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Exam 4: The Market Forces of Supply and Demand

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Question 91

Multiple Choice

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Which of the following is an example of a highly organized market?

A) the market for textbooks
B) the market for spa services
C) the market for soybeans
D) the market for ice cream

E) None of the above
F) A) and C)

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Question 92

Multiple Choice

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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 e-readers, a substitute good, decreases. Which of the following changes would occur?

A) a movement along D2 from point A to point B
B) a movement along D2 from point B to point A
C) a shift from D1 to D2
D) a shift from D2 to D1

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

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Question 93

Multiple Choice

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

In a perfectly competitive market, the goods offered for sale are all exactly the same.

Figure 4-22 -Refer to Figure 4-22. At a price of $8, there is a

Table 4-12 A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows: -Refer to Table 4-12. If only members are allowed to purchase tickets to this year's celebrity golf tournament, then what will be the equilibrium price?

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity supplied?

If something happens to alter the quantity supplied at any given price, then we move along the fixed supply curve to a new quantity supplied.

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for bullet-proof vests of an increase in the price of Kevlar?

Kari downloads 7 songs per month when the price is $1.29 per song and 10 songs per month when the price is $0.99 per song. Kari's behavior demonstrates the law of

Price will rise to eliminate a surplus.

Suppose goods A and B are complements. If the price of good A increases, will the demand for good B increase or decrease?

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity demanded?

A movement upward and to the left along a given demand curve is called a decrease in demand.

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Public service announcements, mandatory health warnings on cigarette packages, and the prohibition of cigarette advertising on television are all policies aimed at shifting the demand curve for cigarettes to the right.

The demand curve for a good is a line that relates

In a market economy, prices are the signals that guide the allocation of scarce resources.

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. Explain the change(s) in the equilibrium price and quantity.

Figure 4-22 -Refer to Figure 4-22. What is the equilibrium price in this market?