Exam 4: Extensions of Demand and Supply Analysis

Explain how agricultural price supports work and what the effects of the supports are.

Holding demand constant, a reduction in supply leads to

Economists assume that when there is a change in supply and/or demand, the market clearing price returns to the equilibrium

Which of the following must occur as a result of ceilings on apartment rents that are set below market clearing rental rates?

What is the type of companies that provide services by linking individuals to others with similar interests or to companies that sell certain products?

If Johnny is willing to pay up to $3 for an ice-cream cone but she actually pays $1 for it. The consumer surplus of the ice-cream cone for Johnny

Rent controls primarily benefit

-Refer to the above figure. A minimum wage has been set at WM. The amount of unemployment is

A supply restriction that restricts the amount of a good that can be imported is a(n)

Rent controls are an example of a

Another term for intermediaries who specialize in reducing transaction costs is

Which of the following is a main characteristic of exchanges in the market system?

A supply restriction on imported goods, such as the government's restriction of imported oil for many years, is referred to as

The price of a good always changes when

Suppose that the current equilibrium price of gasoline is $3.50 per gallon and that the government passes a law that requires the price to be no more than $3 per gallon. What will be the effects?

-Refer to the above figure. A surplus occurs if the government imposes

Prices in a market economy perform a rationing function because they reflect

If price increases and the quantity purchased increases, we know that

Price floors in agriculture lead to

If both the demand curve and the supply curve shift to the right, we can unambiguously conclude that the