Exam 3: Demand and Supply

Use the following to answer questions Exhibit: Demand and Supply-Determinants -(Exhibit: Demand and Supply-Determinants) The exhibit shows how supply and demand might shift in response to specific events.Suppose the technology for producing automotive gasoline improves.Which panel best describes how this will affect the market for automotive gasoline?

An increase in demand and a decrease in supply, will lead to a(n) ________ in equilibrium quantity and a(n) ________ in equilibrium price.

A surplus will cause pressure on the price to fall.

If the current price is above the equilibrium price, we would expect:

Use the following to answer questions Exhibit: Demand and Supply Shifters -(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events.Suppose the price of lumber falls dramatically.Which panel best describes how this will affect the market for houses?

Use the following to answer questions Exhibit: Demand and Supply of Gasoline -(Exhibit: Demand and Supply of Gasoline) The initial price and quantity (at intersection of S₁ and D)in equilibrium are:

In the Case in Point on "The Monks of St.Benedict's," the Monks got out of the egg business largely because:

When the price of gas goes up and the demand for tires goes down, this means tires and gas are:

If the demand for housing increases and the supply of housing decreases:

An increase in the demand for gasoline today caused by concerns that gasoline prices will be higher tomorrow is most likely attributable to which demand shifter?

Use the following to answer questions Exhibit: Simultaneous Shifts in Demand and Supply -(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves.In this market, the change in supply may have resulted from:

Researchers demonstrate conclusively that drinking 4-6 ounces of ginger ale each day increases life expectancy by 3 years.What happens in the market for ginger ale?

Which of the following would shift the demand curve for new textbooks to the right?

Use the following to answer questions Exhibit: The Supply of Music Downloads -(Exhibit: The Supply of Music Downloads) A decrease in the fee charged for music downloads would result in a change illustrated by the move from:

Use the following to answer questions Exhibit: Demand and Supply-Determinants -(Exhibit: Demand and Supply-Determinants) The exhibit shows how supply and demand might shift in response to specific events.Suppose the technology for producing automotive gasoline improves.Which panel best describes how this will affect the market for gasoline additives, a complement of automotive gasoline?

Use the following to answer questions Exhibit: Demand and Supply Curves -(Exhibit: Demand and Supply Curves) A price of $25 per unit will result in:

Given that milk and cookies are complements, suppose the price of flour (an ingredient in cookies) Rises.What happens in the market for cookies?

Demand and supply are terms that refer to the behavior of people and firms as they interact in markets.

Use the following to answer questions Exhibit: Demand and Supply Shifters -(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events.Suppose consumer incomes increase.Which panel best describes how this will affect the market for dress ties, a normal good?

A current price below the equilibrium price will result in a surplus.