Exam 4: Supply and Demand: An Initial Look

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 twenty 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

Sugar price supports ensure an abundance of sugar,and hence reasonable prices for consumers.

If price rises,what happens to quantity supplied for a product?

Figure 4-21 -A shortage will tend to occur at which price in Figure 4-21?

A demand schedule's position is determined partly by the supply of a good.

Distinguish between scarcity and shortage.

A common misperception about consumer demand is that

Figure 4-10 -The rising minimum wage allegedly has reduced the quantity demanded of teenage labor.However,demographics slightly reduced the supply of teenage labor.The U.S.Department of Labor reported that teenage unemployment is an increasing problem.Which graph in Figure 4-10 is consistent with these facts?

Black-market prices are below equilibrium prices because sellers want to sell large quantities.

The laws of supply and demand force prices to an equilibrium.

Demand curves can be affected by the prices of related goods.

Figure 4-14 -Frustrated by the cost and ineffectiveness of the war on drugs,the U.S.government could consider "decriminalization" of the use and sale of cocaine.Critics contend that lower prices will expand drug use and that decriminalization will remove the stigma and danger from arrest associated with drug use,thus further increasing the demand and number of addicts.Which graph in Figure 4-14 best illustrates the critics' case?

A demand curve can be thought of as

The ____ the demand curve for a good,the ____ the change in equilibrium quantity after a shift of the supply curve.

Price ceilings lead to market surpluses.

Suppose demand can be described with the equation Q = 900 − 5P and supply with the equation Q = 100 + 5P.Complete the following table.Determine the equilibrium price and quantity.

Ticket "scalping" is an example of

Price floors are only effective below the market equilibrium.

If the government puts price controls on medical care,this will increase the supply of affordable care in the United States.

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