Exam 4: Supply and Demand: an Initial Look

Tampering with the price mechanism

Drawing the supply curve and the demand curve on the same graph helps show how price is determined.

If the price of a good rises, supply will

Rent controls and controls on other prices often aggravate the very problem they are intended to solve.

The position of a demand curve is unaffected by changes in the price of the good.

Governments of market-oriented economies never tamper with the price mechanism.

A decrease in price of a certain good most likely will lead to

When the market price is above equilibrium then ____ and when the market price is below equilibrium, then ____.

An upward-sloping supply curve shows that

Any factor that shifts the demand curve to the left but does not affect the supply curve will lower the equilibrium price and raise the equilibrium quantity.

A shift of the demand curve for a good occurs whenever new technologies make inputs used in producing that good available at lower prices.

At an equilibrium price, quantity demanded

American consumers learn that grape consumption can reduce the incidence of heart disease.Everything else being equal, this will cause the

Figure 4-4 -An increase in demand will have what effect on equilibrium price and quantity?

-In Figure 4-18, there would be a shortage of T-shirts if the price were

Price supports increase the supply of affordable milk for U.S.families.

The interest rate is the price borrowers pay to borrow money.Key interest rates are controlled by the Federal Reserve System.If the Federal Reserve acts to reduce interest rates, economists would expect the quantity of money demanded to

-Which price in Figure 4-21 is equilibrium?

If we observe a market where the quantity supplied exceeds the quantity demanded, but the market price does not fall, then one explanation for this observation is

The unemployment of some groups, such as low-skill workers, may increase as a result of the imposition of a minimum wage.