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

In 1984, the National Minimum Drinking Age Act was passed, raising the legal age to consume alcoholic beverages in the United States to 21. In much of Europe, the legal age to consume alcohol is 18. If the legal drinking age in the United States was changed back to 18, how would this affect the market for alcoholic beverages? What would happen to the equilibrium price and quantity of alcoholic beverages?

Discuss the correct and incorrect economic analysis in the following statement. "If good weather in Hawaii creates a bumper crop of pineapples, the supply of pineapples will increase. This will result in a price decrease, which will then cause the supply of pineapples to decrease."

If, in response to a decrease in the price of coffee, the quantity of coffee demanded increases, then economists would describe this as

Figure 3-5 -Refer to Figure 3-5. At a price of $0,

Elvira decreased her consumption of bananas when the price of peanut butter increased. For Elvira, peanut butter and bananas are

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

Figure 3-4 -Refer to Figure 3-4. If the price is $15,

Market equilibrium occurs where supply equals demand.

If the population increases and input prices increase, the equilibrium price of a product will definitely increase.

Which of the following would cause an increase in the supply of cheese?

Suppose favorable weather resulted in a bumper crop of oranges in Florida. In the market for oranges

If consumers believe the price of LCD televisions will decrease in the future, this will cause the demand for LCD televisions to increase now.

Technological advancements have led to lower prices and an increase in the sale of color laser printers. How does this affect the market for laser printer ink cartridges?

In recent years, the demand for orange juice in the United States has fallen and the supply of orange juice has also fallen, with the decrease in supply being larger than the decrease in demand. In this situation, the equilibrium price of orange juice will have ________ and the equilibrium quantity of orange juice will have ________ .

Figure 3-4 -Refer to Figure 3-4. At a price of $15, how many units will be sold?

Figure 3-4 -Refer to Figure 3-4. At a price of $25, how many units will be sold?

Assume that both the demand curve and the supply curve for DVD players shift to the left but the demand curve shifts more than the supply curve. As a result

Figure 3-2 -Refer to Figure 3-2. An increase in the expected future price of the product would be represented by a movement from

A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in

If the price of train tickets decreases, what will be the impact in the market for bus travel?