ECON 1 (set 4)
In the market for TVs, the equilibrium price is $500 and the equilibrium quantity is 10,000. What would occur at a price of $600 per TV assuming nothing in the market changes?
A surplus would be created, and quantity supplied would exceed quantity demanded.
When you take out a loan to buy a home, you are on the _____ side in the market for _____.
demand credit
Malik is a local politician running for governor in his state. What role does Malik play in the market for votes?
demander
What are the characteristics of a market economy?
Each individual makes their own production and consumption decisions
A taxi company finds success in its city of operation. Due to this success, a new company comes into town to try and compete with the original company. What has the inclusion of this new company created, and what shift will it cause in the market?
Increased number of sellers; increase in supply
A guitar manufacturer finds a cheaper source for wood in the production of their electric guitars. During this time, a sharp decrease occurs in the popularity of rock music in favor of electronic dance music created using computers. What effect will this have on price and quantity?
Price falls; the change in quantity is unknown
A clothing manufacturer finds a cheaper supplier of wool for their winter coats. During this time, an unexpected cold front moves across the country. What effect will this have on price and quantity?
The effect on price is unknown; quantity rises
All of these are examples of market economies EXCEPT:
a country's prime minister decides that she knows what is best for her country, and dictates all factors of production for her nation
In the example discussing smart parking meters, what symptom of disequilibrium is going to a restaurant with valet parking considered?
bundling
A dust storm destroys the majority of a farmer's peanut crop, causing him to raise the price of his peanut butter. What kind of shift does this create in the market for jelly, a complement to peanut butter?
decrease in demand
Julie's family is preparing for their Fourth of July cookout, so they head to the local grocery store. Among the pandemonium they are able to obtain everything on their shopping list, including hot dogs and hamburgers. In the market for hamburgers, the Fourth of July creates an increase in the _____ for hamburger and a(n) _____ in the equilibrium price and quantity of hamburgers.
demand increase
A wildly popular but aging rock band announces that their upcoming tour will be the last one before they retire. What effect will this likely have in the market for this band's concert tickets?
increase in demand
There is a decrease in demand. This means the new equilibrium price will be _____ and quantity will be _____.
lower lower
Mr. Lu decides that he is going to create his own country. He determines that production matters will be determined by the individuals in the market as far as all production and consumption decisions go. What kind of economy has Mr. Lu effectively created?
market
If prices are free to adjust, then eventually a:
market will be drawn to equilibrium
Mrs. Johnson decides that she is going to create her own country. She determines that she will be in charge of all production matters because she knows how to do things more efficiently than anybody else. What kind of economy has Mrs. Johnson effectively created?
planned
An increase in supply holding demand constant creates a decrease in
equilibrium price
Suppose you are a manager at a local coffee shop. You notice that every day by 8AM you are entirely sold out of bagels, but have at least 20 people ask for bagels later in the day. Which of the following decisions would result in the best outcome for your shop?
raise the price of bagels