Exam 3: Supply and Demand: Theory

The sum of consumers' surplus and producers' surplus is maximized at equilibrium.

If the demand for a good falls by less than the supply of the good rises,then the good's equilibrium price will __________ and its equilibrium quantity will __________.

When income rises for the buyers of good X,the ____________ curve for good X will shift ________________.

If potential buyers of good X expect the price of good X will soon fall,then the current

Good X is a normal good.If the average income of those who buy good X rises,the _____________ curve for good X will shift ____________ resulting in a(n)_____________ in the equilibrium price of X and a(n)____________ in the equilibrium quantity of X.

When the price of a good is $65,the quantity demanded of a good is 80 units,and the quantity supplied of the good is 40 units.For every $10 increase in the price of this good,quantity demanded falls by 10 units and quantity supplied rises by 10 units.The equilibrium price of this good is ___________and the equilibrium quantity of this good is _________ units.

With respect to the supply and demand for a given product,describe the connection that exists between equilibrium/disequilibrium and predictions.Cite your own unique example in order to help support your answer.

-Refer to Exhibit 3-9.X is produced using input Z.If the price of Z rises,an economist would expect a movement in the market for X from

There is a technological improvement in the production of good X.As a result,the _____________ curve for good X will shift ____________ resulting in a(n)_____________ in the equilibrium price of X and a(n)____________ in the equilibrium quantity of X.

In moving along a demand curve,everything is held constant except buyers' income.

​ ​ -Refer to Exhibit 3-2.Suppose equilibrium is at point B.Something then changes and equilibrium becomes point C.Which of the following is consistent with the change in equilibrium from point B to C (assuming that good X is a normal good)?

-Refer to Exhibit 3-5.In the market shown,if equilibrium was originally at point V and is now at point Z,the new equilibrium price is __________ it was originally and the new equilibrium quantity is ____________ it was originally.

As Jamal's income rises,his demand for pizza does not change.It follows that for Jamal,pizza is a(n)

Suppose the government decides that every family should own its own home.To bring this about,the government decides to subsidize the home-construction industry by giving the home-construction companies $10,000 for every house that they build.As a result of this,

The "voluntary bumping plan" used by airlines to resolve the problem of overbooked flights was developed by economist

​ ​ -Refer to Exhibit 3-2.Suppose equilibrium is at point C.Something then changes and equilibrium becomes point B.Which of the following is consistent with the change in equilibrium from point C to B (assuming that good X is a normal good)?

The law of demand states that ____________and quantity demanded are _____________ related,ceteris paribus.

Assume that Aline,Bentley,Calvin,and Daniel are the only sellers in this market. -Refer to Exhibit 3-12.Fill in blanks (A)and (B)respectively with the market quantity supplied at each given price.

-Refer to Exhibit 3-1.Equilibrium price and quantity are ____________________,respectively.

Suppose that for a given good,demand decreases and supply decreases at the same time.If demand decreases by a greater amount than supply decreases,then equilibrium price __________ and equilibrium quantity __________ for that good.