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

Holding everything else constant, a decrease in the price of GPS systems will result in

Figure 3-7 -Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for ramen noodles, an inferior good. Which panel describes what happens in this market as a result of an increase in income?

Figure 3-4 -Refer to Figure 3-4. If the current market price is $25, the market will achieve equilibrium by

A ________ demand curve for shampoo would be caused by a change in the price of shampoo.

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

A movement along the demand curve for toothpaste would be caused by

As the number of firms in a market increases, the supply curve will shift to the left and the equilibrium price will rise.

Which of the following would shift the supply curve for energy drinks to the left?

If a decrease in income leads to a decrease in the demand for ice cream, then ice cream is

What is the difference between a market equilibrium and a competitive market equilibrium?

Which of the following is the correct way to describe equilibrium in a market?

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

Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?

Table 3-1 -Refer to Table 3-1. The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia) and the rest of the market. At a price of $5, the quantity demanded in the market would be

Suppose that McDonald's successfully implements self-serve kiosks in their restaurants, which allows the company to reduce the number of employees at each location. All else equal, this technological improvement would

Which of the following is evidence of a shortage of chocolate?

Select the phrase that correctly completes the following statement. "An increase in input prices caused a decrease in the supply of baseballs. As a result ________."

"Because Coke and Pepsi are substitutes, a decrease in the price of Pepsi will cause the demand for Coke to decrease. This initial shift in demand for Coke results in a lower price for Coke; this lower price will cause the demand curve for Coke to shift to the left." Which of the following correctly comments on this statement?

At market equilibrium,

Cole was discussing the market for cocoa beans with his friend John Schmidt. Cole said, "Ever since Venezuela announced that its cocoa harvest was its lowest ever in fifteen years, the price of cocoa beans has been rising and rising and people are buying more and more. I think the demand for cocoa beans must be upward sloping." Is Cole right? Briefly explain why or why not.