Exam 4: Extensions of Demand and Supply Analysis

Suppose you observe that the price of a good increases and that the quantity of this good sold also increases. If only the demand curve or the supply curve shifts this suggests that

-Refer to the above figure. If the government imposes a price floor of $60,

If the demand for a product falls and the supply stays the same,

We cannot predict the effect on the market clearing price, but know that the equilibrium quantity will decrease when

A minimum wage is an example of a

Transaction costs are

Suppose that demand for tablets increases, and simultaneously, the supply of tablets increases. Which of the following would you conclude definitely will occur in the market for tablets?

Prices provide the rationing function best when

Goods X and Y are complementary goods. A decrease in price of good X has occurred. In the market for good Y, this will lead to

When a government increases an effective price ceiling for a product

A price ceiling represents

-Refer to the above figure. If a price floor of $5 was set,

Rent control is an example of

The price rationing mechanism of a freely functioning market leads to the most efficient use of resources because

In a market system, how are the price signals established?

A supply restriction that restricts the amount of a good that can be imported is a(n)

A change in an equilibrium price can result from I. A change in demand II) A change in supply

Suppose you observe that the price of movie admissions decline and that the number of people attending movies declines as well. If only the demand curve or the supply curve shifts, this suggests that

In New York City, apartment rent can be adjusted only when a tenant leaves. This leads