Exam 4: Bringing Supply and Demand Together

Are markets always in equilibrium?

Assume that coffee and tea are substitutes for each other.If weather conditions cause a substantial portion of the available coffee crop to be destroyed,what will be the result?

If Canadian consumers decided to boycott grapes to protest working conditions of farm workers,everything else being equal,what can we expect?

Ceteris paribus,if the market demand for a product decreases,what will happen to the equilibrium quantity and equilibrium price?

In January,2500 litres of ice cream were sold in Fredericton at $2 per litre.In February,3000 litres were sold at $2.50 a litre.Which of the following is the most likely reason for this change in the price and quantity of ice cream sold?

What does the imposition of a price ceiling on a market often result in?

Suppose there is a reduction in consumer income and an increase 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 of air travel?

TABLE 4-1 -Refer to Table 4-1.What is the equilibrium price?

TABLE 4-2 -Refer to Table 4-2.If D₂ and S₂ represent the demand and supply schedules in a particular market,then what are the equilibrium price and quantity in that market?

As the price of DVD players has fallen over the last two years,more DVD players have been sold by consumer electronics firms.Is this a violation of the law of supply?

Assume a price floor is imposed in the wheat market at the equilibrium price,and that a price ceiling is imposed in the gasoline market at the equilibrium price.What will an increase in supply in both the wheat and gasoline markets create?

Technological progress increases the efficiency of mass producing HDTV-capable television sets.At the same time,more cable and television networks begin broadcasting in HDTV format,increasing the appeal of HDTV-capable television sets.On the basis of this information,what can be said about conditions in the HDTV market?

If the demand for apples increases at the same time the supply of apples falls,the price of apples will tend to fall.

FIGURE 4-5 -Refer to Figure 4-5.What is occurring in the market for gasoline?

If a surplus currently exists in the market for apples,which of the following statements is most accurate?

Many cooks view butter and margarine to be substitutes.If the price of butter rises,how will the market for margarine be affected?

Ceteris paribus,if doctors were to discover that eating spinach reduces a person's cholesterol (a major cause of heart disease); the demand curve for spinach will shift to the right.

Which of the following is NOT a result of rent controls?

If the supply curve for housing has the normal positive slope,what is the likely outcome of rent controls?

Beach resorts raise their prices during the summer months and yet more people book rooms at those times.Is this a violation of the law of demand?