Exam 4: Extensions of Demand and Supply Analysis

In the market for domestic avocados, what would happen to the market clearing price and the equilibrium quantity if there was a drought in avocado growing areas?

If the government created a surplus of an agricultural product due to price supports, how might they dispose of this surplus?

The price of a good always changes when

If the government should decide to legalize marijuana, all other things remaining the same, we should expect to see

A price ceiling below the market clearing price results in I. excess quantity demand II. excess quantity supplied III. entry of new producers

The signals in markets are determined

Many economists estimate that for every 10% increase in relative minimum wage rates, there is a corresponding decrease in employment of those affected equal to

Of the following groups, which benefits most from a government price support program that establishes a floor price for an agricultural product that is higher than the product's market clearing price?

With respect to the market clearing price and the equilibrium quantity for good X, an increase in the demand for and a decrease in supply of the good definitely will

Which of the following are ways to ration goods and services?

Which one of the following statements is TRUE?

"Scarcity implies that some way of rationing goods must be found." Explain what this statement means. How is this rationing done?

-Refer to the above table. Suppose there are technological advances in the production of smartphones. The new equilibrium price will be

Suppose that the current equilibrium price of gasoline is $3.50 per gallon and that the government passes a law that requires the price to be no more than $3 per gallon. What will be the effects?

When rent controls establish a legal maximum rental rate below the equilibrium rental rate

Garbanzo Beans -Consider the above table. Assuming the government imposes a price floor on garbanzo beans of $8, what would be the likely result?

Another term for intermediaries who specialize in reducing transaction costs is

What would happen in the market for bread if its demand increased but the price was NOT allowed to change?

There has recently been an increase in the price of dairy products used in the production of ice cream. High temperatures have also induced people to consume more ice cream. In the market for ice cream, the effects these changes will have on equilibrium price and quantity are

-Refer to the above figure. A price ceiling has been set at P₁, and a black market has opened. The equilibrium black market quantity will be