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Exam 3: Supply and Demand

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Question 1

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Ceteris paribus, which of the following would generally cause an increase in the demand curve for new automobiles?

A) A decrease in the price of new automobiles.
B) An increase in consumers' income.
C) The new models being perceived as ugly compared with old models.
D) Consumer expectations that the price of new automobiles will be lower next year.

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Question 2

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To calculate market demand, we

A) Add the quantities demanded for each individual demand schedule horizontally.
B) Add the quantities demanded for each individual demand schedule vertically.
C) Find the average quantity demanded at each price.
D) Find the difference between the quantity demanded and the quantity supplied at each price.

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Question 3

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"Demand" is a statement of actual purchases.

Complete Table 3.1.Then answer the indicated question. Table 3.1 Individual Demand and Supply Schedules In Table 3.1, if government held the price at $3, Quantity Demanded by $\begin{array}{rccc}\text { Price } & \text { Alejandro } & \text { Ben } & \text { Carl } & \text { Market} \\\hline \$8.00& 8 & 4 & 2 &\_\_\_\\6.00 & 12 & 4 & 4 &\_\_\_\\4.00 & 20 & 4 & 6 &\_\_\_\\2.00 & 22 & 4 & 6&\_\_\_\\\end{array}$ Quantity Supplied by $\begin{array}{lccc}\text { Price } & \text { Avery } & \text { Brandon } & \text { Cassandra } \\\hline \$ 8.00 & 60 & 4 & 6 &\_\_\_\\\$ 6.00 & 42 & 4 & 4&\_\_\_ \\\$ 4.00 & 24 & 4 & 2 &\_\_\_\\\$ 2.00 & 6 & 4 & 0&\_\_\_\\\end{array}$

The market price equals the equilibrium price if quantity demanded equals quantity supplied at the market price.

The basic goals of total utility maximization, total profit maximization, and total welfare maximization explain most market activity.

Ceteris paribus, which of the following is most likely to cause a decrease in the supply of skateboards?

If the market wage for fast-food restaurants is $11 and the government enforces a minimum wage of $7, the unemployment rate will

An increase in the price of one good can cause the demand for another good to increase if the goods are complements.

Suppose there are a series of forest fires that affect the lumber industry while, at the same time, consumers demand more wooden furniture.The wooden furniture market would experience

Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left, ceteris paribus. Figure 3.1 Shifts of Supply and Demand Candy bars: People become more health-conscious and prefer power bars instead of candy bars.

Explain the difference between a "change in quantity supplied" and a "change in supply."

Ceteris paribus, if the opportunity cost of purchasing a good rises, then the maximum price a particular consumer is willing to pay for that good

A ballet performance had many empty seats.This implies that the

The federal government placed an upper limit on human organ prices, which is called a

In the United States, market shortages of human organs are the result of price ceilings.

Land, labor, and capital are bought and sold in the product market.

Which of the following events would cause a rightward shift in the market supply curve for automobiles?

As a result of a shortage,

Market demand is determined by all of the following except