Chapter 4 Apply It

In a perfectly competitive market, all producers sell -- goods or services. Additionally, there are -- buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are price --. True or False: The market for public utilities, such as gas and electricity, does not exhibit the two primary characteristics that define perfectly competitive markets.

Identical Many Takers True

Suppose the market for trucks is unregulated. In other words, the price of trucks can adjust freely based on supply and demand forces. If a shortage exists in the truck market, then the current price must be -- than the equilibrium price. For equilibrium to be reached in the market, you would expect --.

If a shortage exists in the truck market, then the current price must be lower than the equilibrium price. For equilibrium to be reached in the market, you would expect buyers to offer higher prices.

The following graph plots the market for electric guitars in Miami, where there are always over 1,000 music stores. Suppose the municipal government, in an attempt to increase the local tax base, issues $1,000 vouchers to each household that moves to Miami. As a result, many new families move into the city.

Now suppose Congress passes a new tax that decreases the income of Miami residents. If electric guitars are a normal good, this will cause the demand for electric guitars to decrease

Suppose that Clancy and Eileen are the only suppliers of donuts in some hypothetical market. Their weekly supply schedules are given by the following table:

On the following graph, plot Clancy's supply of donuts using the green points (triangle symbol). Next, plot Eileen's supply of donuts using the purple points (diamond symbol). Finally, plot the market supply of donuts using the orange points (square symbol).

At first glance, the market for college textbooks appears to be stacked against students. Professors assign a book with a big price tag, students buy it, and the publisher pockets a tidy profit. End of story, right? Not quite. Historically, students managed to work both sides of the used textbook market in an attempt to lower their textbook tab—hunting for used textbook bargains when classes begin and often reselling them at the end of the term. Price-conscious students understand that they ef

According to the article, why do faculty and students like e-books? E-books cost 25% less than printed books. Students who sign up for a course with an e-book are automatically charged for the book and thus have the required text on the first day of class. E-books provide new ways for students to engage with the text by highlighting, annotating, and searching

Consider the market demand for beer.

Complete the following table by indicating whether an event will cause a movement along the demand curve for beer or a shift of the demand curve for beer, holding all else constant. An increase in the price of beer - Movement along A decrease in the number of consumers - Shift An increase in income of consumers - Shift

Consider the market supply of scones.

Complete the following table by indicating whether an event will cause a movement along the supply curve for beer or a shift of the supply curve for beer, holding everything else constant. An increase in the number of producers - Shift A change in technology that makes it less costly to produce scones - Shift An increase in the price of scones - movement along

Consider the market for pens. Suppose that the number of students who are allergic to the rubber used in pencil erasers increases, leading more students to switch from pencils to pens in school. Further, the price of ink, a major input in the pen production process, has increased sharply.

Price: Increases Decreases Cannot determine Quantity: Decreases Decreases Decreases When both the demand and supply curves shift, the curve that shifts by the smaller magnitude determines the effect on the undetermined equilibrium object.: False

Suppose the market price of calzones in a university town recently increased. Economics students studying at the university are discussing potential causes of the price increase. One group of students theorize that the price increased because several pizza parlors in the area have recently gone out of business. Others claim the increase in the price of calzones is because of a recent increase in the price of chicken wings at local wing joints.

Suppose that both groups of students are on the right track, and each of the events described above are partially responsible for the increase in the price of calzones. Based on your analysis of the explanations offered by the two groups of students, how would you determine which of the possible causes was the dominant cause of the increase in the price of calzones? If the equilibrium quantity of calzones increases, then the demand shift in the market for calzones must have been larger than the supply shift.

Consider the market for new copies of a popular economics textbook. The downward-sloping blue line on the following graph shows the demand curve for new copies of the textbook one year after the release of the latest edition. Assume the textbook is revised on a four-year cycle. Expected resale value represents the amount of money students can expect to get by selling their textbooks in the used market at the end of their course.

Suppose that the publisher of this textbook sets the price of the textbook to $90, and the current resale value is $60. At this price, the quantity of new textbooks demanded is approximately 300,000 per year The publisher holds the price of the textbook constant at $90 over the life of this latest edition. Two years after the release of this edition, the expected resale value of the textbook falls to $50. The quantity of new textbooks demanded is now approximately 267,000 per year.

Complete the following table by selecting the term that matches each definition. Screenshot attached

Your coworker Juanita is really concerned about a project that she has just been assigned. She is in charge of analyzing and determining conditions in the market for televisions from an extensive sales report. If Juanita's boss is interested in a graphical representation of the relationship between the price and quantity of televisions demanded, you would advise your coworker to construct a demand curve using the data provided. However, if Juanita's boss is more interested in the detailed numbers used to construct this visual representation, you would instead advise your coworker that a demand schedule would be more appropriate.

Complete the following table by selecting the term that matches each definition. Screenshot attached

Your professor claims that one of the curves found on the following graph correctly illustrates the supply curve for records: Because you understand the law of supply, you can deduce that the correct graphical representation of the supply for records must be S1. Moreover, you know that at a price of $10 per record, the quantity supplied is five million records.

The following graph presents the market for motorcycles in 2018. Between 2018 and 2019, the equilibrium quantity of motorcycles remained constant, but the equilibrium price of motorcycles increased. Given this information, you can conclude that between 2018 and 2019, the supply of motorcycles -- and the demand for motorcycles --.

decreased, increased