Exam 4: Bringing Supply and Demand Together

What will tend to happen in the market for ballet performances after the lighting and stage technician union wins a 17 percent wage increase for its members?

Steel mill wage costs increase by 18 percent over a year. What is the likely economic effect on the market for steel?

Price ceilings cause surpluses.

Either a price ceiling or a price floor will result in an amount bought and sold that is less than the equilibrium quantity.

In an effort to reduce the surplus of dairy products, agricultural legislation paid dairy farmers to slaughter their herds and sell them to packinghouses (meat producers) in 1996-1997. How did this influence the market for beef?

Assume a price floor is imposed at the current equilibrium price in the market for lettuce. If the demand for lettuce then increases, what will result?

Which of the following will result at the equilibrium price for gasoline?

Price reductions will usually result whenever the quantity supplied exceeds the quantity demanded at the current market price.

FIGURE 4-3 -Refer to Figure 4-3. Starting with initial curves D₀ and S₀, which movement is consistent with an increase in both income and population, assuming that wool products are normal goods?

TABLE 4-2 -Refer to Table 4-2. Suppose that D₂ and S₁ are the prevailing demand and supply curves for a product. What happens in the market if the demand schedule changes from D₂ to D₁?

TABLE 4-2 -Refer to Table 4-2. Suppose that D₁ and S₂ are the demand and supply schedules for Product A. What will be the result if the government imposes a price ceiling of $10?

In January, 2500 litres of ice cream were sold in Fredericton at $2 per litre. In February, 3000 litres were sold at $2.50 a litre. Which of the following is the most likely reason for this change in the price and quantity of ice cream sold?

FIGURE 4-2 -Refer to Figure 4-2. Which movement is consistent with an increase in supply?

When the demand and supply of grapes both increase at the same time, what will this result in?

If in one period the supply curve is located vertically above its position in an earlier period, what is this an example of?

Which of the following would cause the quantity of wheat bread demanded to increase, but NOT the demand for wheat?

What action by the government will always cause a surplus?

What will the invention of machinery that can double the amount of gold extracted from raw ore likely lead mining companies to do?

FIGURE 4-2 -Refer to Figure 4-2. Under what circumstances would a movement from D₁ to D₂ occur?

Suppose the equilibrium price of bread is $2.00 per loaf. If the government sets a price ceiling of $2.50 per loaf, what will be the result?