Exam 4: Demand and Supply Applications

If the market price of green tea is $20.00 per pound and the government will not allow green tea growers to charge more than $25.00 per pound of green tea, which of the following will happen?

Refer to the information provided in Figure 4.5 below to answer the question(s) that follow. Figure 4.5 -Refer to Figure 4.5. Assume that initially there is free trade. The quantity demanded of CD-Rom drives will be reduced by 3 million CD-Rom drives if the United States imposes ________ tax per CD-Rom drive on imported CD-Rom drives.

Favored customers receive special treatment from dealers during periods of excess demand.

Refer to the information provided in Figure 4.4 below to answer the question(s) that follow. Figure 4.4 -Refer to Figure 4.4. At the world price of ________ per barrel of oil, the United States imports 6 million barrels of oil per day.

The rationing mechanism in market economies is the adjustment of

Refer to the information provided in Figure 4.5 below to answer the question(s) that follow. Figure 4.5 -Refer to Figure 4.5. The United States imports 9 million CD-Rom drives at a world price of ________ per CD-Rom drive.

If the equilibrium price of gasoline is $4.00 per gallon and the government will not allow oil companies to charge more than $3.00 per gallon of gasoline, which of the following will happen?

Refer to the information provided in Figure 4.3 below to answer the question(s) that follow. Figure 4.3 -Refer to Figure 4.3. In the market for pencils, the quantity demanded will be greater than the quantity supplied if the government imposes an effective

Establishing a list of favored customers is an alternative rationing mechanism to price rationing.

Refer to the information provided in Figure 4.6 below to answer the question(s) that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. The area of [E + F + G] represents

Refer to the information provided in Figure 4.6 below to answer the question(s) that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. The deadweight loss due to underproduction is area [C + F] if price is

Refer to the information provided in Figure 4.4 below to answer the question(s) that follow. Figure 4.4 -Refer to Figure 4.4. Assume that initially there is free trade. The price of oil in the United States will increase to $150 per barrel if the United States then imposes ________ tax per barrel of imported oil.

A maximum price, set by the government, that sellers may charge for a good is known as

The total of consumer plus producer surplus is largest at the market equilibrium.

At equilibrium, deadweight loss is zero.

Refer to the information provided in Figure 4.5 below to answer the question(s) that follow. Figure 4.5 -Refer to Figure 4.5. The United States will import 3 million CD-Rom drives if ________ tax per CD-Rom drive is levied on imported CD-Rom drives.

Refer to the information provided in Figure 4.6 below to answer the question(s) that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. Producer surplus is area G if price is

Refer to the information provided in Figure 4.4 below to answer the question(s) that follow. Figure 4.4 -Refer to Figure 4.4. Assume that initially there is free trade. If the United States allowed drilling for more oil in the Gulf of Mexico, it could

An example of a ________ would be the government setting the price of coffee below the equilibrium price.

A surplus exists when there is excess demand in a market.