Exam 3: Demand and Supply

When the price of an inferior good falls, the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased.

-Based on the above figure, which of the following is TRUE?

"If the price of crude oil falls, the demand for gasoline will increase, so people will by more gas and the price of gas will go up." Is this statement true or false? Explain.

Suppose people buy more of good 1 when the price of good 2 falls. These goods are

A supply curve shows the relation between the quantity of a good supplied and

If the price of a video rental is below its equilibrium price, there will be a ________ of video rentals and the price will ________.

The statement that "demand increases" means that there is a

Which of the following decreases the demand for an inferior good?

The Market for Wapanzo Beans Quantity Demanded Price Quantity Supplied (millions of pounds (dollars per (millions of pounds per year) pound) per year) -Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. If there is exceptionally good growing weather in the wapanzo bean growing region then supply will ________ and demand will ________.

-In the above figure, in order for the equilibrium price to remain constant while the equilibrium quantity increases, the

Which of the following is NOT one of the factors that influences the supply of a product?

Ham and eggs are complements. If the price of ham rises, the demand for eggs will

"The recent hurricanes in Florida are bringing financial gain to California citrus growers. Due to extensive damage to the Florida citrus crop, California citrus products are commanding their highest prices ever." Which of the following statements best explains the economics of this quotation?

Which of the following would NOT shift the demand curve for turkey?

For "an increase in the quantity demanded" but not "an increase in demand" to occur, there must be a

During the past twenty years, the prices of prescription drugs, relative to the prices of other goods, have risen, yet Americans buy more prescription drugs than ever. This might be because

-Consider the demand curves for soft drinks shown in the figure above. A movement from point a to point b represents

Auto workers negotiate a wage increase. How does this wage hike affect the supply of cars?

The cost of producing aspirin increases simultaneously as doctors find that one aspirin per day reduces the risk of heart attacks. The supply of aspirin ________ and the demand for aspirin ________ so that the equilibrium price of aspirin ________.

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bottle of soda?