Exam 3: Demand and Supply

Demands differ from wants because

-In the above figure, a change in quantity demanded with unchanged demand is represented by a movement from

Because of increasing marginal cost, most supply curves

The Market for Wapanzo Beans Quantity Demanded $\quad$$\quad$$\quad$$\quad$$\quad$ Price $\quad$$\quad$$\quad$ Quantity Supplied (millions of pounds $\quad$$\quad$$\quad$$\quad$$\quad$ (dollars per $\quad$ (millions of pounds peryear) $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ pound) $\quad$$\quad$$\quad$ peryear) Case 1 Case 2 Case 3 Case A Case B Case C 15 10 15 \ 1 1 2 3 12 8 4 \ 2 2 4 6 9 6 3 \ 3 3 6 9 6 3 2 \ 4 4 8 12 3 2 1 \ 5 5 10 15 -Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. If there is a drought in the wapanzo bean growing region then supply will __________and demand will__________ .

-The above figure shows the market for bicycles. When there is a physical fitness craze so that everyone wants to exercise the

A fall in the price of a good causes producers to reduce the quantity of the good they are willing to produce. This fact illustrates

Last year a very severe ice storm hit the north counties of New York state, and the states of Vermont and Maine. Electric poles were down and no one had power for days. It was reported that the price of kerosene heaters skyrocketed and the number purchased increased during this time. Using a supply and demand diagram, show the impact of the ice storm on the market for kerosene heaters.

-The figure above shows the market for airline tickets. In early 2008 the price of jet fuel rose. This change is shown in the figure as a shift from

If macaroni and cheese is an inferior good, then a decrease in income will result in

Soft drinks are a normal good. Draw a graph showing the effect of an increase in income on the demand for soft drinks.

In the market for bicycles, explain what happens to the supply and demand curves when there is an increase in the price of steel used to make bikes.

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium price of beef will

The ʺlaw of demandʺ states that, other thing remaining the same, the higher

A change in which of the following alters buying plans for cars but does NOT shift the demand curve for cars?

If the price of aluminum used to make bicycles increases, the price of a bicycle rises because of a

The quantity demanded of a good or service is the amount that

Computers are a complement to computer software. Suppose the price of a computer falls. Simultaneously, suppose that the number of companies selling computer software decreases. How do these changes affect the price and quantity of computer software?

Price (dollars per pound) Quantity supplied (pounds) Quantity demanded (pounds) 3 1 7 4 2 5 5 4 4 6 5 2 7 6 1 -The above table shows the demand schedule and supply schedule for chocolate chip cookies. If the price is $4.00 per pound, there is a

If the demand curve for bikes shifts leftward and the supply curve for bikes shifts rightward, the equilibrium

When economists speak of preferences as influencing demand, they are referring to