Exam 4: Supply and Demand: An Initial Look

In high schools,all teachers were paid the same based on years of service and regardless of specialization.Beginning in the 1970s,a shortage of science and math teachers developed as private industry paid more for math and science skills than schools could offer.At the same time,a decline in the number of school-age children tended to reduce the demand for all other teachers,which led to a surplus.The economist's solution to this problem would be

Figure 4-4 -Assume that Figure 4-4 shows demand for soda.A decrease in the price of apple juice will change demand from

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.

Sugarcane can be used for producing both sugar and ethanol.New regulations in certain countries now allow a higher level of ethanol in gasoline.An economist would expect sugarcane prices to ____,and quantity sold to ____.

The price for labor is the wage rate.What happens to the quantity of labor demanded if wages increase?

Which of the following is an example of a price floor?

A demand schedule shows

Consumers expressed outrage at the high price of chainsaws after Hurricane Andrew hit Florida and Louisiana,with newspaper editorials accusing suppliers of unconscionable price gouging.Use a supply and demand graph to assist in explaining the increase in the price of chain saws after Hurricane Andrew.

A supply curve slopes upward because quantity supplied is higher when price is higher.

Figure 4-6 -Grapes can be used for wine or for raisins.Which graph in Figure 4-6 best depicts the effects on the U.S.raisin market of a decrease in purchases of domestic wines?

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

An increase in price will increase supply.

The removal in 1966 of the requirement that Catholics eat fish on Fridays was followed by a 12.5 percent fall in prices of fresh fish.From this it can be deduced that the

Supply can shift due to changes in price.

If new manufacturers enter the computer industry,then,holding all other things constant,

Which of the following is a symptom of a price floor?

Figure 4-23 -In Figure 4-23,which movement will be caused by changes in income?

At equilibrium,quantity demanded equals quantity supplied.

When used in a professional or technical sense,the law of supply and demand refers to

Figure 4-4 -Assume that Figure 4-4 shows demand for orange juice.An increase in the price of soda will change demand from