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Exam 4: The Market Forces of Supply and Demand

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Question 161

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Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand C in the market for mattresses?

A) a decrease in the price of mattresses
B) a decrease in the price of custom wooden sleigh bed frames
C) a change in consumer tastes away from wooden bedroom furniture
D) a decrease in the number of people in the United States

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

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Question 162

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Table 4-14 The table below shows the quantities demanded of milk per month by four families at various prices. -Refer to Table 4-14. If the four families listed are the only demanders in this market and the price of a gallon of milk increases from $4.00 to $5.00, what is the change in the market quantity demanded?

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decreases ...

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Question 163

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Scenario 4-1 Suppose the demand schedule in a market can be represented by the equation , where is the quantity demanded and is the price. Also, suppose the supply schedule can be represented by the equation , where is the quantity supplied. -Refer to Scenario 4-1. Suppose the supply curve shifts to . What is the new equilibrium price and quantity in this market?

The market supply curve

Supply and demand together determine the price and quantity of a good sold in a market.

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west. Your first step would be to

The law of supply states that, other things equal, when the price of a good falls, the quantity supplied falls as well.

Figure 4-15 -Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for sail boats?

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. Assuming these are the only four suppliers in this market and the function for market demand is QD=1000-100P, where QD is the quantity demanded and P is the price, what is the equilibrium quantity?

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?

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

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

Most studies have found that tobacco and marijuana are complements rather than substitutes.

Figure 4-7 -Refer to Figure 4-7. The movement from Db to Da in the market for potato chips could be caused by an)

When drawing a demand curve,

The following table contains a demand schedule for a good. If the law of demand applies to this good, then Q1 could be

You lose your job and, as a result, you buy more frozen pizzas. For you, frozen pizza are an)

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

A decrease in the price of sugar will shift the supply curve for cookies to the right.

Which of the following events would unambiguously cause an increase in the equilibrium price of cotton shirts?