Exam 4: Supply and Demand: An Initial Look

Exhibit 4-1 The following are the equations for the supply and demand curves in the market for weezils: where Qd is the quantity demanded, Qs is the quantity supplied, and P is the price per weezil in dollars. -Refer to Exhibit 4-1.According to the data given,the equilibrium price of a weezil is

During the American Revolution,Washington's army nearly starved to death after price controls were enacted to "help" buy food for the army at affordable prices.The Continental Congress later passed a law which

Enacting a law controlling rents near a major university will increase the affordable housing for college students.

A shift in the demand curve for sailboats resulting from an increase in incomes will lead to

In some markets,demand can be approximated by Q = 50 − 5P + 10Y where Q is quantity,P price per unit,and Y = buyers' income.Supply can be approximated by Q = −5 + 10P. a.If Y = 20, what is equilibrium price and output? b.If Y rises to 25, what is the new equilibrium price and output?

A demand schedule relates prices of a particular good to quantities demanded.

Price ceilings will likely

Figure 4-21 -Which price in Figure 4-21 is equilibrium?

Price floors lead to market surpluses.

The mechanism of supply and demand is

As more firms are attracted to an industry,the supply curve can be expected to shift to the right.

If oranges and grapefruit are close substitutes,an increase in the price of oranges will shift the demand curve of

Equilibrium price and quantity are determined by the intersection of the demand and supply curves.

A shift in the supply curve of bicycles resulting from higher steel prices will lead to

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

From 2007 to 2008,the Federal Reserve System reduced interest rates,the price that borrowers pay.As a result,economists expected that the supply of money would

If supply increases,the equilibrium price will rise and the equilibrium quantity will fall.

An individual's demand schedule

The demand curve for a good connects points describing how much consumers

When price is above the equilibrium level,suppliers offer more than demanders wish to buy.