Economics 3

The table above shows the demand schedules for Jill and for all other consumers, as well as the market supply schedule for the same good. The equilibrium price in this market is

$7

In a perfectly competitive market, a change in which of the following could cause a shift in the supply curve?

Technology

If cotton is used to produce towels, and increase in the price of cotton will result in which of the following changes in the towel market?

A decrease in the supply of towels, which leads to a shortage of towels followed by upward pressure on the price of towels

Which of the following explains why a decrease in the price of a normal good will lead to an increase in the quantity demanded of the good?

A lower price will increase consumer' purchasing power.

Which of the following will cause the supply curve for shoes to shift to the right?

An increase in the number of firms producing shoes

13. Which of the following changes in the demand for and the supply of a good would necessarily lead to a decrease in the equilibrium quantity of the good in the market in the short run? Demand Supply

Decrease Decrease

Assume that ice cream is a normal good. If the price of ice cream decreases, the substitution effect and the income effect will lead to which of the following changes in ice cream consumption? Substitution Effect Income Effect

Decrease Increase

If the market depicted in the diagram above is initially in equilibrium, which of the following will result from the government's setting a price ceiling at P3

Market price will be unaffected

Given an increase in the price of material K - which is an input used to produce good X - and an increase in the price of good Y - which is a substitute for good X - which of the following will definitely occur?

The equilibrium price of good X will increase

11. The diagram below depicts demand and supply curves in a city's rental housing market. If a price ceiling of $1,000 is imposed on the market, which of the following will occur?

The quantity of rental housing demanded will increase

An increase in the supply of coffee could be caused by

a decrease in the cost of labor used to produce coffee

The market for goldfish is perfectly competitive. From year 1 to year 2, both the price and quantity of goldfish sold increases. This is most likely caused by

an increase in the demand

Assume that mustard and ketchup are considered substitutes by consumers. If the price of mustard increases, which of the above graphs represents the most likely response in the ketchup market?7. Assume that mustard and ketchup are considered substitutes by consumers. If the price of mustard increases, which of the above graphs represents the most likely response in the ketchup market?

c

If a government eliminated an effective price floor in a market, all of the following would occur EXCEPT

the supply of the good would increase