Exam 4: Demand,supply,and Market Equilibrium

Governments occasionally get involved in creating a market equilibrium by setting a maximum price that is less than the equilibrium price,resulting in a permanent excess demand for the products.

At a price of $1,000,Dell Computer Co.is willing to sell 20 laptops and Lenovo is willing to sell 40 laptops.Hewlett Packard will only sell laptops if the price is $1,300 or higher.At $1,000,the market supply for laptops is

Suppose that consumers expect that the price of a product will increase in the future.The result is that

Figure 4.4 -Figure 4.4 illustrates the demand for guitars.If people expect the price of guitars to decrease in the near future,this would most likely bring about a movement from

Suppose that people expect that the price of orange juice will fall next month.We would predict that the equilibrium quantity of orange juice will ________ and the equilibrium price of orange juice will ________ this month.

If incomes decrease and electricity is a normal good,then

Peaches and cream are complements.When the price of peaches falls and the price of raw milk (used to make cream)rises,

Figure 4.3 -Figure 4.3 illustrates the supply and demand for blue jeans.If the actual price of blue jeans is $30,there is

A perfectly competitive market is a market that has

Bananas and apples are substitutes.When the price of bananas rises,the equilibrium quantity of apples will ________ and the equilibrium price of apples will ________.

On the "demand side" of a market,consumers indicate to producers what they are willing to buy,in what quantity,and at what price.

If sellers have an expectation of higher future prices,

If there is an advance in the technology used to produce a product,what is the likely effect it may have on the supply?

Recall the Application about the decrease in the price of wool in the 1990s to answer the following question(s). In the 1990s, the world price of wool decreased by about 30 percent and prices have remained relatively low since then. In 2012, an organization in New Zealand proposed that sheep shearing be added to the Commonwealth Games and the Olympics as a spectator sport in an effort to increase the awareness and the demand for wool. -According to the Application,why might introducing sheep shearing not be an effective policy to raise wool prices?

Excess demand in an unregulated market will cause the price of a product to fall.

If a technological advance makes it possible to produce bananas at a lower cost,

Use the supply and demand model to explain why it is difficult to find an on-campus parking space during peak mid-day times,although it is much easier to find a parking space during less popular evening hours.

The substitution effect of a price change implies that as the price of a good falls,people are likely to buy less of the good whose price has fallen.

Two goods are substitutes if

Recall the Application about the policies used by the European Union to support the agricultural sectors of is member countries to answer the following question(s). -According to the Application,we can infer that if the government stops intervening in the market,then the