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

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

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for used clothing,an inferior good.Which panel describes what happens in this market as a result of a decrease in income?

Tomas increased his consumption of potato chips when the price of pistachios increased.For Tomas,potato chips and pistachios are

Technological advancements have led to lower prices and an increase in the sale of color laser printers.How does this affect the market for laser printer ink cartridges?

The law of demand implies,holding everything else constant,that

Prices of California Merlot wine (assume that this is a normal good)have risen steadily in recent years.Over this same period,prices for French oak barrels used for wine storage have dropped and consumer incomes have risen.Which of the following best explains the rising prices of California Merlots?

Which of the following will shift the demand curve for a good?

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 a shortage of apples how will the equilibrium point change?

A firm has an incentive to decrease supply now and increase supply in the future if it expects that

"Because apples and oranges are substitutes,an increase in the price of oranges will cause the demand for apples to increase.This initial shift in demand for apples results in a higher price for apples; this higher price will cause the demand curve for apples to shift to the right." Which of the following correctly comments on this statement?

Electric car enthusiasts want to buy more electric cars at a lower price.All of the following events would have this effect except

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

Use the following supply schedule for cherries to draw a graph of the supply curve.Be sure to label the supply curve and each axis,and show each point on the supply curve. Price (dollars per bushel) Quantity (thausands af bushels) 8 50 16 100 24 150 32 200 40 250

Which of the following is the correct way to describe equilibrium in a market?

If a union successfully negotiates for higher wages and benefits for steel workers,what impact would this have on the supply and demand in the market for steel,assuming no other changes take place in this market?

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. Price (dollars per Quantity (thausands d bushels) 600 40 50 80 40 120 30 160 20 200

In June,buyers of titanium expect that the price of titanium will fall in July.What happens in the titanium market in June,holding everything else constant?

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

A(n)________ is represented by a leftward shift of the demand curve while a(n)________ is represented by a movement along a given demand curve.

An increase in the demand for lobster due to changes in consumer tastes,accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster,will result in