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

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for tuna.Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen?

Article Summary A growing number of U.S. citizens are going to other countries for elective surgery procedures. Improved quality and significant cost savings abroad have attracted an increasing number of what are being referred to as American medical tourists, especially those who either do not have insurance or whose insurance does not cover the desired procedure. As few as five years ago, Americans tended to travel to countries such as Thailand or Mexico for the procedures, but many are now choosing to go to Europe, where governments and hospitals are now publicizing these services. Many of the procedures being done overseas are joint replacement, and partly in response to the number of patients going abroad for these procedures, programs are being developed to reduce the cost of these surgeries in the United States. -Refer to the Article Summary.If more European governments and hospitals begin to offer and publicize their services to American medical tourists and,due to the growing number of aging baby boomers,more Americans desire joint-replacement surgery,what will happen in the market for joint-replacement surgery as a result of these two factors?

The demand by all the consumers of a given good or service is the ________ for the good or service.

What is the difference between a demand schedule and a demand curve?

Figure 3-5 -Refer to Figure 3-5.At a price of $15,the quantity sold

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

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

Nearly a quarter of China's 1.3 billion people are under the age of 15.How will this affect high school enrollment over the next fifteen years? The labor market over the next fifteen years?

An decrease in supply is caused by a decrease in the price of the product.

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?

Cigars are becoming increasingly popular in the United States,and a growing number of cigar manufacturers in the Caribbean and Central America have begun producing and exporting cigars to the U.S.market.How has this affected the equilibrium price and quantity of cigars?

Indicate whether each of the following situations would shift the supply curve to the left,to the right,or not at all. a.An increase in the number of firms in the market b.An increase in the current price of the product c.A decrease in productivity d.An increase in the expected future price of a product e.A decrease in the price of an input

Which of the following would cause the equilibrium price of apple juice to decrease and the equilibrium quantity of apple juice to increase?

If the price of grapefruit rises,the substitution effect due to the price change will cause

Figure 3-2 -Refer to Figure 3-2.A decrease in productivity would be represented by a movement from

If consumers believe the price of hybrid vehicles will decrease in the future,this will cause the demand for hybrid vehicles to decrease now.

Use the following demand schedule for apples 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) 30 20 25 40 20 60 15 80 10 100

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) If the price of motorcycle engines increases, and the wages of motorcycle workers increase, how will the equilibrium point change?

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for solar panels if the government offers tax breaks to encourage manufacturers to produce more solar panels?

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of inputs would be represented by a movement from