Exam 4: Demand, supply, and Equilibrium

The figure below shows the supply curves for gasoline for two oil companies (MaxOil and MagnusPetro). It would be useful to find the equations of the two supply curves to answer the questions below. -Refer to the figure above.MagnusPetro is willing to sell the ________ for ________.

With real-world examples,illustrate the various factors that can cause a shift in the demand curve of a commodity.

The acai berry and products made from it are a popular dietary supplement,believed to reverse diabetes and lead to weight loss.Suppose that a peer-reviewed medical study reveals that there are no health benefits from consuming acai berry products.The likely effect of this medical study will be to ________.

If all sellers and all buyers face the same price during an exchange,it is referred to as the ________.

The table below provides data on opium sales and farmgate prices of opium in Afghanistan from 1994 to 2008. -Refer to the table above.From 2000 to 2001,opium sales fell by 95 percent and opium prices increased by 975 percent.If you are told that demand curve for opium in Afghanistan remained constant from 2000 to 2001,what was the likely change in opium supply?

Other things remaining same,a rightward shift in the demand curve will lead to a(n)________.

Which of the following statements correctly describes a perfectly competitive market?

What is the difference between the following two situations? a)A shortage in the market for lightbulbs b)A surplus in the market for lightbulbs Illustrate your answers with the help of suitable diagrams.

In competitive markets,firms ________.

Assume that a seller in a perfectly competitive market charges more than the equilibrium price.It is likely that this seller will ________.

Scenario: Suppose that the government imposes a price control on gasoline where the legal price is set at $1.50 per gallon while the equilibrium price would be $2.25. A shortage ensues. Worried that you may not have enough gas to commute to school and do errands, you get up before dawn to go to a gas station to fill up the tank. But you find yourself waiting in a long line. Fortunately, the station did not run out of gas before your turn came up, and you were happy to drive away with a full tank. -Refer to the scenario above.Your total cost of getting gas ________.

The figure below shows Sue's and Carlos' demand curves for gasoline. It would be useful to find the equation of the demand curves to answer the questions below. -Refer to the figure above.If the price of gasoline is 3.00 euros per liter,the total quantity of gasoline demanded is ________ liters.

Which of the following statements correctly describes perfectly competitive market equilibrium?

Scenario: A market researcher asks three consumers, A, B, and C, about their willingness to pay for different quantities of a 20-ounce bottle of Lemon-Lime Gatorade. She collects the following information. -Refer to the scenario above.Which consumer has the highest willingness to pay for Gatorade?

Which of the following statements correctly describes a competitive market?

Scenario: Suppose that the government imposes a price control on gasoline where the legal price is set at $1.50 per gallon while the equilibrium price would be $2.25. A shortage ensues. Worried that you may not have enough gas to commute to school and do errands, you get up before dawn to go to a gas station to fill up the tank. But you find yourself waiting in a long line. Fortunately, the station did not run out of gas before your turn came up, and you were happy to drive away with a full tank. -Refer to the scenario above.For the last gallon of gas that the seller is willing to produce at $1.50,the consumers are willing to pay ________.

The figure below shows Sue's and Carlos' demand curves for gasoline. It would be useful to find the equation of the demand curves to answer the questions below. -Refer to the figure above.If the price of gasoline is 12.00 euros per liter,the total quantity of gasoline demanded is ________ liters.

A seller who is a price-taker charges ________.

Which of the following examples best describes the concept of diminishing marginal benefit?

Assume that the supply curve for a commodity shifts to the left and the demand curve shifts to the right,both by the same degree.Then,in comparison to the initial equilibrium,the new equilibrium will be characterized by ________.