase in supply?

If the supply curve for housing has the normal positive slope, what is the likely outcome of rent controls?