Exam 4: Equilibrium- How Supply and Demand

Use the following to answer questions Figure: Price and Quantity 1 -(Figure: Price and Quantity 1)In the diagram,at a price of $40,the quantity demanded is ______,the quantity supplied is ______,and there is a ______.

In a free market,the market moves to an equilibrium because buyers compete against sellers to get the lowest possible prices.

Consumers who traded in a used car for a new vehicle under the Cash-for-Clunkers program received a voucher worth up to $4,500 to offset the price of the consumer's new vehicle.What effect did that program's requirement to destroy all trade-in cars have on the market for used cars?

Why is the world unlikely to ever literally run out of oil?

War in the Middle East tends to cause a decrease in the world supply of oil.

Imagine a free market in equilibrium.After a sudden decrease in demand (but before the price can adjust),the market experiences a:

Which choice explains how the OPEC crisis of 1973 affected oil prices?

Imagine a free market in which at a price of $10,quantity supplied is 40 units and quantity demanded is 50 units.Equilibrium price in this market:

Use the following to answer questions Figure: Price and Quantity 2 -(Figure: Price and Quantity 2)At a cost of $20 per unit in the diagram,the value of the unexploited gains from trade is represented by areas:

The formation of the Organization of the Petroleum Exporting Countries (OPEC)made it easier for these oil-producing countries to act together and successfully limit the supply of oil,thus raising prices.

The free market maximizes the gains from trade,producing the level of output that maximizes consumer surplus plus producer surplus.

Figure: Four Panel 2 Which of the four panels shows an increase in income on an inferior good?

Tim values treats for his dog at $10 per box,and John values them at $6 per box.If the price of dog treats is $3 per box but only one box is available between these two buyers,then gains from trade will be maximized when:

Figure: Supply and Demand 2 What happens as a result of the change in demand in the diagram?

If the government institutes a tax on suppliers of Cheesy-Poofs,the market for Cheesy-Poofs will see:

In markets for manufactured goods,a new form of 3-D printing that lowers production costs will lead to:

Surpluses drive price up while shortages drive price down.

A surplus occurs when:

A decrease in the supply of milk will lead to a decrease in the QUANTITY DEMANDED of milk.

Use the following to answer questions Figure: Chocolate -(Figure: Chocolate)If the price in the diagram is $5,what will happen?