Exam 5: Using Supply and Demand

The U.S. imposes substantial taxes on cigarettes but not on loose tobacco. When the tax on cigarettes went into effect, the demand for home cigarette rolling machines most likely:

Suppose that the market labor supply and labor demand equations are given by Qs = 5W and Qd = 30 − 5W. The government has passed a law that subsidizes wages by $1 per hour. The equilibrium wage and quantity of labor with the subsidy is:

Suppose that a consumer has a health insurance program with $10 co-payment per doctor visit. If the consumer purchases 6 doctor visits and the bill charged by the doctor for 6 visits is $360, the cost per visit paid by a third party is:

A Wall Street Journal headline reads: "Cigar Shortage Draws New Brands into Market." The shortage resulted from a renewed interest in smoking cigars. What best describes the facts behind the headline?

Refer to the following graph. Demand and supply are initially D and S1, respectively. Which of the following best describes the effect of a $0.50 per pound tariff on Danish hams imported into the United States?

Quantity restrictions become more valuable to those holding the rights to sell the good when:

Refer to the graph shown. If sellers receive a price of $15, quantity supplied will equal:

Demand for single occupancy apartments is Qd = 400,000 - 250P. Supply is given by Qs = 200,000 + 250P. Price of an apartment is measured in hundreds of dollars and quantity is measured in thousands of apartments. What is equilibrium rent and quantity of apartments rented?

Rent control makes apartments:

A company switches from a medical plan that covered all medical costs to a medical plan with a high deductible, making employees responsible for the first $1,500 of health care costs. Other things the same, a higher deductible is expected to:

Suppose a recent and widely circulated medical article reports new benefits of exercise. Simultaneously, the price of the parts needed to make bikes falls. What is the likely effect on the equilibrium price and quantity of exercise bikes sold?

When people heard that there was a shortage of specialty dolls, they wanted even more of them. Because of this effect the pressure on the price of these dolls increased. The price of the dolls remained the same however. Thus, the shortage of these dolls:

Suppose caviar sales soars at the same time price increases. What would lead to both a higher quantity sold and higher price of caviar?

A decrease in quantity and price is consistent with a:

Season tickets to the Miami Heat games are sold out at $30 a game and some people who wanted to get tickets couldn't buy them. As the season progresses, it is clear that the Heat will make it to the playoffs. What is the effect on resale price of tickets to Miami Heat games, assuming resale is legal?

The U.S. Postal Service printed 150,000 sheets of a stamp depicting Bill Pickett, but recalled them when the USPS realized the image on the stamp was Bill's brother, Ben, instead. They were unable to recall 183 sheets that had already been sold. The effect of this recall was to:

The standard supply/demand framework:

Refer to the graph shown. If government establishes a price floor of $7.25 per hour, there will be a:

Refer to the following graphs. Floods in the U.S. Midwest reduce the U.S. corn crop. Which graph depicts the effect of the floods on the U.S. corn market?

When the person who chooses how much to purchase doesn't have to bear the full cost, the quantity demanded tends to be higher.