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Exam 4: The Market Forces of Supply and Demand

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Question 81

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If the supply of tennis balls, a complement to tennis racquets, decreases, what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

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The equilibrium pric...

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Question 82

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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

A) complementary goods.
B) normal goods.
C) inferior goods.
D) substitute goods.

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

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Question 83

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Pizza is a normal good if the demand

Price cannot fall so low that some sellers choose to supply a quantity of zero.

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.

Figure 4-13 ​ -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 curve(s) shift(s) and in which direction?

The quantity supplied of a good is the amount that

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies, the equilibrium price for movies will increase, but the effect on the equilibrium quantity of movies is ambiguous.

Table 4-5 -Refer to Table 4-5. If the four suppliers listed are the only suppliers in this market and the market quantity demanded is 600 cases when the price is $4.00, which of the following statements is correct?

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

Figure 4-14 Consider the market for 2-packs of light bulbs below. ​ ​ -Refer to Figure 4-31. At a price of $3, is there a shortage or surplus, and how large is the shortage/surplus?

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Figure 4-10 -Refer to Figure 4-10. Which of the following movements would illustrate the effect of an increase in the incomes of parents with school-aged children on the market for Spanish lessons?

The current price of blue jeans is $30 per pair, but the equilibrium price of blue jeans is $25 per pair. As a result, which of the following statements is not true?

Scenario 4-1 Suppose the demand schedule in a market can be represented by the equation Q^D = 500 - 10P, where Q^D is the quantity demanded and P is the price. Also, suppose the supply schedule can be represented by the equation Q^S = 200 + 10P, where Q^S is the quantity supplied. -Refer to Scenario 4-1. Suppose the supply curve shifts to Q^S = 300 + 10P. What is the new equilibrium price and quantity in this market?

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

Figure 4-4 -Refer to Figure 4-4. The movement from point A to point B on the graph is caused by

A group of buyers and sellers of a particular good or service is called a

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