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Exam 4: Supply and Demand

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Question 81

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Which of the following would likely result in an increase in the demand for beef?

A) A decrease in the supply of beef
B) An increase in family incomes
C) An increase in the price of feed grains for cattle
D) A decrease in the price of pork

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Question 82

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An increase in demand causes equilibrium price and quantity to rise, other things constant.

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Question 83

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The law of supply states that, other things equal, as the price of a good goes:

Suppose OPEC oil cartel announces that it will increase production of oil. Using supply and demand analysis to predict the effect of increased production on equilibrium price and quantity, the first step is to show the:

Refer to the graphs showing the demand for music downloads. The effect of an increase in the price of music downloads on consumers is best shown by arrow:

The following graph shows the supply of movie downloads. At a price of $4.00, what is the quantity supplied by each of the producers?

Moore's Law states that the processing power of the latest computer chips doubles about every eighteen months. Assuming the graphs demonstrate the market for the latest computer chips, which of the following diagrams describe this situation?

Refer to the graphs shown. If the quantity demanded by consumers is the same for every price, then the demand curve would look like:

Suppose that the table shown shows the demand and supply schedules for pork bellies. There is a shortage of 15,000 pounds at a price of: $\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Price } \\\text { (\$/lb.) }\end{array} & \text { Quantity demanded (lbs.) } & \text { Quantity Supplied (lbs.) } \\\hline \$ 0.10 & 30,000 & 5,000 \\\hline \$ 0.20 & 25,000 & 10,000 \\\hline \$ 0.50 & 20,000 & 20,000 \\\hline \$ 0.75 & 15,000 & 30,000 \\\hline \$ 0.95 & 5,000 & 40,000 \\\hline\end{array}$

Refer to the graphs shown. If consumers began purchasing more of this product due to a decrease in price, this would be shown by arrow:

In Operation Desert Storm, oil facilities in Iraq were attacked amid strong demand for oil. In response, political pressure motivated OPEC to increase the daily quota by 2 million barrels a day. Assuming demand did not change, which of the following series of prices most likely matches how the price of a barrel of oil changed from (1) before the attack, to (2) just after the attack, to (3) after OPEC increased the quota?