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Exam 4: The Market Forces of Supply and Demand (PART 2)

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Question 31

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Figure 4-10 -Refer to the Figure 4-10.What would cause the movement from point A to point B on the graph?

A) a decrease in the price of the good
B) an increase in the price of the good
C) an increase in technology
D) a decrease in input prices

E) B) and C)
F) None of the above

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Question 32

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A reduction in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

A) True
B) False

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Question 33

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What does the market supply curve show?

Anyone willing to pay the market price for a resource may have it.

The law of demand states that the quantity demanded of a product is positively related to price.

A supply curve slopes upward because,all else equal,a higher price means a greater quantity supplied.

Baseballs and baseball bats are substitute goods.

For teens,what does a 10 percent increase in the price of cigarettes lead to?

Refer to the following: A.What is the difference between a "change in supply" and a "change in quantity supplied"? Graph your answer. B.For each of the following changes,determine whether there will be a change in quantity supplied or a change in supply. a.a change in the resource cost b.a change in producer expectations c.a change in price d.a change in technology e.a change in the number of sellers

When an increase in the price of one good lowers the demand for another good,the two goods are called complements.

What will happen if the price of a good is low?

If the demand for a good falls when income falls,the good is called an inferior good.

A.What is the difference between a "change in demand" and a "change in quantity demanded"? Graph your answer. B.For each of the following changes, determine whether there will be a movement along the demand curve or a shift in the demand curve. a.a change in the price of a related good b.a change in tastes c.a change in the number of buyers d.a change in price e.a change in expectations f.a change in income

Suppose the market for standard one-family houses in a Canadian city is described by the equations Qd=(165+IM)-2.5P,and Qs=-60+10P,where Q represents the number of houses demanded or supplied per year (in 10s),P represents the price in 10 000s,and IM is the number of families immigrating into the city during the year,in 10s. a)What is the equilibrium number of houses and the equilibrium price if there were no immigration (IM=0)? Show this situation in a graph. Now,suppose 350 families have immigrated within the year (IM=35). b)Show this new situation on your graph. c)What are the new equilibrium price and number of houses? d)How many of the "old" families (non-immigrant)have lost their ability to buy a house? e)By how much does the number of houses supplied increase? f)How many of the newcomers buy a house? How could you change the demand equation if you knew that only about 10 percent of the immigrating families buy a house in the year of their arrival?

Figure 4-9 -Refer to the Figure 4-9.Which graph could be used to show the result of 5 percent of the country's smokers deciding to stop smoking?

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

What will a technological advancement do?

If cigarettes and marijuana had been found to be substitutes,what would a tax placed on cigarettes do?

Holding the other determinants of supply constant,what would a change in price do?

The behaviour of buyers and sellers drives markets toward equilibrium.