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Exam 3: Demand, Supply, and Market Equilibrium

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Question 61

Multiple Choice

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Refer to the above graph, which shows the market for bicycles. S₁ and D₁ are the original supply and demand curves. D₂ and D₃ and S₂ and S₃ are possible new demand and supply curves. Starting from the initial equilibrium (point 1) , what point on the graph is most likely to be the new equilibrium after a sharp increase in traffic accidents involving cyclists, and the payment of subsidies to bicycle producers?

A) 3
B) 4
C) 5
D) 6

E) None of the above
F) A) and C)

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Question 62

Multiple Choice

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Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market specified in the following situation: In the market for Florida oranges, when a major frost damages the orange crop in California.

A) Graph A
B) Graph B
C) Graph C
D) Graph D

E) All of the above
F) C) and D)

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Question 63

Multiple Choice

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The horizontal axis of a graph that shows a market demand curve indicates the:

An increase in the quantity of hybrid cars supplied would be caused by which of the following?

Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market specified in the following situation: In the market for chicken, when the price of a substitute, such as beef, decreases.

Refer to the above graph, which shows the market for bicycles. S₁ and D₁ are the original supply and demand curves. D₂ and D₃ and S₂ and S₃ are possible new demand and supply curves. Starting from the initial equilibrium (point 1) , which point on the graph is most likely to be the new equilibrium after the introduction of technological improvements in bicycle production, and successful publicity campaigns by the government on the virtues of bicycling to work?

Use the following graph of the demand for coffee: Refer to the above diagram of three demand curves for coffee. An increase in the price of coffee, other factors constant, would cause a:

In the market for sushi, an increase in supply and a greater decrease in demand will cause both the equilibrium price and quantity to decrease.

Refer to the above diagram of the market for corn. There will be a surplus of 8 thousand bushels at the price of:

Refer to the above table. A technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price. As a result of this technological change, equilibrium output in this market:

A decrease in supply, holding demand constant, will cause:

An increase in consumer incomes will cause a decrease in the demand for an inferior good.

If farmers withhold some of their current corn harvest from the market because they anticipate a higher price of corn in the near future, then this would cause a(n) :

Plastics manufacturers can make either toys or plastic containers. If the prices and profitability of plastic toys increase, then the:

Picture a competitive market with the usual upsloping supply curve and downsloping demand curve. If the current price is creating a shortage, then market forces will cause the price to adjust and:

Two months ago, the Maryville Shirt company sold 2000 shirts at $30 per shirt. Last month the company raised its price to $35 per shirt and sold 3000 shirts. Evidently the company experienced a(n) :

Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market specified in the following situation: In the market for leather coats, when leather coats become more fashionable among young consumers.

In response to the general public's complaints about "price gouging" by sellers, the government could impose a price floor.

A decrease in the price of digital cameras will cause the demand for memory cards to shift to the left.

The graph below shows the market for tickets to a "Final Four" sports event. Assume that there is only one kind of ticket to the event. Refer to the above graph. The supply curve in this event-ticket market is vertical because: