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Exam 5: Supply,demand,and Price: Applications

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Question 31

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The supply curve for seats in a traditional college classroom is horizontal.

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Question 32

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-Refer to Exhibit 5-5.If the airline charges a price that is between P₁ and P₂ for both aisle seats and middle seats,the result will be

A) a surplus of middle seats and a shortage of aisle seats.
B) a surplus of aisle seats and a shortage of middle seats.
C) a shortage of middle seats and the equilibrium quantity of aisle seats.
D) a shortage of aisle seats and the equilibrium quantity of middle seats.

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Question 33

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Which of the following statements is false?

When the government _____________ mortgage lending standards,the indirect result is likely to be _____________ home prices.

-Refer to Exhibit 5-5.If the airline charges price P₂ for both aisle seats and middle seats,the result will be

If the quantity demanded of medical care is higher at a zero price than at some positive price,then it follows that the demand for those specific items that make up health care will be higher (than it would be if the quantity demanded of health care were lower).

The lower the price of medical care in general,the higher the ____________________________ medical care and the ______________________ specific items that make up medical care (such as x-rays) .

In a given community,if the government builds more freeways,then the supply curve for freeway space shifts rightward and the demand curve for freeway space shifts leftward.

The price of good B has a pattern such that P = $20 on Monday through Thursday of every week,and P = $25 on Fridays.If speculators begin participating in the market for good B,their actions will likely lead to a(n) ______________ in the price of good B on Monday through Thursday and a(n) _______________ in the price of good B on Friday.

-Refer to Exhibit 5-3 which shows the demand and supply of a college athlete.Suppose that NCAA rules limit the amount that the college can pay this athlete,such that their payment can not exceed the cost of attending the college (currently,$8,000) .What is the consumers' surplus for the college (with respect to this one athlete) ?

The supply curve for space on a freeway is perfectly vertical at any given point in time.

If the government enacts legislation which allows lenders to lower lending standards,the government indirectly___________ the demand for which leads to _________ house prices.

-Refer to Exhibit 5-5.If the airline charges a price that is higher than P₂,the result will be a ________________ of middle seats and a ____________ of aisle seats.

At college X and at college Y,students pay $3,000 less than the equilibrium tuition.If the supply of openings is the same at both colleges,it follows that a shortage of openings will be greater at

Suppose that a subsidy is provided for the consumption of good ABC,and the subsidy is different for different units of good ABC (e.g.,$10 subsidy on the first unit of good ABC and $7 on the second unit of good ABC,etc.) .The demand curve with such a subsidy will lie to the ______________ of the demand curve without a subsidy,__________ parallel to the demand curve without any subsidy.

The objective of speculators is to buy at one price and sell at a lower price.

Profit can be earned by buying _____________ and selling ____________________.

People who buy houses in good-weather locations receive this benefit absolutely for free.

As the price of good Z falls,the quantity demanded of good Z rises,but the quantity supplied of good Z does not change.Based upon this information we can conclude that the demand curve for good Z is ________________ and the supply curve for good Z is ________________.

If more people join carpools and travel to work together