Exam 4: Bringing Supply and Demand Together

What is occurring in the market when there is an excess quantity supplied of a product at the current price?

Price reductions will usually result whenever the quantity supplied exceeds the quantity demanded at the current market price.

TABLE 4-1 -Refer to Table 4-1.At a price of $10,what is the result in the market?

What will a shift in the supply curve of bicycles resulting from higher steel prices lead to?

Cold weather in the Prairie Provinces increases the popularity of vacations in sunny California.At the same time,the hotel employees' union in California negotiates a significant pay increase for its members.What is the likely impact on the hotel market in California?

Either a price ceiling or a price floor will result in an amount bought and sold that is less than the equilibrium quantity.

Steel mill wage costs increase by 18 percent over a year.What is the likely economic effect on the market for steel?

Coca-Cola bottlers increased their prices as the price of sugar (an important ingredient in producing Coke)rose sharply in the late 1980s.Under these circumstances,what caused the increase in the price of Coke?

FIGURE 4-1 -Refer to Figure 4-1.What is the shortage or surplus that exists at a market price of $4?

What will tend to happen in the market for ballet performances after the lighting and stage technician union wins a 17 percent wage increase for its members?

FIGURE 4-5 -In an effort to fight inflation of 18 percent per year in Venezuela,President Hugo Chávez has instituted price controls on most basic foodstuffs.Which of the following is the likely outcome of these price controls?

TABLE 4-2 -Refer to Table 4-2.Suppose the demand schedule for Good A changes from D₁ to D₂ because the price of a related good,Good B,increases.Based on this,what can we conclude?

What occurs whenever a price ceiling is imposed in a market?

Price ceilings cause surpluses.

Explain how both sales and long lines prior to store openings are characteristic of markets in disequilibrium.

What will occur in the market when there is an excess quantity demanded of a product at the current price?

FIGURE 4-1 -Refer to Figure 4-1.What is the equilibrium price of butter?

TABLE 4-4 -Refer to Table 4-4.If the government were to remove a $1.20 price floor in the milk market,what would be the result?

TABLE 4-2 -Refer to Table 4-2.Suppose the demand schedule for Good A changes from D₁ to D₂ because the price of a related good,Good B,decreases.Based on this,what can we conclude?

FIGURE 4-1 -Refer to Figure 4-1.If a price floor of $4 is imposed,how many units of butter will be sold?