Exam 3: Where Prices Come From: the Interaction of Demand and Supply

Suppose that when the price of raspberries increases, Lonnie increases his purchases of papayas. To Lonnie

A decrease in the demand for eggs due to changes in consumer tastes, accompanied by a decrease in the supply of eggs as a result of an outbreak of Avian flu, will result in

If the price of gasoline increases, what will be the impact in the market for public transportation?

In much of Europe, the legal age to obtain a driver's license is 18. If the legal driving age in the United States was changed to 18, how would this affect the market for new automobiles? The market for automobile insurance?

In April, market analysts predict that the price of titanium will fall in May. What happens in the titanium market in April, holding everything else constant?

Figure 3-3 -Refer to Figure 3-3. The figure above shows the supply and demand curves for two markets: the market for original Michelangelo sculptures and the market for Ray Ban sunglasses. Which graph most likely represents which market?

What are the five variables that will shift the demand curve?

If the number of firms producing electric cars increases and consumer preference for electric cars increases, the equilibrium quantity of electric cars will definitely increase.

If an increase in income leads to a decrease in the demand for popcorn, then popcorn is

A decrease in input costs in the production of LCD televisions caused the price of LCD televisions to decrease. Holding everything else constant, how would this affect the market for video game consoles (a complement to LCD televisions)?

When the price of a good rises, consumers buy a smaller quantity because of the ________ effect and the ________ effect.

If a decrease in income leads to an increase in the demand for sardines, then sardines are

Assume that cotton is a normal good. Which of the following would cause both the equilibrium price and equilibrium quantity of cotton to increase?

Figure 3-2 -Refer to Figure 3-2. An increase in price of inputs would be represented by a movement from

Figure 3-2 -Refer to Figure 3-2. An increase in the number of firms in the market would be represented by a movement from

Electric car manufacturers want to sell more electric cars at a higher price. Which of the following events would have this effect?

"The price of compact fluorescent light bulbs fell because of improvements in production technology. As a result, the demand for incandescent light bulbs decreased. This caused the price of incandescent light bulbs to fall; as the price of incandescent light bulbs fell the demand for incandescent light bulbs decreased even further." Evaluate this statement.

Figure 3-8 -Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₂ and S₁ (point C). Which of the following changes would cause the equilibrium to change to point B?

Figure 3-7 -Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for laptop computers. Which panel best describes what happens in this market when the price of computer hard drives falls?

The popularity of digital cameras has enticed large discount stores like Wal-Mart and Costco to offer digital photo printing services. How does the offering of the printing service by Wal-Mart and Costco affect the digital photo printing market?