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Exam 4: The Market Forces of Supply and Demand

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Question 71

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Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Regarding Harry and Darby, for whom are sandwiches a normal good?

A) only for Harry
B) only for Darby
C) for both Harry and Darby
D) This cannot be determined from the given information.

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

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Question 72

Multiple Choice

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Consider the market for new DVDs. If DVD players became cheaper, buyers expected DVD prices to fall next year, used DVDs became more expensive, and DVD production technology improved, then the equilibrium price of a new DVD would

A) rise.
B) fall.
C) stay the same.
D) could rise, fall, or remain unchanged.

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

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Question 73

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If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the right.

Table 4-6 -Refer to Table 4-6. Which supply schedules obey the law of supply?

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and when the price falls, the quantity demanded falls.

a. What is the difference between a "change in demand" and a "change in quantity demanded?" Graph your answer. b. For each of the following changes, determine whether there will be a change in quantity demanded or a change in demand.

Figure 4-31 Consider the market for 2-packs of light bulbs below. -Refer to Figure 4-31. At a price of $6, is there a shortage or surplus, and how large is the shortage/surplus?

A market supply curve is determined by

Figure 4-29 -Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

A decrease in the price of pizza will shift the supply curve for pizza to the left.

Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are

Suppose that when the price of a 16 oz. to-go cup of gourmet coffee is $4.25, students purchase 750 cups per day. If the price decreases to $3.75 per cup, which of the following is the most likely outcome?

A movement downward and to the left along a supply curve is called a(n)

New cars are normal goods. What will happen to the equilibrium price of new cars if the price of gasoline rises, the price of steel falls, public transportation becomes cheaper and more comfortable, auto-workers accept lower wages, and automobile insurance becomes more expensive?

Figure 4-2 -Refer to Figure 4-2. Suppose Phil and Miss Kay are the only consumers in the market. If the price is $10, then the market quantity demanded is

A decrease in demand will cause a decrease in price, which will cause a decrease in supply.

The law of demand states that, other things equal, when the price of a good

Figure 4-19 -Refer to Figure 4-19. In this market, equilibrium price and quantity, respectively, are

Price will rise to eliminate a shortage.