Exam 2: The Basics of Supply and Demand

The demand for packs of Pokemon cards is given by the equation Q_D = 500,000 - 45,000P.At a price of $2.50 per pack,what is the quantity demanded? At $5.00 per pack,what is the price elasticity of demand?

The cross price elasticity between a pair of complementary goods will be

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

Which of the following results from a binding price floor?

If we plot the quantity of aluminum ore mined per year on the horizontal axis and the real annual price of aluminum ore on the vertical axis,we find that the path of price-quantity combinations generally indicates lower real prices and higher quantities over time.Which of the following statements is a plausible explanation for this observed outcome?

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

A simple linear demand function may be stated as Q = a - bP + cI where Q is quantity demanded,P is the product price,and I is consumer income.To compute an appropriate value for b,we can use observed values for Q and P and then set -b(P/Q)equal to the:

Last year,the world demand curve for copper shifted rightward due to continued economic growth in China and other emerging economies.Also,the supply curve for copper shifted leftward due to strikes and other labor disruptions at some of the copper mines.As a result,we observed:

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

Suppose the supply of textbooks is upward sloping and shifts leftward due to higher ink and paper costs.Which of the following events would leave the equilibrium price of textbooks at the same level observed before the supply shift?

A simple linear demand function may be stated as Q = a - bP + cI where Q is quantity demanded,P is the product price,and I is consumer income.To compute an appropriate value for c,we can use observed values for Q and I and then set the estimated income elasticity of demand equal to:

When the government controls the price of a product,causing the market price to be below the free market equilibrium price,

Which of the following will NOT cause a shift in the supply of gasoline?

Suppose the demand for gourmet coffee can be represented by a linear demand curve.At the prevailing market price the income elasticity of demand for gourmet coffee is 2.When income rises the demand curve for gourmet coffee:

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?

Sugar can be refined from sugar beets.When the price of those beets falls,

A vertical demand curve is

Due to capacity constraints,the price elasticity of supply for most products is:

Which of the following would shift the demand curve for new textbooks to the right?

Suppose biochemists discover an enzyme that can double the amount of ethanol that may be derived from a given amount of biomass.Based on this technological development,we expect the: