Exam 5: Using Supply and Demand

Refer to the following graph. With a tariff of $10 a blouse on imported silk blouses from China, the revenue the government would collect from the import of silk blouses from China would be:

A decrease in quantity and price is consistent with a:

More and more devices are being introduced in the market that perform tasks similar to that of PCs, such as tablets and smartphones.At the same time, the price of computer chips to make high-end PCs continues to fall.What is the effect of the events on equilibrium price and quantity of high-end PCs?

Refer to the graph shown.If government establishes a minimum wage at $7.25 per hour:

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:

A price floor causes excess demand, resulting in the need to ration by some means other than price.

Consider a market for fish whose market demand and market supply for fish are specified as Qd = 300 - 2.5 P and Qs = - 20 + 1.5 P respectively.The government decides to impose a price ceiling of $50 per ton.What would be the resulting market distortion?

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

Refer to the graph shown that depicts a third-party payer market for prescription drugs.If the co-payment is $2 per pill, what will be the total market expenditures on prescription drugs?

Suppose that initially, the equations for demand and supply are Qd = 48 - 4P and Qs = 4P - 16, respectively.If the quantity supplied decreases by 4 at every price (so that the supply curve shifts to the left), the equilibrium price will change from:

If the government imposes an excise tax on cars equal to $5,000 per automobile, the supply of automobiles will shift to the:

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?

European Union subsidizes its farmers.How do these subsidies make it difficult for farmers in developing economies to compete in the world farm market?

When gasoline prices rose in the early 2000s, the demand for SUVs fell.An economist would predict that SUV prices would decline or at least not rise as quickly.

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 healthcare costs.Other things the same, a higher deductible is expected to:

Quantity restrictions benefit which group the most?

When people heard that there was a shortage of Furby 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:

When a hurricane destroys a significant portion of an apple crop:

Consider a market for fish whose market demand and market supply for fish are specified as Qd = 300 - 2.5 P and Qs = - 20 + 1.5 P respectively.The government decides to impose a price ceiling of $50 per ton.The possible black market price after the ceiling is:

Tariffs can be thought of as indirect: