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Exam 4: The Market Forces of Supply and Demand

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Question 171

Multiple Choice

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

A) surplus of 1 unit.
B) surplus of 3 units.
C) shortage of 1 unit.
D) shortage of 3 units.

E) B) and C)
F) All of the above

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Question 172

Multiple Choice

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Economists normally

A) do not try to explain people's tastes, but they do try to explain what happens when tastes change.
B) believe that they must be able to explain people's tastes in order to explain what happens when tastes change.
C) do not believe that people's tastes determine demand, so they ignore the subject of tastes.
D) incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements.

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

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Question 173

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If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

Table 4-9 -Refer to Table 4-9. Which combination would produce a decrease in equilibrium quantity and an indeterminate change in equilibrium price?

An increase in demand will cause an increase in price, which will cause an increase in quantity supplied.

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?

Figure 4-13 -Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $4 is

In a competitive market, the quantity of a product produced and the price of the product are determined by

The highest form of competition is called

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, sellers expecting the price of turkey to rise in the future would cause a current move from

A leftward shift of a supply curve is called an)

What is the difference between a "change in supply" and a "change in quantity supplied?" Graph your answer. a. For each of the following changes, determine whether there will be a change in quantity supplied or a change in supply. i. a change in input costs ii. a change in producer expectations iii. a change in price iv. a change in technology v. a change in the number of sellers

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 newspaper's classified ads are an example of a market.

An example of a perfectly competitive market would be the market for

The supply curve for a good is a line that relates

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 decrease in quantity supplied

A decrease in income will shift the demand curve for an inferior good to the right.

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?