Exam 4: Supply and Demand: An Initial Look

Each point on the demand curve is

Assume the demand schedule for cookies is downward sloping.If the price of cookies falls from $1.50 to $1.25 per dozen,

Which of the following is the correct way to describe equilibrium in a market?

Are markets always in equilibrium?

In a move to free the economy from unnecessary regulation, Congress decides to remove sugar price supports.What would most likely happen to the number of producers of sugar?

Price floors are typically accompanied by a standard series of symptoms.What are they?

What factors are held constant along a given demand curve for a good?

The U.S.government restricts the production of peanuts by limiting production licenses.By also prohibiting imports, the government maintains prices well above levels peanut farmers would obtain if supply were not restricted.Economists call this type of program a(n)

Demand and quantity demanded are the same thing.

Which of the following would cause a movement up (or leftward) along the demand curve for European autos in the United States?

A common misconception about supply is that

Figure 4-4 -In Figure 4-4, an increase in population will change demand from

Give an example of a price floor.Draw a corresponding diagram and explain why there is a continuing surplus.

Assuming that resources are specialized, the opportunity cost of an item increases as production of it rises.Therefore, we expect that firms will produce more if

A supply schedule can be plotted on a graph to yield a supply curve.

When GM advertises its cars, the company is trying to cause a

Firms often seek to borrow money to expand their capital stock, and the price they pay for the money is the interest rate.What happens to supply of money if the interest rate increases?

Some medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.An economist would expect to find that, after this announcement, the price of Retin-A ____ and the quantity sold ____.

If the price of a good is below the equilibrium price,

Exhibit 4-1 The following are the equations for the supply and demand curves in the market for weezils: Demand: $Q_{d}=20-2 P$ Supply: $Q_{s}=5+3 P$ where $Q_{d}$ is the quantity demanded, Qs is the quantity supplied, and P is the price per weezil in dollars. -Refer to Exhibit 4-1.If the government imposes a price floor of $4 a weezil, how many weezils will be sold?