Exam 4: Demand and Supply

-The above figure shows the market for pizza. The market is in equilibrium when some of the pizza firms go out of business. What point represents the most likely new price and quantity?

You are just about to finish college and are about to start a high paying job. Because of this new job, what is the most likely outcome in the market for cars?

A decrease in the price of a complement in production leads to

-The figure above shows the market for iPods. Which of the following creates a movement from point A to point B?

The number of people looking to buy ceiling fan buyers increases, so there is an increase in the

-In the above figure, the movement from point a to point b reflects

What are substitutes in production?

What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?

Soft drinks are a normal good. Draw a graph showing the effect of an increase in income on the demand for soft drinks.

-The figure above shows the market for iPods. Which of the following shifts the demand curve from D₀ to D₁?

Suppose that the number of companies selling computer software decreases. How does this change affect the supply of computer software and the supply curve of computer software?

Which of the following is correct? I. A surplus puts downward pressure on the price of a good. Ii. A shortage puts upward pressure on the price of a good. Iii. There is no surplus or shortage at equilibrium.

Changes in which of the following factors do NOT shift the demand curve?

Suppose that over the next few years the demand for dancing to country and western music decreases. Hence, at country and western dance clubs the equilibrium price of admission ________ and the equilibrium quantity of dancing ________.

Because of the high cost of fuel, railroads such as Union Pacific Corp and CSX Corp have increased the price they charge to haul freight. This change means that the

-The graph illustrates the demand for peanuts. Peanuts are a normal good because the

If the price of carrots is below the equilibrium price, the

Which of the following increases the supply of a good and shifts its supply curve rightward?

Consider the market for bread. If the price of wheat rises, then the

A competitive market is in equilibrium. Then there is a decrease in demand and a decrease in supply. The equilibrium price ________, and the equilibrium quantity ________.