Review Questions

13 . What is the “” commonly called in the ? 14 . Are households demanders or suppliers in the goods ? Are firms demanders or suppliers in the goods ? What about the and the financial ? 15 . Name some factors that can cause a shift in the in labor markets. 16 . Name some factors that can cause a shift in the supply curve in labor markets. 17 . How do economists define in financial markets? 18 . What would be a sign of a in financial markets? 19 . Would help or hinder resolution of a in financial markets? 20 . Whether the product or the labor market, what happens to the equilibrium price and quantity for each of the four possibilities: increase in demand, decrease in demand, increase in supply, and decrease in supply.

Critical Thinking Questions

21 . Other than the for labor, what would be another example of a “derived ?” 22 . Suppose that a 5% increase in the causes a 5% reduction in employment. How would this affect employers and how would it affect workers? In your opinion, would this be a good policy? 23 . Under what circumstances would a be a nonbinding ? Under what circumstances would a be a binding ? 24 . Suppose the U.S. economy began to grow more rapidly than other countries in the world. What would be the likely impact on U.S. financial markets as part of the global economy? 25 . If the government imposed a federal ceiling of 20% on all loans, who would gain and who would lose? 26 . Why are the factors that shift the for a product different from the factors that shift the for labor? Why are the factors that shift the supply of a product different from those that shift the supply of labor? 27 . During a discussion several years ago on building a pipeline to Alaska to carry natural gas, the U.S. Senate passed a bill stipulating that there should be a guaranteed minimum for the natural gas that would flow through the pipeline. The thinking behind the bill was that if private firms had a guaranteed for their natural gas, they would be more willing to drill for gas and to pay to build the pipeline. a. Using the demand and supply framework, predict the effects of this price floor on the price, quantity demanded, and quantity supplied. b. With the enactment of this price floor for natural gas, what are some of the likely unintended consequences in the market? c. Suggest some policies other than the price floor that the government can pursue if it wishes to encourage drilling for natural gas and for a new pipeline in Alaska.

Problems

28 . Identify each of the following as involving either or supply. Draw a and label the flows A through F. (Some choices can be on both sides of the goods .) a. Households in the b. Firms in the goods

Text from Principles of Microeconomics 3e, OpenStax, licensed CC BY-NC-SA 4.0. Access for free at openstax.org.

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