macreconomics

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve. Change in the price of a related good

Shift in demand curve

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve. Change in consumer expectations

Shift in demand curve

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve. Change in income

Shift in demand curve

a price ceiling will result in a shortage only if the ceiling price is __________ the equilibrium price

less than

What are the determinants of demand

-price of project -income of the consumers -priced of related goods and services -consumer expectations number of buyers in the market

If the demand for steak (a normal good) shifts to the left, the most likely reason is that: A. consumer incomes have fallen. B. cattle production has declined. C. the price of steak has risen. D. the price of cattle feed has gone up.

A

Refer to the above diagram. The equilibrium price and quantity in this market will be: A. $1.00 and 200 B. $1.60 and 130 C. $0.50 and 130 D. $1.60 and 290

A- $1 and 200

Suppose that tacos and pizza are substitutes, and that soda and pizza are complements. We would expect an increase in the price of pizza to: A. Reduce the demand for tacos and increase the demand for sodas B. Reduce the demand for soda and increase the demand for tacos C. Increase the demand for both soda and tacos D. Reduce the demand for both soda and tacos

B

Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5 both are running out of beads to sell (they can't keep up with the quantity demanded at that price), then we would expect both Camille's and Julia's to: A. raise their price and reduce their quantity supplied. B. raise their price and increase their quantity supplied. C. raise their price and reduce their quantity supplied. D. lower their price and increase their quantity supplied.

C

Refer to the above table. Suppose that demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5). If the price were artificially set at $6, a:A. The market would clear B. A surplus of 40 Units would occur C. A shortage of 40 Units would occur D. Demand would change from columns (3) and (2) to columns (3) and (1)

C a shortage of 40 units would occur

Refer to the above diagram. A decrease in demand is depicted by a:A. Move from point x to point y B. Shift from D1 to D2 C. Shift from D2 to D1 D. Move from point y to point x

D

Refer to the above diagram. A shortage of 160 units would be encountered if price was: A. $1.10, that is, $1.60 minus $0.50 B. $1.60 C. $1.00 D. $0.50

D

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve. Change in market price

Movement along demand curve

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve Change in the price of an unrelated good

No change

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve Change in preferences for this good

Shift in demand curve

b) a decline in the number of firms in the tire industry

S decrease

c) an increase in the price of rubber used in the production of tires

S decrease

f) the levying of a per-unit tax on each auto tire sold

S decrease

d) the expectation that the equilibrium price of auto tires will be lower in the future than it is now

S increase

e) a decline in the price of large tires used for semi trucks and earth-hauling rigs ( with no change in the price of auto tires)

S increase

g) the granting of a 50-cent-per-unit subsidy for each auto tire produced

S increase

what effect will each of the following have on the supply of auto tires? a) a technological advance in the methods of producing tires

S increase

In 2001 an outbreak of hoof-and-mouth disease in Europe led to the burning of millions of cattle carcasses. What impact do you think this had on the supply of cattle hides, hide prices, the supply of leather goods, and the price of leather goods?

STUDY Flashcards Learn Write Spell Test PLAY Match Gravity In 2001 an outbreak of hoof-and-mouth disease in Europe led to the burning of millions of cattle carcasses. What impact do you think this had on the supply of cattle hides, hide prices, the supply of leather goods, and the price of leather goods? Burning of millions of cattle carcasses leads to decrease in the supply of cattle hides in the country. Decrease in supply due to change in factors other than price shifts the supply curve leftwards and leads to increase in the price of cattle hides in the Europe.Since, leather goods are made up by using cattle hides so decrease in supply of cattle hides leads to fall in the supply of leather goods in the market. Decrease in supply of leather goods in the market keeping demand constant leads to leftward shift of supply curve and leads to increase in the price of leather goods.

statement consistent with LAW OF DEMAND

a reduction in market price will lead to an increase in quantity demanded

what effect will each of the following have on the demand for small cars such as the mini cooper and fiat 500?a) small cars become more fashionable

a) demand increase

Suppose that the demand and supply schedules for rental apartments in the city of Gotham are as given in the table. a. What is the market equilibrium rental price per month and the market equilibrium number of apartments demanded and supplied? b. If the local government can enforce a rent-control law that sets the maximum monthly rent at $1,500, will there be a surplus or a shortage? c. Suppose that a new government is elected that wants to keep out the poor. It declares that the minimum rent that can be charged is $2,500 per month. If the government Can enforce that price floor, will there be a surplus or a shortage?

a. Market equilibrium rental price is:$2,000 per monthMarket equilibrium quantity is:15,000 apartmentsb. _________ of how many units? Shortage5,000 apartments per monthHow many units will actually be rented each month?12,500 apartmentsc. _______of how many units?Surplus

Suppose there are three buyers of candy in a market: Tex, Dex, and Rex. The market demand and the individual demands of Tex, Dex, and Rex are shown in the table below. a. Fill in the table (gray-shaded cells) for the missing values. b. Which buyer demands the least at a price of $5? The most at a price of $7? c. Which buyer's quantity demanded increases the most when the price is lowered from $7 to $6? d. Which direction would the market demand curve shift if Tex withdrew from the market? What is Dex doubled his purchase at each possible price? e. Suppose that at a price of $6, the total quantity demanded increases from 19 to 29. Is this a "change in the quantity demanded" or a "change in demand"?

a. Row 1:total quantity demanded: 5 Row 2:Rex: 6 invididual Q Dem Row 3:Tex: 6 individual Q Dem Row 4:Dex: 4 individual Q Dem Row 5:total quantity demanded: 33 b. Dex c. Rex d. To the left; to the right e. Change in demand

How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity rise, fall, or remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts?

a. Supply decreases and demand is constant - equilibrium price increases, equilibrium quantity falls. b. Demand decreases and supply is constant - equilibrium price decreases, equilibrium quantity falls. c. Supply increases and demand is constant - equilibrium price decreases, equilibrium quantity increases. d. Demand increases and supply increases - equilibrium price is indeterminate, equilibrium quantity increases. e. Demand increases and supply is constant - equilibrium price increases, equilibrium quantity increases too. f. Supply increases and demand decreases - equilibrium price falls, equilibrium quantity is indeterminate. g. Demand increases and supply decreases - equilibrium price increases, equilibrium quantity is indeterminate. h. Demand decreases and supply decreases - equilibrium price is indeterminate, equilibrium quantity falls.

how is a market DEMAND CURVE derived from individual demand curves?

add up quantities demanded by all individual consumers for each price

characteristics lead to a DOWNWARD SLOPING DEMAND CURVE

an increase in purchasing power as market price decreases; diminishing marginal utility

b) the price of large cars rises (with the price of small cars remaining the same)

b) demand increase

c) income declines and small cars are an inferior good

c) demand increase

d) consumers anticipate that the price of small cars will decrease substantially in the near future

d) demand increase

e) the price of gasoline substantially drops

e) cannot be determined

If products C and D are close substitutes, an increase in the price of C will

tend to cause the price of D to fall