Exam 4: Supply and Demand an Initial Look

Figure 4-18 -In Figure 4-18, there would be a surplus of T-shirts if the price were

"Demand" is a series of quantities demanded, one for each person in the market.

What are the major problems that will tend to arise if there are legal limits on the movement of prices?

If the U.S.government starts to sell off its stockpile of cheese,

The ____ the demand curve for a good, the ____ the change in equilibrium quantity after a shift of the supply curve.

Figure 4-15 -Recycling of newspapers has been undermined by its success.The supply of old papers, gathered diligently by those concerned with the environment, has increased dramatically, as has the number of firms that convert the material into recycled newsprint.The quantity demanded has remained relatively stable despite falling prices because newspapers consider recycled newsprint an inferior substitute for regular newsprint.Consequently, the price of recycled newsprint has fallen below the cost of production; recycling firms are going out of business; mountains of old newspapers are left behind.Which graph in Figure 4-15 best illustrates this situation?

The price for labor is the wage rate.What happens to the supply of labor if wages increase?

When a demand schedule is drawn as a graph,

A decrease in price of a certain good most likely will lead to

A change in the price of hamburgers will change the supply of hot dogs.

From 2007 to 2008, the Federal Reserve System reduced interest rates, the price that borrowers pay.As a result, economists expected that the supply of money would

Throughout history, governments have used price controls to

An increase in the number of nursing homes and community health centers and the expansion of home care has led to an increase in the demand for nurses.At the same time, improving opportunities for women in business have reduced the supply of nurses.Hospitals, the major employers of nurses, have resisted wage increases.The resulting situation could be described as

The major drawback of a price ceiling is

In January, 2,500 quarts of ice cream are sold in Boston at $2 a quart.In February, 3,000 quarts are sold at $2.50 a quart.This change in quantity sold and price may have been caused by

A change in the price of a good has no effect on the supply schedule.

A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.

Figure 4-23 -In Figure 4-23, which movement will be caused by changes in income?

Figure 4-14 -Frustrated by the cost and ineffectiveness of the war on drugs, the U.S.government could consider "decriminalization" of the use and sale of cocaine.Critics contend that lower prices will expand drug use and that decriminalization will remove the stigma and danger from arrest associated with drug use, thus further increasing the demand and number of addicts.Which graph in Figure 4-14 best illustrates the critics' case?

Table 4-1 Use this table for the following questions. -Refer to Table 4-1.What is the equilibrium price in the example above?