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

Figure 3-5 -Refer to Figure 3-5. At a price of $15, the quantity sold

Figure 3-4 -Refer to Figure 3-4. If the price is $20

The supply curve for umbrellas

The decline in the popularity of clothing made from animal fur has enticed large department stores like J. C. Penney and Sears to discontinue sales of animal-fur products. How does discontinuing sales of these products by J.C. Penney and Sears affect the animal-fur clothing market?

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve. As a result

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left, equilibrium price and equilibrium quantity will both increase.

Would a change in the price of in-line skates cause a change in the supply of in-line skates? Why or why not?

Assume that California Merlot is a normal good. Prices of California Merlot have risen steadily in recent years. Over this same period, prices for French oak barrels used for wine storage have dropped and consumer incomes have risen. Which of the following best explains the rising prices of California Merlots?

Figure 3-2 -Refer to Figure 3-2. A decrease in productivity would be represented by a movement from

Figure 3-1 -Refer to Figure 3-1. An increase in the price of a complement would be represented by a movement from

In October 2005, the U.S. Fish and Wildlife Service banned the importation of beluga caviar, the most prized of caviars, from the Caspian Sea. What happened in the market for caviar in the United States?

Using Richard Tedlow's "three phases of marketing", the premium bottled water industry is probably in

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 D₁ and S₁ (point A). If there is a shortage of apples, how will the equilibrium point change?

Assume that the price for swimming pool maintenance services has risen and sales of these services have fallen. One can conclude that

Figure 3-7 -Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for tuna. Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen?

A decrease in the price of pork will result in

Table 3-6 -Refer to Table 3-6. The table contains information about the sorghum market. Use the table to answer the following questions. a. What are the equilibrium price and quantity of sorghum? b. Suppose the prevailing price is $6 per bushel. Is there a shortage or a surplus in the market? c. What is the quantity of the shortage or surplus? d. How many bushels will be sold if the market price is $6 per bushel? e. If the market price is $6 per bushel, what must happen to restore equilibrium in the market? f. At what price will suppliers be able to sell 36,000 bushels of sorghum? g. Suppose the market price is $14 per bushel. Is there a shortage or a surplus in the market? h. What is the quantity of the shortage or surplus? i. How many bushels will be sold if the market price is $14 per bushel? j. If the market price is $14 per bushel, what must happen to restore equilibrium in the market?

Harvey Rabbitt pays for monthly cable TV service. Last week, the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area. How is the market for cable TV services affected by this?

Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen. One can conclude that

Due to wildfires in Northern California, agricultural experts predict a 30 percent decline in this year's grape harvest. What happens in the California wine market as a result of this announcement?