Exam 4: The Market Forces of Supply and Demand

Workers at a bicycle assembly plant currently make minimum wage. If the provincial government increases the minimum wage by $1.00 an hour, what will likely happen?

Market demand is given as Qd = 120 - P. Market supply is given as Qs = 4P. What would result if the market price were $35?

Market demand is given as Qd = 75 - P. Market supply is given as Qs = 3P + 15. What would result if the market price were $10?

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also an increase in input prices. What would we expect to occur in this market?

Which of the following would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Market demand is given as Qd = 200 - 3P. Market supply is given as Qs = 2P + 100. What would result if the market price were $15?

Pens are normal goods. What will happen to the equilibrium price of pens if the prices of pencils falls, consumers experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to fall in the near future, the population increases, fewer firms manufacture pens, and the wages of pen-makers decrease?

If goods A and B are complements, what will result from an increase in the price of A?

Figure 4-6 -Refer to Figure 4-6. What is the shift from D₁ to D called?

What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls, and more firms decide to manufacture traditional film?

What is the term for buyers and sellers who have no influence on market price?

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

What is step one in the Three-Step program for analyzing changes in equilibrium?

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly (a complementary good) fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was bad for you?

A dress manufacturer is expecting higher prices for dresses in the near future. What would we expect?

Suppose that Carolyn receives a pay increase. What would we expect?

Figure 4-3 -Refer to Figure 4-3. If the price in this market is currently $14, what would happen?

How is a demand curve constructed?

Figure 4-8 -Refer to Figure 4-8. The graph shows the demand for cigarettes. Which most likely happened?

What is the price where quantity supplied equals quantity demanded?