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

"Because Coke and Pepsi are substitutes,a decrease in the price of Pepsi will cause the demand for Coke to decrease.This initial shift in demand for Coke results in a lower price for Coke; this lower price will cause the demand curve for Coke to shift to the left." Which of the following correctly comments on this statement?

Electric car manufacturers want to sell more electric cars at a higher price.Which of the following events would have this effect?

Factory incentives on cell phones have encouraged consumers to upgrade their phones.How does this affect the market for bluetooth headsets?

Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases.

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for canvas tote bags.Assume that the price of tote bags is $15.At this price

In recent years the cost of producing organic produce in the U.S.has decreased largely due technological advancement.At the same time,more and more Americans prefer organic produce over conventional produce.Which of the following best explains the effect of these events in the organic produce market?

Table 3-1 Loose Leaf Tea Priceper lb. (dollars) Sunil's Quantity Demanded (lbs) Mia's Quantity Demanded (lbs) Rest af Market Quantity Demanded (lbs) Market Quantity Demanded (lbs) \ 8 4 0 30 6 7 2 40 5 9 3 51 4 12 5 64 3 15 8 90 -Refer to Table 3-1.The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia)and the rest of the market.If the price of loose-leaf tea rises from $3 to $4,the market quantity demanded would

A decrease in the equilibrium price for a product will result

Apple's decision in 2002 to focus on developing a smartphone rather than a tablet computer exemplifies the

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

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)?

If a decrease in income leads to in a decrease in the demand for mac and cheese,then mac and cheese is

Figure 3-4 -Refer to Figure 3-4.If the current market price is $25,the market will achieve equilibrium by

According to a recent study,"Stricter college alcohol policies,such as raising the price of alcohol,or banning alcohol on campus,decrease the number of students who use marijuana." On the basis of this information,how would you describe alcohol and marijuana?

A normal good is a good for which the demanded increases as income decreases,holding everything else constant.

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

Hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the Gulf coast states.In the market for gasoline

Table 3-5 Price per Bushel Quantity Demanded (bushels) Quantity Supplied (bushels) \ 3 30,000 0 6 26,000 4,000 9 22,000 9,000 12 18,000 12,000 15 15,000 15,000 18 12,000 22,000 21 8,000 28,000 24 4,000 36,000 -Refer to Table 3-5.The table contains information about the corn market.Use the table to answer the following questions. a.What are the equilibrium price and quantity of corn? b.Suppose the prevailing price is $9 per bushel.Is there a shortage or a surplus in the market? c.What is the quantity of the shortage or surplus? d.How many bushels will be sold if the market price is $9 per bushel? e.If the market price is $9 per bushel,what must happen to restore equilibrium in the market? f.At what price will suppliers be able to sell 22,000 bushels of corn? g.Suppose the market price is $21 per bushel.Is there a shortage or a surplus in the market? h.What is the quantity of the shortage or surplus? i.How many bushels will be sold if the market price is $21 per bushel? j.If the market price is $21 per bushel,what must happen to restore equilibrium in the market?

Hurricane Katrina damaged a large portion of refining and pipeline capacity when it swept through the Gulf coast states in August 2005.As a result of this,many gasoline distributors were not able to maintain normal deliveries.At the pre-hurricane equilibrium price (i.e.,at the initial equilibrium price),we would expect to see

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the supply curve shifts more than the demand curve.As a result