Exam 4: Extensions of Demand and Supply Analysis

In which of the following situations will both market clearing price and the equilibrium quantity decrease?

Assume that CDs are a normal good and that the price of stereo equipment falls while the labor costs of producing CDs increase. What will happen in the market for CDs?

Specialists who try to lower transaction costs are

An import quota for sugar results in an increase in

As demand for MP3 music downloads increases, other things being equal, we can expect

The rationing function of prices means that

If demand increases while supply decreases, then the equilibrium price

Prices in a market economy perform a rationing function because they reflect

When consumers would have been willing to pay higher prices at various quantities consumed than the market clearing price, the differences are called

The textbook points out that rent controls have

If one day it was discovered that lime juice caused cancer, which of the following would likely result?

The economy is undergoing a recession that has reduced consumers' incomes. In the computer chip market, this will lead to

Which of the following is NOT a device to reduce transaction costs?

The price system features

The difference between the total amount that people would have been willing to pay for the total quantity produced and consumed in a market and what they actually pay at the market clearing price is called

An economic system in which relative prices change to reflect changes in supply and demand for different commodities is known as a

All other factors being constant, a reduction in price tends to cause which of the following?

An import quota is a limit on the

Relative scarcities are indicated by

An increase in the price of labor used to produce good Y will lead to