Exam 2: Market Transactions: Demand and Supply Analysis

When demand increases and the supply curve remains unchanged, both the equilibrium price and the equilibrium quantity decrease.

A change in the number of suppliers will cause both the demand curve and the supply curve to shift.

According to the text, which of the following occupations has had sluggish growth in supply, and bigger increases in demand, since 1980?

The amount by which quantity supplied exceeds quantity demanded is called a shortage.

The demand curve slopes downward to the right because buyers are willing and able to purchase less at higher prices.

A technological advance reduces the cost of manufacturing digital cameras. As part of the transition to a new equilibrium in the digital camera market, there would occur an

Market equilibrium occurs when the price of a product adjusts so that the quantity that consumers will purchase at that price is identical to the quantity that suppliers will sell.

Suppose that both demand and supply curves shift. If the equilibrium price decreases, but equilibrium quantity remains unchanged, this result can be explained by a(n)

Assume that the supply of computers increased, while at the same time the demand for computers increased. The net effect of these two changes would be a(n)

A market is a mechanism through which buyers and sellers communicate to trade goods and services.

A severe drought causes a sharp decline in the peanut crop this year. This would be expected to cause peanut butter

Which of the following goods are likely to be classified as substitute goods?

Figure 2.1 The Market for Calculators -Refer to Figure 2.1. Initially, the market is in equilibrium at a price of $25 and quantity of 15 calculators. If union negotiations result in higher wages but not higher worker productivity, which of the following would best represent the new equilibrium price and quantity?

As the economy comes out of a recession, consumers start traveling more. What can be expected to happen to hotel room prices and quantities?

If the government decides to raise the tax on gasoline, what will happen in the gasoline market?

Figure 2.1 The Market for Calculators -Refer to Figure 2.1. Initially, the market is in equilibrium at a price of $25 and quantity of 15 calculators. If consumer incomes decrease and calculators are normal goods, which of the following would best represent the new equilibrium price and quantity?

The text indicates that if the government wishes to limit gasoline consumption through TGRs (tradeable gasoline rights), the system could be implemented on-site through the use of TGR

A ______ is a mechanism through which buyers and sellers communicate to trade goods and services.

Economists estimate that if the government wishes to reduce gasoline consumption by 20 percent, the gasoline tax would have to be high enough to raise the price by

According to the text, many economists believe an effective way to reduce congestion on roads at rush-hour times would be to