Exam 4: Bringing Supply and Demand Together

When both the supply and demand curves shift in the same direction,the change in equilibrium quantity will be in the same direction as the shifting curves.

FIGURE 4-2 -Refer to Figure 4-2.Which movement is consistent with a decrease in demand?

TABLE 4-3 -Refer to Table 4-3.The government imposes a $1.20 price ceiling at the same time that there is a substantial decrease in the price of sport utility vehicles.(Assume that sport utility vehicles have very high fuel consumption.)What is the expected result?

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

What occurs whenever a price floor is imposed above equilibrium price?

Suppose Canada steps up efforts to combat drug trafficking and,with the aid of the U.S.border patrol,intercepts a significant percentage of cocaine shipments.What will be the impact of this on the market for cocaine in Montréal?

If the price of ice cream increases substantially (ceteris paribus),what is the equilibrium quantity of hot fudge sauce likely to do?

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

TABLE 4-2 -Refer to Table 4-2.Suppose that D₁ and S₁ are the prevailing demand and supply curves for a product.What happens in the market if the demand schedule changes from D₁ to D₂?

In an effort to reduce the surplus of dairy products,agricultural legislation paid dairy farmers to slaughter their herds and sell them to packinghouses (meat producers)in 1996-1997.How did this influence the market for beef?

FIGURE 4-5 -In an effort to fight inflation of 18 percent per year in Venezuela,President Hugo Chávez has instituted price controls on most basic foodstuffs.Which of the following is the likely outcome of these price controls?

When the demand and supply of grapes both increase at the same time,what will this result in?

In an attempt to reduce poaching of elephant ivory tusks,officials in Kenya burned illegally gathered ivory.Using your understanding of shifts in supply and demand,will this turn out to be a helpful or hurtful move on the Kenyan government's part?

Assume a price floor is imposed at the current equilibrium price in the market for lettuce.If the demand for lettuce then increases,what will result?

What action by the government will always cause a surplus?

Which of the following could be responsible for an increase in the price of wheat?

Which of the following will result at the equilibrium price for gasoline?

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

A report produced by the OECD suggests that global food prices will increase substantially in the next 10 years.Which of the following would likely cause food prices to rise during this period?

Which of the following would most likely increase the price of chicken?