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

If more insurance companies decide to cover part of the price of voluntary laser eye surgery and more doctors decide to enter the field of laser eye surgery, what will happen in the market for laser eye surgery as a result of these two factors?

Figure 3-5 -Refer to Figure 3-5. At a price of $10, the quantity sold

If pilots and flight attendants agree to wage and benefit reductions in the wake of the financial difficulties in the airline industry, what impact would this have on the supply and demand in the market for airline service, assuming no other changes take place in this market?

Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

For products like virtual reality headsets, ________ products such as games produced for use with the headsets have shown to be needed for the headsets to compete with ________ products like game consoles.

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

If virtual reality headsets are considered substitutes for game consoles, then a decline in the price of game consoles would, all else equal,

When Toyota introduced its 2010 Prius, it announced that the average retail price of the 2010 model would be lower than the average retail price was for the equivalent 2009 model. Which of the following would explain the price differential?

Suppose that McDonald's successfully implements self-serve kiosks in their restaurants, and this investment in technology allows the company to reduce the number of employees at each location. All else equal, this technological improvement would ________ the equilibrium price for its products and ________ the equilibrium quantity consumed.

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

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

Assume that in recent years the cost of producing microbrew beer in the U.S. has decreased largely due to technological improvements. At the same time, more and more Americans prefer microbrew beer over wine. Which of the following best explains the effect of these events in the microbrew beer market?

How does the decreasing use of DVD players affect the market for prerecorded DVDs?

________ means the supply curve has shifted to the right, while ________ refers to a movement along a given supply curve in response to an increase in price.

Suppose a positive technological change in the production of disease-resistant corn caused the price of corn to fall. Holding everything else constant, how would this affect the market for wheat (a substitute for corn)?

Let D= demand, S = supply, P = equilibrium price, and Q= equilibrium quantity. What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged?

In January, buyers of gold expect that the price of gold will rise in February. What happens in the gold market in January, holding all else constant?

At a product's equilibrium price

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

Figure 3-1 -Refer to Figure 3-1. If the product represented is a normal good, an increase in income would be represented by a movement from