Exam 2: The Basics of Supply and Demand

Over the next few years, several newly constructed office blocks will become available at the World Trade Center site. As well, economists expect the New York economy will continue to exhibit modest growth. What is the expected outcome for the office space market in downtown Manhattan?

The income elasticity of demand is the

From 1970 to 2010, the real price of a college education increased, and total enrollment increased. Which of the following could have caused this increase in price and enrollment?

Suppose the quantity of nursing services demanded exceeds the quantity of nursing services supplied. The nursing wage rate will:

For automobile demand in the U.S., the income response tends to be larger in the:

Which of the following events will cause a leftward shift in the supply curve of gasoline?

If the actual price were below the equilibrium price in the market for bread, a:

Which of the following public policies is an example of a price ceiling?

Scenario 2.1: The demand for books is: Q_d = 120 - P The supply of books is: Q_s = 5P -Refer to Scenario 2.1. If P = $25, which of the following is true?

For most consumer goods, the price elasticity of demand is

Suppose that the long-run world demand and supply elasticities of crude oil are -0.906 and 0.515, respectively. The current long-run equilibrium price is $30 per barrel and the equilibrium quantity is 16.88 billion barrels per year. Derive the linear long-run demand and supply equations. Next, suppose the long-run supply curve you derived above consists of competitive supply and OPEC supply. If the long-run competitive supply equation is: S_C = 7.78 + 0.29P, what must be OPEC's level of production in this long-run equilibrium?

In the long run, new firms can enter an industry and so the supply elasticity tends to be

The effect of the September 11 attacks on the World Trade Center on the market for office space in downtown Manhattan was that both the equilibrium price and the equilibrium quantity fell. What is the most likely explanation for this?

Figure 2.1 -Refer to Figure 2.1. At point A, demand is:

The price elasticity of gasoline supply in the U.S. is 0.4. If the price of gasoline rises by 8%, what is the expected change in the quantity of gasoline supplied in the U.S.?

What happens if price falls below the market clearing price?

Suppose that the short-run world demand and supply elasticities for crude oil are -0.076 and 0.088, respectively. The current price per barrel is $30 and the short-run equilibrium quantity is 23.84 billion barrels per year. Derive the linear demand and supply equations.

Assume that steak and potatoes are complements. When the price of steak goes up, the demand curve for potatoes:

From 1970 to 2010, the real price of eggs decreased. Which of the following would cause an unambiguous decrease in the real price of eggs?

Scenario 2.2: In 1992, the Occupational Safety and Health Authority passed the Bloodborne Pathogens Standard (BBP), which regulates dental office procedures. This regulation is designed to minimize the transmission of infectious disease from patient to dental worker. The effect of this regulation was both to increase the cost of providing dental care and to ease the fear of going to the dentist as the risk of contracting an infectious disease. -Refer to Scenario 2.2. What is the effect of the BBP on the equilibrium price of dental care?