Exam 4: Bringing Supply and Demand Together

Good A (an inferior good)and Good B (a normal good)are viewed by consumers to be substitute products.Suppose that the price of Good B falls at the same time that consumer income increases.What is the net effect of these two events on equilibrium in the market for Good A?

There is an increase in both consumer income and in the price of jet fuel,an important resource used to produce air travel.If air travel is a normal good,how will these changes influence the price and quantity purchased of air travel?

A safety report is released that contends that sport utility vehicles are prone to roll over during crashes.At the same time,the price of steel (used to produce motor vehicles),increases.What is the net effect of these two incidents on the market for sport utility vehicles?

Which of the following events will cause the quantity of newspapers sold to decline?

TABLE 4-2 -Refer to Table 4-2.If D₂ and S₁ represent the demand and supply schedules in a particular market,then what are the equilibrium price and quantity in that market?

Price "floors" get their name from the fact that they represent a minimum price below which the legal price cannot fall.

If the market for peaches is in equilibrium at $2.99 per pound,a decrease in the supply of peaches will cause a surplus of peaches at that price.

If both the supply and demand curves shift to the left,what can we expect?

If the price of pagers rose after simultaneous decreases in supply and demand for pager services,what could we conclude?

If the market for Rolex watches is in equilibrium,the quantity of watches demanded will equal the quantity of watches supplied.

If an effective rent ceiling is implemented,what would happen in the market for apartment rentals?

Which of the following would cause the quantity of wheat bread demanded to increase,but NOT the demand for wheat?

FIGURE 4-2 -Refer to Figure 4-2.Which movement of equilibrium illustrates a decrease in the quantity demanded,but NOT a decrease in demand?

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 $10?

TABLE 4-3 -Refer to Table 4-3.What will result if the government imposes a $1 price ceiling?

FIGURE 4-2 -Refer to Figure 4-2.Which movement is consistent with an increase in supply?

FIGURE 4-3 -Refer to Figure 4-3.Starting with initial curves D₀ and S₀,which movement is consistent with a strike by the Basque Shepherds Guild?

If both the supply and demand for computer games increase,what will happen to the equilibrium price and quantity of the game?

If both market demand and supply increase simultaneously,what will happen to equilibrium quantity and equilibrium price?

What will the invention of machinery that can double the amount of gold extracted from raw ore likely lead mining companies to do?