Exam 4: Markets in Action

Tammy installed a set of wind chimes in her backyard.She enjoys listening to the musical tones when the breeze hits them.Her neighbor Steven also enjoys the chimes,but her other neighbor Sally hates the constant noise.Tammy's wind chimes:

If the government imposes a price ceiling,then:

How would a decrease in consumer income affect the market for new automobiles?

Exhibit 4-3 Supply and demand curves -In Exhibit 4-3,an increase in demand would cause a movement from which equilibrium point to another,other things being equal?

Discuss the impact of demand and supply changes on market equilibrium price and quantity.Express this graphically.

If a chemical factory causes noxious fumes to be emitted in the neighborhood,a third party would be:

Which of the following is the most likely result of an increase in the minimum wage?

Over a ten year period,the monthly charge for cellular phone service decreased from $120 per month to $30 per month.At the same time,the number of subscribers increased from less than 10 million to more than 75 million.Which of the following provides the best explanation for these changes?

When the government imposes a price ceiling on a good whose price is too high,

Exhibit 4-2 Supply and demand curves -In Exhibit 4-2,which of the following might cause a shift from S₁ to S₂?

Which of the following would be a private cost to a cigarette smoker?

There was an extensive black market (illegal market)for many consumer products in the United States during World War II.A likely explanation of the black market is that:

After a hurricane in Florida knocked out the regional water supply for several days,the demand for bottled water increased sharply.In a market economy,how will this increase in demand affect the equilibrium price and quantity of bottled water?

A price ceiling is set at $10,and the equilibrium market price is $8.Consumers will actually pay $8.

Exhibit 4-3 Supply and demand curves -Initially the market shown in Exhibit 4-3 is in equilibrium at P₃,Q₃ (E₃).Changes in market conditions result in a new equilibrium at P₂,Q₂ (E₂).This change is stated as a(n):

If market supply decreases and,simultaneously,market demand increases,the new equilibrium will show:

A competitive market economy is unlikely to provide an efficient quantity of some public goods because:

Pete throws leftover bread onto his front lawn because he enjoys watching the pigeons feeding.His neighbor John is not happy about the pigeons,since they leave a mess on his property.This is an example of:

If the supply of a good decreased,what would be the effect on the equilibrium price and quantity?

In the case of negative externalities in production,the firm's internal costs: