Exam 3: Business Fluctuations: Aggregate Demand and Supply

A market has a demand equation as follows: Qd = 60 - 4P. The market price of the product is $5. Calculate the dollar amount of consumer surplus in this market, and illustrate your answer graphically.

Advances in technology such as personal computers and cellular telecommunications are indicated in the supply graph by a movement along the supply curve.

(Figure: Demand Curve) Refer to the figure. What is the maximum price per book that buyers are willing to pay for 2,500 books? Figure: Demand Curve

A market has a supply equation as follows: Qs = -20 + 2P. The market price for the product is $20. Calculate the dollar amount of producer surplus in this market and illustrate your answer graphically.

What does the law of supply state?

(Figure: Consumer Surplus) Refer to the figure. Calculate the dollar amount of consumer surplus being earned in this market.

(Figure: Demand Shift) Which of the following could explain the figure?

If the university president valued a parking space close to the administration building at $500 and paid $30 for a parking permit, he would receive consumer surplus equal to:

(Figure: Demand Curve) Which of the following statements is TRUE regarding the figure? I. At a price of $6 per unit, consumers are willing and able to buy 10 units. II. The maximum price demanders are willing to pay for 15 units is $3.75 per unit. III. The higher the price, the greater the quantity demanded. IV. At a price of $3.75 per unit, consumers are indifferent between buying 10 and 15 units.

(Table: Excel Company) The table shows the results of Excel Company's market survey. If the market price of Excel computers is $1,200 each, how much total consumer surplus (in $) are the four consumers earning?

Reference: Ref 3-4 (Figure: Supply Shifts) In the figure, the initial supply curve is S1. If producers form expectations that the price will be lower in the near future, S1 will:

An increase in the population will lead to an increase in demand. Give three other examples that lead to an increase in demand.

One result of the North American Free Trade Agreement was a:

An increase in the use of labor-saving technologies will shift the supply curve to the right.