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Exam 4: Supply and Demand: An Initial Look

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Question 81

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Figure 4-16 -Assume that Figure 4-16 shows the supply of orange juice.A decrease in the wage rate paid to workers in the orange juice industry will shift supply from

A) S1 to S₂.
B) S₂ to S1.
C) S₃ to S₂.
D) S₃ to S1.

E) A) and B)
F) A) and C)

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Question 82

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A change in the price of a good has no effect on the supply schedule.

A) True
B) False

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Question 83

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For more than a thousand years, the Catholic Church required its members to abstain from meat on Fridays.Catholics customarily ate fish on Friday.After 1966 abstinence from meat on Fridays was no longer required.Consequently, the

A supply curve can be thought of as

A supply schedule shows

A price above equilibrium always yields a surplus.

Normally, to the extent that a governmental control mechanism succeeds in affecting price, it can be expected to lead to a corresponding

Table 4-1 Use this table for the following questions. $\begin{array}{ccc} & \text { Quantity } & \text { Quantity } \\\underline { \text { Price} } & \underline { \text { Demanded } } & \underline { \text { Supplied} } \\\$ 10 & 1,000 & 5,500 \\9 & 2,000 & 5,000 \\8 & 3,000 & 4,500 \\7 & 4,000 & 4,000 \\6 & 5,000 & 3,500 \\5 & 6,000 & 3,000 \\4 & 7,000 & 2,500 \\3 & 8,000 & 2,000 \\2 & 9,000 & 1,500 \\1 & 10,000 & 1,000\end{array}$ -Refer to Table 4-1.At $4, what is the shortage?

Figure 4-4 -Assume that Figure 4-4 shows demand for MP₃ players.An increase in the price of music downloads changes demand from

To construct a supply curve, an economist needs data on price and quantity.Each point on the supply curve is

An increase in demand will have what effect on equilibrium price and quantity?

Price ceilings will likely

Both demand and supply curves usually have positive slopes.

Table 4-1 Use this table for the following questions. $\begin{array}{ccc} & \text { Quantity } & \text { Quantity } \\\underline { \text { Price} } & \underline { \text { Demanded } } & \underline { \text { Supplied} } \\\$ 10 & 1,000 & 5,500 \\9 & 2,000 & 5,000 \\8 & 3,000 & 4,500 \\7 & 4,000 & 4,000 \\6 & 5,000 & 3,500 \\5 & 6,000 & 3,000 \\4 & 7,000 & 2,500 \\3 & 8,000 & 2,000 \\2 & 9,000 & 1,500 \\1 & 10,000 & 1,000\end{array}$ -Refer to Table 4-1.At $10, what is the surplus?

Figure 4-10 -The rising minimum wage allegedly has reduced the quantity demanded of teenage labor.However, demographics slightly reduced the supply of teenage labor.The U.S.Department of Labor reported that teenage unemployment is an increasing problem.Which graph in Figure 4-10 is consistent with these facts?

A demand schedule's position is determined partly by the supply of a good.

In some markets, demand can be approximated by  Q = 50 - 5P + 10Y where Q is quantity, P price per unit, and Y = buyers' income.Supply can be approximated by  Q =-5 + 10P. a.If Y = 20, what is equilibrium price and output? b.If Y rises to 25, what is the new equilibrium price and output?

The major drawback of a price ceiling is

An important assumption that is made when constructing a demand schedule is that

Price ceilings are designed to protect sellers, while price floors are designed to protect buyers.