Exam 3: Demand, Supply, and Market Equilibrium

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. An increase in the prices of resources used to produce X will

If farmers withhold some of their current corn harvest from the market because they anticipate a higher price of corn in the near future, then this would cause a(n)

Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will

If two goods are substitutes, a decline in the price of one will cause a decrease in the demand for the other.

A television station reports that the price of orange juice has declined but the quantity traded has increased. This situation could be caused by a(n)

Because of unseasonably cold weather, the supply of oranges has substantially decreased. This statement indicates the

The rationing function of prices refers to the fact that government must distribute any surplus goods that may be left in a competitive market.

Answer the question on the basis of the given supply and demand data for wheat. If price was initially $4 and free to fluctuate, we would expect the

An "increase in the quantity supplied" suggests a

Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market specified in the following situation: the market for chicken, when the price of a substitute, such as beef, decreases.

An increase in demand accompanied by an increase in supply will increase the equilibrium quantity, but the effect on equilibrium price will be indeterminate.

The equilibrium price and quantity in a market usually produce allocative efficiency because

In the market for crude oil, if the change in demand due to the falling price of natural gas (a substitute for oil) is greater than the change in supply due to disruptions in oil-well operations in the Middle East, then the equilibrium price of oil will decrease.

"Price" in the statement of the Law of Supply refers to

(Consider This) A primary advantage of Uber to government-regulated taxis is that

When an economist says that the demand for a product has increased, this means that

If there's a huge increase in the number of Americans traveling to Europe (say, for the Olympics), then the effect on the foreign exchange market is that the

The rationing function of prices refers to the

The following data show the supply and demand schedules for a product. The government now introduces a subsidy payment to producers of $30 per unit. Assuming a purely competitive market for the product, the new equilibrium price will be between

When high-school and college graduates apply for jobs in the labor markets,