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Exam 4: The Market Forces of Supply and Demand

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Question 71

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The line that relates the price of a good and the quantity supplied of that good is called the supply

A) schedule, and it usually slopes upward.
B) schedule, and it usually slopes downward.
C) curve, and it usually slopes upward.
D) curve, and it usually slopes downward.

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

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Question 72

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A market's equilibrium is the point at which the supply and demand curves intersect.

A) True
B) False

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Question 73

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Individual demand curves are summed vertically to obtain the market demand curve.

Baseballs and baseball bats are substitute goods.

A reduction in an input price will cause a change in quantity supplied but not a change in supply.

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

A demand schedule is a table that shows the relationship between

A decrease in demand will cause a decrease in price, which will cause a decrease in supply.

A competitive market is a market in which

When the price of a good is low, selling the good is profitable, and so the quantity supplied is large.

Fill in the table below, showing whether equilibrium price and equilibrium quantity go up, go down, stay the same, or change ambiguously. $\begin{array} { | l | l | l | l |} \hline & \text { No Change in Supply } & \text { An Increase in Supply } & \text { A Decrease in Supply } \\\hline \begin{array} { l } \text { No Change in } \\\text { Demand }\end{array} & & & \\\hline \text { An Increase in } & & & \\ \text { Demand } & & & \\\hline \text { A Decrease in } & & & \\\text { Demand } & & & \\\hline\end{array}$

A decrease in the price of a good will

Today, producers changed their expectations about the future. This change

Currently you purchase ten frozen pizza per month. You will graduate from college in December, and you will start a new job in January. You have no plans to purchase frozen pizzas in January. For you, frozen pizzas are

Table 4-6 ​ ​ $\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Price } \\\text { (Dollars per unit) }\end{array} & \begin{array} { c } \text { Quantity Demanded } \\\text { (Units) }\end{array} & \begin{array} { c } \text { Quantity Supplied } \\\text { (Units) }\end{array} \\\hline 15 & 10 & 60 \\\hline 12 & 20 & 45 \\\hline 9 & 30 & 30 \\\hline 6 & 40 & 15 \\\hline 3 & 50 & 0 \\\hline\end{array}$ ​ -Refer to Table 4-6. If the price were $12, a

Figure 4-13 ​ -Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Explain the change(s) in the equilibrium price and quantity.

If the supply of a product increases, then we would expect equilibrium price

Figure 4-14 Consider the market for 2-packs of light bulbs below. ​ ​ -Refer to Figure 4-31. Suppose there is an improvement in technology in this market and the price of lamps, a complementary good, increases. What changes do you predict in the equilibrium price and quantity?

In a perfectly competitive market, buyers and sellers are price setters.

Figure 4-6 -Refer to Figure 4-6. The shift from S to S' could be caused by