Exam 4: Using Supply and Demand

The longer the time period considered, the price elasticity of demand tends to:

A jeweler cut prices in his store by 20% and the dollar value of his sales fell by 20%.This is indicative of:

Figure 4-B -Refer to Figure 4-B.The graph portrays the market for gasoline for which a ____ has been imposed, and, as a result, a ____ of gasoline occurs.

A decrease in demand will:

A government mandated price increase for doodads will:

If the government wanted a tax to raise a great deal of revenue but not burden consumers much, it would want to tax an industry with:

If the demand curve is perfectly elastic, then an increase in supply will:

Demand is said to be ____ when the quantity demanded changes the same proportion as the price.

Whenever a price floor is imposed above equilibrium price, it is true that:

If the equilibrium price of widgets is $22, and then a price ceiling of $24 is imposed by the government, as a result,

The imposition of a price ceiling on a market often results in:

Which of the following statements is always true?

Figure 4-E -An increase in the equilibrium price and the equilibrium quantity would be caused by an increase in supply.

Figure 4-E -If the demand for apples increases at the same time the supply of apples falls, the price of apples will tend to fall.

Table 4-B Price per gallon Quantity Demanded Quantity Supplied of (thousands of gallons) gasoline (thousands of gallons) \ 4.50 600 2,000 \ 4.25 700 1,900 \ 4.00 800 1,800 \ 3.75 950 1,700 \ 3.50 1,200 1,600 \ 3.25 1,500 1,500 \ 3.00 1,800 1,400 \ 2.75 2,100 1,300 \ 2.50 2,400 1,200 -Refer to Table 4-C.If the government were to remove a $3.50 price floor in the milk market, the result would be:

Figure 4-E -In the three months before a $1 per pack cigarette tax took effect in Alaska, smokers bought 175 million more cigarettes than during the same period a year earlier.What explains this behavior by consumers?

Figure 4-E -If both buyers and sellers of a good expect its price to fall in the near future, we would expect that to cause the current price and the quantity traded to increase as a result.

If the elasticity of supply of bangles is equal to 1, moving along the supply curve for bangles, an increase in price will:

A steel mill raises the price of steel by 20%, which results in a 7% reduction in the quantity of steel demanded.The demand curve facing this firm is:

The elasticity in the vicinity of five different points along a demand curve varies as follows: Point A B C D E Elasticity 1.25 0.3 1.0 0.2 2.1 At which of these points would a price increase be accompanied by an increase in total revenue?