Exam 4: The Market Forces of Supply and Demand

Sally tells you that she thinks the price of her favourite stationery will increase in the near future. She will probably respond by:

Fill in the accompanying table, showing whether equilibrium price and equilibrium quantity go up, down or stay the same.

At the equilibrium price, quantity demanded is equal to quantity supplied.

Suppose that the equilibrium price in a market is $100, but the existing market price is $80. What will happen in the market? What if the existing market price is $150?

In a market, to find the total amount supplied at a particular price:

Which one of the following is not a determinant of demand?

Why would Qantas be interested in the cost of fuel?

Suppose that the demand for crocodile leather falls after a decrease in incomes. This would mean that crocodile leather is:

Suppose at the current price of sugar, sugar suppliers have a surplus. This must mean that:

In a free market system, what coordinates the actions of millions of people with their varying abilities and desires?

The intersection of the demand and supply curves is a unique point termed:

If a good is 'normal', then an increase in income will result in:

Table 4-2 -Refer to Table 4-2. In the table shown, suppose the current price was $40. This would mean:

If an event occurred which changed a market equilibrium, how would an economist go about analysing the change in equilibrium?

What does the term 'equilibrium' mean when applied to a market?

There are thousands of wheat farmers who produce and sell wheat, and there are millions of consumers who use wheat and wheat products. The market for wheat would be considered:

A competitive market is a market in which there are enough buyers and sellers that each has a negligible impact on the market price.

Which of the following are the words most commonly used by economists?

The price of any good adjusts until quantity demanded equals quantity supplied.

Supply and demand are the concepts that economists use most often.