Exam 4: Supply and Demand: an Initial Look

Black markets can generally be eliminated when price ceilings are enacted.

An increase in price will increase supply.

Economists emphasize the importance of ____ in analyzing demand.

The demand by sterile couples for babies to adopt has grown rapidly, while the supply has dwindled because of improved contraception, liberal abortion laws, and an increase in the probability that unwed mothers will keep their children.It violates the law to sell human beings at any age, but for every 20 legal adoptions, there seemingly is one baby sale at a price up to $50,000.The generic term economists apply to the market produced by this type of shortage is

The supply curve of books (which are produced using paper made from trees) will shift to the right in response to

Which of the following is not a characteristic of a market with a price floor?

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

A government policy that prevents the price of a good or service from falling below a specified level is called a price floor and usually results in

A cold winter will increase the quantity of heating fuel demanded at every price.

The imposition of price ceilings on a market often results in

-Falling oil prices meant that consumers in Libya could afford fewer imported goods.The Libyan government imposed controls to limit imports of cigarettes.At one point, the market price of a carton of cigarettes rose to $70.Which graph in Figure 4-22 best depicts this situation?

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

The quantity of DVD players purchased declined in spite of a decline in price.This implies that the

Which of the following will tend to occur if price floors are imposed on a product?

Why does the quantity demanded decrease when the price of a good increases?

The price of natural gas fell and the quantity sold also fell.Everything else being equal, it is consistent that

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

-Assume that Figure 4-16 shows the supply of soda.An increase in the price of syrup used in the production of soda will shift supply from

Following the devastation of Hurricane Hugo, Charleston, South Carolina was cut off from the outside world and without electricity.Prices for bagged ice rose by 1,000 percent and electric generators by 300 percent and at least one tree removal firm charged $4,000 to cut up a tree.City government responded by passing an emergency law prohibiting price "gouging." This law is an example of

Which of the following events would result in an increase in the demand for natural gas, causing the demand curve to shift outward?