Exam 3: Market in Motion and Price Controls

?Exhibit ? Use the following information about demand and supply schedules to answer the question. Price D1 D2 S1 S2 \ 12 5 9 19 14 \ 10 8 12 17 12 \ 8 11 15 15 10 \ 6 13 18 13 8 \ 4 16 21 11 6 \ 2 18 24 9 4 -?Refer to Exhibit. Suppose that D₁ and S₁ are the prevailing demand and supply curves for a product. If the demand schedule changes from D₁ to D₂, then:

Exhibit Price per gallon Quantity Demanded (thousands of gallons) Quantity Supplied of ga soline (thousands of gallons) \ 4.50 600 2,000 \ 4.25 700 1,900 \ 4.00 800 1,800 \ 3.75 950 1,700 \ 3.50 1,200 1,600 \ 3.25 1,500 1,500 \ 3.00 1,800 1,400 \ 2.75 2,100 1,300 \ 2.50 2,400 1,200 -Refer to Exhibit. According to the data in the above table, the equilibrium price of gasoline is:

?Exhibit ? Use the following information about demand and supply schedules to answer the question. Price D1 D2 S1 S2 \ 12 5 9 19 14 \ 10 8 12 17 12 \ 8 11 15 15 10 \ 6 13 18 13 8 \ 4 16 21 11 6 \ 2 18 24 9 4 -Refer to Exhibit. Suppose that D₂ and S₁ are the prevailing demand and supply curves for a product. If the demand schedule changes from D₂ to D₁, then:

Which of the following is likely to result in a smaller equilibrium quantity exchanged?

Exhibit Price per gallon Quantity Demanded (thousands of gallons) Quantity Supplied of ga soline (thousands of gallons) \ 4.50 600 2,000 \ 4.25 700 1,900 \ 4.00 800 1,800 \ 3.75 950 1,700 \ 3.50 1,200 1,600 \ 3.25 1,500 1,500 \ 3.00 1,800 1,400 \ 2.75 2,100 1,300 \ 2.50 2,400 1,200 -Refer to Exhibit. The government imposes a $3.25 price ceiling at the same time there is a substantial decrease in the price of sport utility vehicles. (Assume that sport utility vehicles get very low mileage per gallon.) As a result, the:

Exhibit The diagram below represents the market for butter. -Refer to Exhibit. If a price ceiling of $2 is imposed, ____ units of butter will be purchased.

Exhibit Price per gallon Quantity Demanded (thousands of gallons) Quantity Supplied of ga soline (thousands of gallons) \ 4.50 600 2,000 \ 4.25 700 1,900 \ 4.00 800 1,800 \ 3.75 950 1,700 \ 3.50 1,200 1,600 \ 3.25 1,500 1,500 \ 3.00 1,800 1,400 \ 2.75 2,100 1,300 \ 2.50 2,400 1,200 -Refer to Exhibit. If the government imposes a $2.50 price ceiling:

Which of the following is likely to result in a lower equilibrium price?

Exhibit Price per gallon Quantity Demanded (thousands of gallons) Quantity Supplied of ga soline (thousands of gallons) \ 4.50 600 2,000 \ 4.25 700 1,900 \ 4.00 800 1,800 \ 3.75 950 1,700 \ 3.50 1,200 1,600 \ 3.25 1,500 1,500 \ 3.00 1,800 1,400 \ 2.75 2,100 1,300 \ 2.50 2,400 1,200 -Refer to Exhibit. Assuming the market for gasoline is initially in equilibrium, what is likely to happen when there is a significant decrease in the price of sport utility vehicles? (Assume that sport utility vehicles get very low gas mileage.)

In general, an increase in price could be caused by either:

?Exhibit ? Use the following information about demand and supply schedules to answer the question. Price D1 D2 S1 S2 \ 12 5 9 19 14 \ 10 8 12 17 12 \ 8 11 15 15 10 \ 6 13 18 13 8 \ 4 16 21 11 6 \ 2 18 24 9 4 -Refer to Exhibit. Suppose that D₂ and S₁ are the prevailing demand and supply curves for a product. If the supply schedule changes from S₁ to S₂, then:

Which of the following is likely to result in a higher equilibrium price?

?Exhibit ? Use the following information about demand and supply schedules to answer the question. Price D1 D2 S1 S2 \ 12 5 9 19 14 \ 10 8 12 17 12 \ 8 11 15 15 10 \ 6 13 18 13 8 \ 4 16 21 11 6 \ 2 18 24 9 4 -Refer to Exhibit Suppose that D₁ and S₂ are the demand and supply schedules for Product A. If the government imposes a price ceiling of $4:

Exhibit The diagram below represents the market for butter. -Refer to Exhibit. If a price floor of $4 is imposed, ____ units of butter will be purchased.

?Exhibit ? Use the following information about demand and supply schedules to answer the question. Price D1 D2 S1 S2 \ 12 5 9 19 14 \ 10 8 12 17 12 \ 8 11 15 15 10 \ 6 13 18 13 8 \ 4 16 21 11 6 \ 2 18 24 9 4 -Refer to Exhibit. Suppose that D₁ and S₂ are the demand and supply schedules for Product A. If the government imposes a price floor of $6:

?Exhibit ? Use the following information about demand and supply schedules to answer the question. Price D1 D2 S1 S2 \ 12 5 9 19 14 \ 10 8 12 17 12 \ 8 11 15 15 10 \ 6 13 18 13 8 \ 4 16 21 11 6 \ 2 18 24 9 4 -Refer to Exhibit. Suppose that D₁ and S₂ are the demand and supply schedules for Product A. If the government imposes a price ceiling of $6:

?Exhibit ? Use the following information about demand and supply schedules to answer the question. Price D1 D2 S1 S2 \ 12 5 9 19 14 \ 10 8 12 17 12 \ 8 11 15 15 10 \ 6 13 18 13 8 \ 4 16 21 11 6 \ 2 18 24 9 4 -Refer to Exhibit. If D₁ and S₁ represent the demand and supply schedules in a particular market, the equilibrium price and quantity are ____ and ____, respectively.