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Exam 4: Demand, Supply, and Market Equilibrium

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Question 81

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Suppose that in 2011, 3 million plasma TVs were purchased at $950 each, while in 2012, 4 million plasma TVs were purchased at $800 each. What might have caused this change?

A) The price of LCD TVs (a substitute for plasma TVs) fell.
B) The price of LCD TVs (a substitute for plasma TVs) rose.
C) There was an advance in plasma TV manufacturing technology.
D) There were fewer workers in plasma TV manufacturing.

E) B) and D)
F) B) and C)

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Question 82

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Explain what would happen to the equilibrium price and quantity of iPhones if the supply of iPhones increased while the demand for iPhones also increased.

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Equilibrium quantity would increase.Equi...

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Question 83

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Explain the difference between a change in quantity demanded and a change in demand.

The Law of Supply states that

-Refer to Figure 4.1, which shows Molly's and Ryan's individual demand curves for compact discs per month. Assuming Molly and Ryan are the only consumers in the market, what is the market quantity demanded at a price of $9?

Suppose that a product benefits from a successful advertising campaign. The result is that

Figure 4.6 David's Supply Schedule Celeste's Supply Schedule -Refer to Figure 4.6, which shows David's and Celeste's individual supply curves for flower arrangements per week. Assuming David and Celeste are the only producers in the market, if the market quantity supplied is 350, the price must be

The market demand curve

The market demand curve shows the relationship between the price and the quantity demanded by all consumers, everything else being equal.

Recall the Application about the decline in honeybee colonies and its effect on the price of ice cream to answer the following question(s) . In the last few years thousands of honeybee colonies have vanished, a result of bee colony collapse disorder (CCD) . Roughly one third of the U.S. food supply--including a wide variety of fruits, vegetables, and nuts--depends on pollination from bees. The decline of honeybees threatens $15 billion worth of crops in the United States. -According to this Application, the decline in honeybee colonies has caused ________ of fruits and nuts used in ice cream production.

-Refer to Figure 4.1, which shows Molly's and Ryan's individual demand curves for compact discs per month. Assuming Molly and Ryan are the only consumers in the market, if the market quantity demanded is 15, the price must be

If consumer preference for a product increases, this will cause the equilibrium price of the product to go down, and the equilibrium quantity of the product to go up.

Recall the Application about the decrease in price of illegal drugs in the United States to answer the following question(s) . -Recall the Application. If it is not known whether the decrease in price of illegal drugs is primarily due to a change in supply, a change in demand, or equal changes in both, the equilibrium quantity of drugs

Landon demands more sushi as his income increases. From this we can conclude that, for Landon,

-Figure 4.5 illustrates a set of supply and demand curves for hamburgers. An increase in supply and a decrease in demand are represented by a movement from

If the quantity of a product demanded is greater than the quantity of a product supplied, there is pressure in the market to push the price downward.

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. A successful advertising campaign to sell tacos would bring about a movement from

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. Assume that tacos and burritos are substitutes. A decrease in the price of burritos would bring about a movement from

When demand changes and the demand curve shifts, equilibrium price and equilibrium quantity change in the same direction.

Describe the changes in the variables that will cause supply for a product to increase, shifting the supply curve down and to the right.