Exam 5: Supply,demand,and Price: Applications

-Refer to Exhibit 5-6.Under law 1 a renter has 30 days to vacate an apartment after being served with an eviction notice.Under law 2,the renter has 90 days to vacate after being served with an eviction notice.This graph shows that the supply of apartments is____________ under law 1 than under law 2,and thus apartment rent is _______________ under law 1 than under law 2.

-Refer to Exhibit 5-5.Based upon the information provided in this graph,the supply of aisle seats is __________ the supply of middle seats,and the demand for aisle seats is _______________ the demand for middle seats.

Suppose that a toll of $15 is charged to drive on a road,regardless of the time of day.If this toll brings about equilibrium travel flows at the busiest time of day,it will create __________ at all other times of day.

High demand for a product does not necessarily mean a high quantity demanded for that product if the price is high enough.

The NCAA rule governing the limits on the amount of a scholarship a college can offer an athlete is an effective price floor.

When congestion occurs on the freeway (because of a shortage of freeway space),an economist would most likely explain this by saying that it is because

A subsidy placed on the consumption of good A will likely raise the demand for good A by the amount of the subsidy.

-Refer to Exhibit 5-3 which shows the demand and supply of a college athlete.Suppose that NCAA rules limit the amount that the college can pay this athlete,such that their payment can not exceed the cost of attending the college (currently $8,000).The impact of this ruling would be a loss of income to the athlete of __________ and an equal gain in consumers' surplus to the college represented by ________________.

If the government sets out to make home buying easier for more people by forcing lenders to accept ____________ down payments and ______________ interest rates,the result will likely be a(n)_______________ in housing prices.

Since most colleges and universities do not charge students different tuition based on the time or day a student takes classes,there will likely be a shortage of seats in some classes and a surplus of seats in other classes.

To an economist,freeway congestion is a sign that the price to drive on the freeway is

Discuss three possible solutions for reducing traffic congestion on freeways.Be sure to explain what effect each would have on the supply and/or demand for freeway space.

The actions of speculators make the speculators better off,but they necessarily make the rest of society worse off.

The price of good X has a pattern such that P = $3 on Monday through Thursday of every week,and P = $2 on Fridays.If speculators begin participating in the market for good X,their actions will likely lead to a(n)______________ in the price of good X on Monday through Thursday and a(n)_______________ in the price of good X on Friday.

The existence of a third party in the medical care market separates the buying of medical care from the paying for medical care.

Colleges and universities use such things as grade point averages and standardized test scores as

Suppose that there are two laws proposed for eviction notices.Plan A requires landlords to give a renter 30 days to vacate an apartment once he has been served an eviction notice.Under Plan B,he has 60 days to vacate an apartment once he has been served an eviction notice.It follows that landlords will find

-Refer to Exhibit 5-5.If the airline charges price P₁ for both aisle seats and middle seats,the result will be

The lower the price of medical care in general,the higher the _________________ medical care and the _______________ specific items that make up medical care (such as x-rays).The result will be a _______________ price for the specific items that make up medical care.

At college ABC and at college XYZ,students pay $15,000 less than the equilibrium tuition.If the supply of openings is the same at both colleges,it follows that a shortage of openings will be greater at