Exam 4: Extensions of Demand and Supply Analysis

If both buyers and sellers expect the price of a commodity to fall in the future, it is likely that the market clearing price ________ and the equilibrium quantity ________.

People often complain about price gouging after a disaster such as a hurricane. Suppose the government successfully prevented price increases due to the disaster. We would expect

The price system

-An increase in the minimum wage will tend to cause which of the following to occur?

Which of the following will likely occur when price floors in agriculture are implemented?

We cannot predict the effect on the market clearing price, but know that the equilibrium quantity will decrease when

When a government increases an effective price ceiling for a product

In a price system, changes in prices

Which of the following is an effect of a minimum wage law that establishes a wage floor above the current market clearing wage?

A black market

If both the demand for and the supply of computers are increasing, which of the following statements is TRUE?

-Refer to the above table for smartphones. Suppose there are technological advances in the production of tablets. The new equilibrium price will be

Why does a sports car cost more than a truck?

The textbook suggests that rent controls

Total consumer surplus in a market is measured as the

Price ceilings are designed to

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

-Refer to the above figure. Suppose that the supply curve shifts from SA to SB while the demand curve remains at DA. Which of the following is TRUE?

In a world of scarcity, there has to be some way to ration the available resources. According to economists, the most efficient use of available resources occurs when rationing occurs via

Prices play a role in a market