Chapter 4

Refer to Table 5-1. If D2 and S2 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are ____ and ____, respectively.

$10; 12

Refer to Table 5-1. If D1 and S1 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are ____ and ____, respectively.

$6; 13

Refer to Table 5-1. If D2 and S1 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are ____ and ____, respectively.

$8; 15

On April 1, 2009, in the middle of a recession, the government of the province of Ontario, Canada increased the provincial minimum wage from $8.75 to $9.50. What will the likely effect of this policy be?

Both the leftward shift in the labor demand curve and the higher minimum wage will lead to an increase in the unemployment rate.

Improvement in the productivity of labor will tend to:

increase wages

Whenever there is a surplus at a particular price, the quantity sold at the price will equal:

the quantity demanded at that price.

Refer to Figure 4-1. The movement from ____ to ____ is consistent with a successful advertising campaign that claims wool keeps you warm.

Point A; Point F

Refer to Figure 4-1. The movement from ____ to ____ is consistent with a decrease in the price fo a cotton (a substitute).

Point A; Point H

The supply curve of textbooks (which are produced using paper from trees) will shift to the left in response to:

a sharp increase in the demand for and construction of wood-frame homes.

Which of the following results in a rightward shift of the market demand curve for labor?

an increase in demand for the firm's product

The labor ____ curves will shift ____ if there is an increase in productivity or an increase in the demand for the final product.

demand; right

Refer to Table 5-1. Suppose that D1 and S1 are the prevailing demand and supply curves for a product. If the demand schedule changes from D1 to D2, then:

equilibrium price increases from $6 to $8.

Refer to Table 5-1. Suppose that D2 and S1 are the prevailing demand and supply curves for a product. If the demand schedule changes from D2 to D1, then:

equilibrium quantity decreases from 15 to 13.

If the demand for software engineers ____ slower than does supply, then wages of software engineers will ____.

increases; fall

A more efficient means of processing algae to produce an anticancer drug is discovered. As a result, the supply curve for the drug will:

shift to the right, decreasing the price of the drug.

As the ____ complement for high-skill labor becomes cheaper, the demand curve for high-skill labor will shift to the right.

technology

When consumers and businesses have greater confidence that they will be able to repay in the future, ____.

the quantity demanded of financial capital at any given interest rate will shift to the right.

Whenever there is a shortage at a particular price, the quantity sold at that price will equal:

the quantity supplied at that price.

Are markets always in equilibrium?

No, but if there is no outside interference, they tend to move toward equilibrium.

The "law of supply" function in labor markets; that is, a higher ____ for labor leads to a higher quantity of labor supplied.

price