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

If a firm has an incentive to increase supply now and decrease supply in the future, then the firm expects that the

For each of the following pairs of products, state which are complements, which are substitutes, and which are unrelated. a. Blu-ray discs and video-on-demand b. Fiat 500 and Mini Cooper S c. Toothpaste and toothbrush d. Popcorn and snowboards e. Razors and razor blades

The phrase "demand has increased" means that

Last month, the Tecumseh Corporation supplied 400 units of three-ring binders at $6 per unit. This month, the company supplied the same quantity of binders at $4 per unit. Based on this evidence, Tecumseh has experienced

Explain the difference between substitutes and complements.

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

Suppose a drought resulted in a major reduction in the California lettuce crop. In the market for lettuce

Table 3-4 -Refer to Table 3-4. The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market. At a price of $10, the quantity demanded in the market would be

A change in which variable will change the market demand for a product?

Use the following demand schedule for cherries to draw a graph of the demand curve. Be sure to label the demand curve and each axis, and show each point on the demand curve.

What is the difference between an "increase in demand" and an "increase in quantity demanded"?

Figure 3-8 -Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D₁ and S₂ (point B). If there is an decrease in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change?

Figure 3-7 -Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for coffee. What happens in this market if buyers expect the price of coffee to rise?

Figure 3-8 -Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A). If there is an increase in the wages of motorcycle workers and an increase in the price of motorcycle insurance, a complement to motorcycles, the equilibrium could move to which point?

Figure 3-8 -Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D₁ and S₁ (point A). If there is an increase in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change?

A demand curve shows the relationship between

Table 3-4 -Refer to Table 3-4. The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market. If the price of cashews falls from $4 to $2, the market quantity demanded would

An increase in the price of MP3 players will result in

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

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