Exam 5: Markets in Action

Narrbegin Exhibit 4.5 Supply and demand data for cars $\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Cars demanded } \\\text { per manth }\end{array} & \begin{array} { c } \text { Price per } \\\text { car (\$) }\end{array} & \begin{array} { c } \text { Cars supplied } \\\text { per manth }\end{array} \\\hline 50 & 50 \text { 000 } & \text { 80 } \\\hline 55 & 40 \text { 000 } & 75 \\\hline 60 & 30000 & 70 \\\hline 65 & 20000 & 65 \\\hline 70 & 10000 & 55 \\\hline\end{array}$ Narrend -In Exhibit 4.5, assume that the government sets a price ceiling of $10 000 for cars. What effect will this price change have?

Assuming supply is held constant, an increase in demand for a product will cause a decrease in the market price and the amount bought and sold.

When there is a positive externality associated with the watering of one's lawn, the free market results in:

Market failure means that:

One of the ways to deal with external cost is:

Consider the market for grapes. An increase in the wage paid to grape pickers will cause the:

Demand for a normal good will increase at existing prices if:

Narrbegin Exhibit 4.4 Demand and supply curves -In Exhibit 4.4, a movement from A to B is best described as a/an:

In 2002 a community in the United States passed a beautification ordinance (law) prohibiting the placement of indoor furniture outside of homes (e.g. no couches on the porch). The law represents a conflict between _____ and _____.

Which of the following is not a market failure?

Consider the market for apples. Assuming that apples and oranges are substitutes, an increase in the price of oranges will:

An increase in demand and a decrease in supply cause which of the following?

The government would use production taxes to remedy the problem of substantial:

If the equilibrium price of good X is $15 and a price ceiling is imposed at $14, the result will be:

Price ceilings are imposed if the government:

Price ceiling is:

If the equilibrium price of aspirins is $5.50 for 250 tablets and the government imposes a price ceiling at $5.00 for 250 tablets, the eventual result will be:

Non-smoking sections in restaurants are designed to remove _____ from a market _____.

If the government imposes a price ceiling below the market equilibrium price, then:

Narrbegin Exhibit 4.1 Supply and demand data $\begin{array} { | c | c | c | } \hline \text { Price (\$) } & \begin{array} { c } \text { Quantity } \\\text { demanded }\end{array} & \begin{array} { c } \text { Quantity } \\\text { supplied }\end{array} \\\hline 10 & 500 & 50 \\\hline 15 & 450 & 150 \\\hline 20 & 400 & 250 \\\hline 25 & 300 & 300 \\\hline 30 & 150 & 350 \\\hline\end{array}$ -Exhibit 4.1 shows that at a price of $30: