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Exam 4: The Market Forces of Supply and Demand

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Question 1

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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?

A) an increase in consumer income
B) a decrease in consumer income
C) greater government restrictions on agricultural chemicals
D) fewer government restrictions on agricultural chemicals

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

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Question 2

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Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless keyboards, a complementary good, increases. 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) A) and D)
F) A) and B)

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Question 3

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When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now.

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?

Table 4-11 -Refer to Table 4-11. The equilibrium price and quantity, respectively, are

Figure 4-3 Consumer 1 Consumer 2 -Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $10 is

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, an increase in the income of buyers who consider turkey to be an inferior good would cause a move from

Figure 4-18 -Refer to Figure 4-18. At the equilibrium price,

Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the

Figure 4-21 -Refer to Figure 4-21. At a price of $4, there is a

There is no shortage of scarce resources in a market economy because

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?

Figure 4-31 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?

Table 4-10 The following table shows the number of cases of water each seller is willing to sell at the prices listed. -Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market quantity demanded is 500 cases when the price is $5.00, which of the following statements is correct?

Which of the following events must cause equilibrium quantity to fall?

Table 4-8 -Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price decreases from $12 to $9, quantity supplied will

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

If suppliers expect the price of their product to fall in the future, then they will

Which of the following events must result in a lower price in the market for Snickers?

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?