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Exam 4: The Market Forces of Supply and Demand

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Question 281

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A movement upward and to the right along a supply curve is called an)

A) increase in supply.
B) decrease in supply.
C) decrease in quantity supplied.
D) increase in quantity supplied.

E) All of the above
F) B) and D)

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Question 282

Multiple Choice

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In a market economy, supply and demand are important because they

A) are direct policy tools used by government agencies to regulate the economy.
B) illustrate when an market is in equilibrium, but they are not helpful when a market is out of equilibrium.
C) can be used to predict the impact on the economy of various events and policies.
D) All of the above are correct.

E) A) and D)
F) B) and D)

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Question 283

Multiple Choice

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An example of a perfectly competitive market would be the market for

Table 4-15 The following table shows the number of cases of water each seller is willing to sell at the prices listed. -Refer to Table 4-15. If only Brook Mountain and Cascade Waters operate in this market, what is the market quantity supplied when the price is $3.00 per case?

Good X and good Y are substitutes. If the price of good Y increases, then the

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

Which of the following is an example of a market?

An increase in the price of a good would

Since individual buyers and individual sellers in a competitive market have no influence on the market price, what do we call the buyers and sellers in a competitive market?

Figure 4-30 -Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Which curves) shifts) and in which direction?

In competitive markets, which of the following is not correct?

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.

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, the premature deaths of thousands of turkeys would cause a move from

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. If the warning labels are successful, we could illustrate the plan as producing a movement from

Suppose Spencer and Kate are the only two demanders of lemonade. Each month, Spencer buys six glasses of lemonade when the price is $1.00 per glass, and he buys four glasses when the price is $1.50 per glass. Each month, Kate buys four glasses of lemonade when the price is $1.00 per glass, and she buys two glasses when the price is $1.50 per glass. Which of the following points is on the market demand curve?

Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for Big Box e-readers. Suppose the price of the leading competitor's e­readers, a substitute good, decreases. Which of the following changes would occur?

If a higher price means a greater quantity supplied, then the supply curve slopes upward.

The supply curve for stand up paddle boards

A decrease in the price of a good would

A decrease in the price of baseball bats will decrease the demand for baseballs.