Exam 2: Supply and Demand

Suppose there is a linear downward-sloping demand curve and a linear upward-sloping supply curve for a good. The price of a substitute good increases and the price of an input to production also increases. Graph the original demand and supply curves, and the curves after the substitute good and input prices increase. How will the equilibrium price change after the substitute and input prices increase?

Suppose the demand curve for a good shifts rightward, causing the equilibrium price to increase. This increase in the price of the good results in

When a market is in disequilibrium consumers and producers change their behavior. As a result the market reaches equilibrium.

If the supply curve of a product changes so that sellers are now willing to sell 2 additional units at any given price, the supply curve will

A price ceiling that is set below the equilibrium price

Which of the following is NOT a characteristic of perfectly competitive markets?

According to Adam Smith's invisible hand

At equilibrium, quantity sold equals the quantity bought. This implies that

It is appropriate to use the supply-and-demand model in which of the following markets?

-The above figure shows four different markets with changes in either the supply curve or the demand curve. Which graph best illustrates the market for computers after technological advances in making computers occur?

A leftward shift of the supply curve will lead to a(n)

-The above figure shows the market for apples. If apple farmers convince the government to set a minimum price of $4 per pound, then

The Law of Supply states

If the government institutes a specific tax for a good that has a perfectly inelastic demand curve

Supply curves

Which of the following is NOT a characteristic of perfectly competitive markets?

When there is a binding price floor

Which of the following is NOT a characteristic of perfectly competitive markets?

Government actions can cause a

To determine the total demand for all consumers, sum the quantity each consumer demands