Exam 4: The Market Forces of Supply and Demand

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

A yard sale is an example of a market.

What would happen to the equilibrium price and quantity of lattés if the cost of producing steamed milk, which is used to make lattés, rises?

Equilibrium price must increase when demand

Which of the following events must cause equilibrium quantity to fall?

The market supply curve

Table 4-3 Price Bet's Quantity Denanded Ernie's Quentity Denanded Gruver's Qurntity Denanded Oscar's Quantity Demanded \ 0.00 20 16 4 8 \ 0.50 18 12 6 6 \ 1.00 14 10 2 5 \ 1.50 12 8 0 4 \ 2.00 6 6 0 2 \ 2.50 0 4 0 0 -Refer to Table 4-3. For whom is the good a normal good?

An example of a perfectly competitive market would be the

Which of these statements best represents the law of supply?

Table 4-1 Price Qurantit; Demanded by Michelle Qurintity Demtanded by Laura Quantity Damanded by Hillary \ 5 5 4 11 \ 4 6 6 13 \ 3 7 8 15 \ 2 8 10 17 1 9 12 19 \ 0 10 14 21 -Refer to Table 4-1. If the market consists of Michelle, Laura, and Hillary and the price falls by $1, the quantity demanded in the market increases by

Figure 4-7 -Refer to Figure 4-7. The graphs show the demand for cigarettes. In Panel (b), the arrows are consistent with which of the following events?

Figure 4-21 -Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children?

If a seller in a competitive market chooses to charge more than the going price, then

Figure 4-10 -Refer to Figure 4-10. Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for winter coats?

The unique point at which the supply and demand curves intersect is called

The sum of all the individual demand curves for a product is called

Sellers respond to a shortage by cutting their prices.

If Max experiences a decrease in his income, then we would expect Max's demand for

Nemo rents 5 movies per month when the price is $3.00 per rental and 7 movies per month when the price is $2.50 per rental. Nemo's demand demonstrates the law of

Figure 4-19 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-19. All else equal, a large number of people becoming vegetarians would cause a move from