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Exam 4: The Market Forces of Supply and Demand (PART 1)

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Question 111

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Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also an increase in input prices.What would we expect to occur in this market?

A) The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B) The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
D) Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.

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Question 112

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Which of the following would be most likely to decrease the price of a new house?

A) higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future
B) higher wages for carpenters, lower wood prices, reductions in consumer incomes, lower apartment rents, decreases in population, and expectations of lower house prices in the future
C) lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population, and expectations of higher house prices in the future
D) lower wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population, and expectations of lower house prices in the future

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Question 113

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Which of the following is NOT a characteristic of a perfectly competitive market?

Which of the following would be an example of a monopoly?

What would an early frost in the vineyards of the Okanagan Valley cause?

Table 4-2 $\begin{array} { | l | c | c | } \hline & \text { An Increase in Supply } & \text { A Decrease in Supply } \\\hline \text { An Increase in Demand } & \text { A } & \text { B } \\\hline \text { A Decrease in Demand } & \text { C } & \text { D } \\\hline\end{array}$ -Refer to the Table 4-2.What is the space that would represent an increase in equilibrium price and an indeterminate change in equilibrium quantity?

What will happen to the equilibrium price and quantity of gasoline if more vehicles are used and,at the same time,the extraction of oil becomes more costly?

In what type of market do we refer to buyers and sellers as "price takers"?

Figure 4-4 -Refer to the Figure 4-4.In this market,what would the equilibrium price and quantity be?

There are thousands of wheat farmers who produce and sell wheat and there are millions of consumers who use wheat and wheat products.What would the market for wheat be considered?

Who ultimately determines the demand for a product or service?

Figure 4-6 -Refer to the Figure 4-6.What is the shift from D to D₁ called?

What is an example of substitute goods?

What happens in a competitive market?

If two goods are complements,what happens if there is a decrease in the price of one good?

Market demand is given as Qd = 220 - 4P.Market supply is given as Qs = 2P + 40.What would result if the market price were $10?

Figure 4-5 -Refer to the Figure 4-5.Which of the following is shown in Graph A?

What is the amount of the good buyers are willing and able to purchase?

What can be said about economists in general?

What are the forces that make market economies work?