Exam 4: The Market Forces of Supply and Demand

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. Suppose the price is currently equal to 10 in this market. Is there a shortage or surplus in this market, and how large is the shortage/surplus?

When it comes to people's tastes, economists generally believe that

Table 4-3 -Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $2 is

A university's football stadium is always sold out, and students who wait in line for hours may be turned away. This indicates

A market supply curve is determined by

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Demand refers to the amount buyers wish to buy, whereas the quantity demanded refers to the position of the demand curve.

The law of demand states that, other things equal, an increase in

Table 4-1 -Refer to Table 4-1. If the market consists of Michelle and Laura only and the price falls by $1, the quantity demanded in the market increases by

The sum of all the individual demand curves for a product is called

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

If the demand for a good falls when income falls, then the good is called an inferior good.

Suppose the number of buyers in a market decreases. As a result, would the demand curve in this market shift to the right or to the left?

Which of the following events could cause an increase in the supply of ceiling fans?

Table 4-4 -Refer to Table 4-4. Suppose the market consists of Adam, Barb, and Carl. If the price falls by $2, the quantity demanded in the market increases by

Given the table below, graph the demand and supply curves for flashlights. Make certain to label the equilibrium price and equilibrium quantity. a. What is the equilibrium price and the equilibrium quantity? b. Suppose the price is currently $5. What problem would exist in the market? What would you expect to happen to price? Show this on your graph. c. Suppose the price is currently $2. What problem would exist in the market? What would you expect to happen to price? Show this on your graph.

In a competitive market, each seller has limited control over the price of his product because

When the price of peaches changes, the demand curve for peaches

In a competitive market, the price of a product

If the number of buyers in a market decreases, then