Exam 4: The Market Forces of Supply and Demand

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for

The supply curve for a good is a line that relates

A decrease in the price of blueberries will decrease both the equilibrium price and quantity in the market for blueberry muffins.

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, the equilibrium price rises, but the effect on the equilibrium quantity is ambiguous.

Scenario 4-1 Suppose the demand schedule in a market can be represented by the equation , where is the quantity demanded and is the price. Also, suppose the supply schedule can be represented by the equation , where is the quantity supplied. -Refer to Scenario 4-1. What is the equilibrium quantity in this market?

When we move along a given demand curve,

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Equilibrium quantity must increase when demand

When the market price is above the equilibrium price, the quantity of the good demanded exceeds the quantity supplied.

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose x = 1. Then the slope of the market demand curve is

Figure 4-6 -Refer to Figure 4-6. Suppose that the federal government is concerned about obesity in the United States. Congress is considering two plans. One would require "junk food" producers to include warning labels on all junk food. The other would impose a tax on all products considered to be junk food. We could illustrate the tax as producing a movement from

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause an)

Surpluses drive price up, while shortages drive price down.

Figure 4-17 -Refer to Figure 4-17. At a price of

A decrease in supply shifts the supply curve to the left.

Assume the market for tennis balls is perfectly competitive. When one tennis ball producer exits the market,

Which of the following events would cause a movement upward and to the right along the supply curve for mangos?

At the equilibrium price, the quantity of the good that buyers are willing and able to buy

A decrease in the price of creamer will increase the equilibrium price and decrease the equilibrium quantity in the market for coffee.