Exam 4: Bringing Supply and Demand Together

In September 2005,Hurricane Katrina,caused flood damage to many homes in Louisiana.Shortly thereafter,the price of plywood rose significantly.What do these events suggest?

FIGURE 4-5 -Refer to Figure 4-5.At price PR,which of the following will occur?

Which of the following is NOT likely to result from an increase in the federal minimum wage?

FIGURE 4-4 -Refer to Figure 4-4.Starting with initial curves D₀ and S₀,which movement is consistent with a decrease in both demand and supply?

A more efficient means of processing tree bark to produce an anticancer drug is discovered.How does this affect the supply curve for the drug?

Whenever there is a shortage at a particular price,what will the quantity sold at that price be equal to?

TABLE 4-3 -Refer to Table 4-3.What is the equilibrium price of gasoline?

Prices have soared for parking facilities in downtown Toronto in recent months.Pressure from voters has convinced the Toronto City Council to impose a price ceiling of $5 on all parking garages and lots per day.What effect will this likely have on the market for parking spaces in Toronto? Who will gain? Who will lose?

A surplus exists in the market for Barbie dolls at the prevailing price.What will eliminate the surplus?

If the government wants to increase the minimum wage for workers,what type of policy should they implement?

FIGURE 4-3 -Refer to Figure 4-3.Starting with initial curves D₀ and S₀,which movement is consistent with a successful advertising campaign that claims wool keeps you warm?

FIGURE 4-2 -Refer to Figure 4-2.Which movement of equilibrium illustrates an increase in the quantity supplied,but NOT an increase in supply?

A shortage exists in the market for corn at the prevailing price.What will eliminate the shortage?

In high schools,all teachers are paid the same based on years of experience,regardless of specialization.Beginning in the 1970s,a shortage of science and math teachers developed as private industry paid more for math and science skills than schools could offer.At the same time,a decline in the number of school-age children reduced the demand for all other teachers,which led to a surplus.An economist might suggest what sort of solution for both the resulting shortage and surplus?

Reuters News Service reports: "Canadian automobile sales tumbled 15 percent in March (2009)." Which of the following would explain this sales drop?

FIGURE 4-1 -Refer to Figure 4-1.If a price ceiling of $4 is imposed,how many units of butter will be sold?

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?

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 $6?

Nick is delighted to see that the price of his favourite food,black olives,has fallen.Which of the following could be responsible?