Exam 4: Supply and Demand: An Initial Look

The position of a demand curve is unaffected by changes in the price of the good.

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

The demand for home computers has increased,yet the price has fallen.Explain this apparent paradox.

Tampering with the price mechanism

In January,2,500 quarts of ice cream are sold in Boston at $2 a quart.In February,3,000 quarts are sold at $2.50 a quart.This change in quantity sold and price may have been caused by

Which of the following is a symptom of a price floor?

Suppose that in a free market 2,000 patients purchase an operation to receive an artificial heart at a price of $500,000 per operation.Without the heart,each patient will die.The government decides this price is too high and imposes a maximum price of $200,000.Everything else equal,

Technological advances that allow a good to be produced at a lower cost will shift the demand curve rightward.

Distinguish the terms price ceiling and price floor.

Regulations are sometimes used to "correct" the failures of a market mechanism.

A shift in the demand curve occurs when

Two studies published in the New England Journal of Medicine link the risk of breast cancer to alcohol consumption.Young women who have nine drinks per week were reportedly 150 percent more likely to develop breast cancer.Considering the market for alcohol,an economist would predict a movement

An increase in supply will have what effect on equilibrium price and quantity?

George Washington's troops at Valley Forge were almost destroyed by price controls.

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

For more than a thousand years,the Catholic Church required its members to abstain from meat on Fridays.Catholics customarily ate fish on Friday.After 1966 abstinence from meat on Fridays was no longer required.Consequently,the

In high schools,all teachers were paid the same based on years of service and regardless of specialization.Beginning in the 1970s,a shortage of science and math teachers developed as private industry paid more for math and science skills than schools could offer.At the same time,a decline in the number of school-age children tended to reduce the demand for all other teachers,which led to a surplus.The economist's solution to this problem would be

Economists emphasize the importance of ____ in analyzing demand.

Why do price ceilings tend to cause persistent imbalances in the market?

American consumers decide to boycott grapes in support of the farm workers' union.Everything else being equal,the