Homework 4

The unique point at which the supply and demand curves intersect is called:

Which of the following events must cause equilibrium quantity to fall?

Which of the following events must cause equilibrium price to fall?

When supply and demand both increase, then:

Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Which of the following would cause equilibrium price to decrease?

When the price of a good is higher than the equilibrium price:

New oak tables are normal goods. What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the price of the glue used in the production of the new oak tables increased?

If there is a shortage of farm laborers, we would expect:

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause a(n):

Which of the following events would cause the price of oranges to fall?

An early frost in the vineyards of Napa Valley would cause a(n)

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes Minneapolis, MN in the summer, then the equilibrium price

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

The market for diamond rings is closely linked to the market for high-quality diamonds. If a large quantity of high- quality diamonds enters the market, then the:

Which or the following events would unambiguously cause a decrease in the equilibrium price cotton shirts?

If consumers view cappuccinos and lattes as substitutes, what would happen to the equilibrium price and quantity of lattes if the price of cappuccinos rises?

The current price of blue jeans is $30 per pair, but the equilibrium price of blue jeans is $25 per pair. As a result,

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

New cars are normal goods. What will happen to the equilibrium price of new cars if the price of gasoline rises, the price of steel falls, public transportation becomes cheaper and more comfortable, auto-workers accept lower wages, and automobile insurance becomes more expensive?

Which of the following sets of events must cause an increase in the price of a new house?

Suppose that the market demand equation for gasoline is Qd = 80 - P, and the market supply equation for gasoline is Qs = 20 + 4P. What is the market equilibrium?

We know that the market demand equation for gasoline is Qd = 80 - P, and the market supply equation for gasoline is Qs = 20 + 4P. Suppose that due to natural resource constraints or government regulation, the market supply of gasoline cannot exceed 40. Whats is the new market equilibrium price?

We know that the market demand equation for gasoline is Qd = 80 - P, and the market supply equation for gasoline is Qs = 20 + 4P. Suppose that due to natural resource constraints or government regulation, the market supply of gasoline cannot exceed 80. Whats is the new market equilibrium quantity?