Exam 4: Demand, Supply, and Market Equilibrium

Recall the Application about the decrease in price of illegal drugs in the United States to answer the following question(s). -Recall the Application. If the decrease in price of illegal drugs is primarily due to a change in demand, the equilibrium quantity of drugs

When demand increases and the demand curve shifts to the right, equilibrium price ________ and equilibrium quantity ________.

A decrease in population would shift the demand curve to the left.

Excess supply in an unregulated market will cause the price of a product to fall.

Describe the changes in the variables that will cause demand for a product to decrease, shifting the demand curve to the left.

Figure 4.6 David's Supply Schedule Celeste's Supply Schedule -Refer to Figure 4.6, which shows David's and Celeste's individual supply curves for flower arrangements per week. Assuming David and Celeste are the only producers in the market, if the market quantity supplied is 50, the price must be

Using a graph, illustrate the effect that an increase in production costs will have on the equilibrium price and quantity of a good.

Recall the Application about the policies used by the European Union to support the agricultural sectors of is member countries to answer the following question(s). -According to this Application, in recent years the European Union has reformed its agriculture policies by reducing or eliminating minimum prices. Ceteris paribus, these policy reforms would ________ excess supply by ________ prices.

If there is an advancement in the technology used to produce a product, what is the likely effect it may have on the supply?

When demand decreases and the demand curve shifts to the left, equilibrium price ________ and equilibrium quantity ________.

The law of supply states that there is a positive relationship between price and quantity supplied, ceteris paribus.

The government sometimes creates an excess demand for a product by setting a maximum price at which the product may be sold to consumers. This is sometimes called a

When supply decreases and the supply curve shifts to the left, equilibrium price ________ and equilibrium quantity ________.

Recall the Application about the decrease in taxes on cigarettes in several Canadian provinces in 1994 to answer the following question(s). -According to this Application, after the government deceased cigarette taxes in several Canadian provinces in 1994, the price of cigarettes in these provinces decreased by roughly ________ percent.

Suppose that a market for a product is in equilibrium at a price of $3 per unit. At any price below $3 per unit

If the equilibrium price of a good decreases and the equilibrium quantity of the good decreases, we can conclude that

-Figure 4.5 illustrates a set of supply and demand curves for hamburgers. A decrease in supply and an increase in demand are represented by a movement from

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. An increase in the demand for tacos is represented by the movement from

Suppose that a new advertising campaign extolling the virtues of apple juice is successful, and a major freeze destroys half of the country's apple crop. What happens to the price and quantity of apple juice?

A change in the price of a product will change the supply of that product.