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Ec 2100-Tansey
Demo for EXAM 1:ANSWERS
July 17, 2016
Figure 1. Shifts of Supply and Demand
(A)
(B)
SUPPLY SHIFTS:
LEFTWARD (up)
(up)
P
Supply
(C)
(D)
RIGHTWARD (down)
DEMAND SHIFTS:
LEFTWARD (down)
RIGHTWARD
P
P
P
Q
Supply
Q
Demand
Q
Demand
Q
Following are several Excerpts from an article entitled “Paper chase’ to Job Chase.” By Kevin
Collison, KC Star Feb 7 2012 p. D1. For each Excerpt answer the questions that follow given the
market for lawyers and the event in bold italic letters: (Different plausible answers are shown in
different colors: on the exam you should always choose just one answer and make it consistent)
EXCERPT 1. More lawyers are striking out on their own or joining small firms, and a new
normal is taking hold as they seek to cut costs to clients. Many are outsourcing more work to
contract employees.
1.Figure 1 (circle one) A
B C
D none of these
2.Determinant that is changing (write only one) : substitutes, buyer expectations, # of buyers
3.
What will occur as a result of this shift alone (circle only one)?
(a) Price and quantity both rise.
(b) Price and quantity both fall.
(c ) Price rises and quantity falls.
(d) Price falls and quantity rises.
(e) None of the above because there is only a movement along the demand curve, not a
shift.
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EXCERPT 2. In its most recent survey, the Missouri Bar reported that the median salary for
lawyers in private practice was 15.2 percent lower in 2010 than in 2008. Salaries for corporate
lawyers dropped 21.1 percent during that period. Salaries for attorneys in non-law fields
declined 7 percent
1. Figure 1 (circle one) A
B C
D none of these
2. Determinant that is changing (write only one) Income, buyer expectation
3. What will occur as a result of this shift alone (circle only one)?
(a) Price and quantity both rise.
(b) Price and quantity both fall.
(c ) Price rises and quantity falls.
(d) Price falls and quantity rises.
(e) None of the above because there is only a movement along the demand curve, not a
shift.
EXCERPT 3. “Even more discouraging, the Washington-based organization reported that only
68.4 percent of 2010 graduates had obtained jobs for which bar passage was required, the lowest
rate that the group ever measured.”
1. Figure 1 (circle one) A
B C
D
2. Determinant that is changing (write only one) # of sellers (supply), seller expectations
(supply), # of buyers (demand), buyer expectations (demand)
3. What will occur as a result of this shift alone (circle only one)?
(a) Price and quantity both rise.
(b) Price and quantity both fall.
(c ) Price rises and quantity falls.
(d) Price falls and quantity rises.
(e) None of the above because there is only a movement along the demand curve, not a
shift.
EXCERPT 4. Dean Larry Dessem said applications to the MU Law School had dropped 13.2
percent from 2007 to last fall, from 980 to 851. Tuition for Missouri residents is now $17784.
1.Figure 1 (circle one) A
B
C
D
(none of these)
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2.Determinant that is changing (write only one) price of the good itself (no shift), # of buyers, buyer
expectations
3.What will occur as a result of this shift alone (circle only one)?
(a) Price and quantity both rise.
(b) Price and quantity both fall.
(c ) Price rises and quantity falls.
(d) Price falls and quantity rises.
(e) None of the above because there is only a movement along the demand curve, not a
shift.
EXCERPT 5. In response to the slowdown in the profession, the school has reduced the size of
its incoming freshman class from 150 to 135 students.
1. Figure 1 (circle one) A
B C
D none of these
2. Determinant that is changing (write only one) # of sellers
3.What will occur as a result of this shift alone (circle only one)?
(a) Price and quantity both rise.
(b) Price and quantity both fall.
(c ) Price rises and quantity falls.
(d) Price falls and quantity rises.
(e) None of the above because there is only a movement along the demand curve, not a
shift.
EXCERPT 6
“Kenner, the president of the Metropolitan bar Association, said there are 9,000 lawyers working
in the Kansas City area, about half of whom are members of her group.
The recession didn’t affect all areas of practice,” Kenner said. “I do plaintiff work, and
the recession didn’t affect us. A lot of us are in that position. People who do bankruptcies have
a lot of work.”
1. Figure 1 (circle one) A
B C
D none of these
2. Determinant that is changing (write only one) income
3.What will occur as a result of this shift alone (circle only one)?
(a) Price and quantity both rise.
(b) Price and quantity both fall.
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(c ) Price rises and quantity falls.
(d) Price falls and quantity rises.
(e) None of the above because there is only a movement along the demand curve, not a
shift.