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

Figure 3.4 -Refer to Figure 3.4.If the price is $10,

If the price of a product is above equilibrium, what forces it down?

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 an increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples, the equilibrium could move to which point?

If provinces 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?

For each of the following pairs of products state which are complements, which are substitutes, and which are unrelated. a.Digital camera and memory stick b.7Up and Mountain Dew c.Swimsuits and flip-flo d.Tylenol and cat food e.Photocopier and paper

Chips and salsa are complements.If the price of salsa decreases, the demand for chips will increase.

Figure 3.1 -Refer to Figure 3.1.If the product represented is an inferior good, an increase in income would be represented by a movement from

Select the phrase that correctly completes the following statement."A positive change in technology caused an increase in the supply of flat-screen televisions.As a result ________."

What is the law of supply? What does this law imply about the shape of the supply curve?

If an increase in income leads to a decrease in the demand for popcorn, then popcorn is

Figure 3.6 -Refer to Figure 3.6.The figure above represents the market for canvas tote bags.Compare the conditions in the market when the price is $50 and when the price is $35.Which of the following describes how the market differs at these prices?

From a supply perspective, what impact would an increase in the price of motorcycles have on the market for motorcycles?

An article in the Wall Street Journal in early 2001 noted two developments in the market for laser eye surgery.The first development concerned side effects from the surgery, including blurred vision.The second development was that the companies renting eye-surgery machinery to doctors had reduced their charges.In the market for laser eye surgeries, these two developments

How does the increasing use of MP3 players affect the market for compact discs?

Olive oil producers want to sell more olive oil at a higher price.Which of the following events would have this effect?

LCD displays were first researched in the 1960s.In 1999 Corning Inc.developed a new manufacturing process that allowed for the production of thin, clear glass.How did this change in technology affect the market for LCD TVs?

In response to a surplus the market price of a good will fall; as the price falls, the quantity demanded will increase and quantity supplies will decrease until equilibrium is reached.

If, in the market for oranges, the supply has increased then

In a perfectly competitive market, there are ________ buyers and ________ sellers.

Which of the following would cause a decrease in the supply of milk?