Exam 4: Supply and Demand: An Initial Look

Firms often seek to borrow money to expand their capital stock,and the price they pay for the money is the interest rate.What happens to supply of money if the interest rate increases?

What are the major problems that will tend to arise if there are legal limits on the movement of prices?

A demand schedule relates prices of a particular good to quantities demanded.

Governments of market-oriented economies never tamper with the price mechanism.

Table 4-1 Use this table for the following questions. Quantity Quantity Price Demanded Supplied \ 10 1,000 5,500 9 2,000 5,000 8 3,000 4,500 7 4,000 4,000 6 5,000 3,500 5 6,000 3,000 4 7,000 2,500 3 8,000 2,000 2 9,000 1,500 1 10,000 1,000 -Refer to Table 4-1.At $4,what is the shortage?

Define the following terms and explain their importance to the study of economics. a.demand b.surplus c.equilibrium d.law of supply and demand e.quantity demanded

Figure 4-10 -The rising minimum wage allegedly has reduced the quantity demanded of teenage labor.However,demographics slightly reduced the supply of teenage labor.The U.S.Department of Labor reported that teenage unemployment is an increasing problem.Which graph in Figure 4-10 is consistent with these facts?

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased.As a result,we can expect

Why do airlines tend to lower ticket prices in the winter?

Professional baseball teams in the United States use only wooden bats.If aluminum bats were permitted,the likely result would be a

Which of the following is not a symptom associated with a price floor?

The government of Economica announces that it will purchase its farmers' surplus of milk.From this announcement,you can infer that Economica has a

Figure 4-21 -A shortage will tend to occur at which price in Figure 4-21?

Enacting a law controlling rents near a major university will increase the affordable housing for college students.

Price supports increase the supply of affordable milk for U.S.families.

The price for labor is the wage rate.What happens to the quantity of labor demanded if wages increase?

Figure 4-6 -Grapes can be used for wine or for raisins.Which graph in Figure 4-6 best depicts the effects on the U.S.raisin market of a decrease in purchases of domestic wines?

Ticket "scalping" is an example of

The major drawback of a price ceiling is

Price ceilings lead to market surpluses.