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

Farmers can plant either corn or soybeans in their fields.Which of the following would cause the supply of soybeans to increase?

Figure 3-1 -Refer to Figure 3-1.An increase in the price of a complement would be represented by a movement from

Figure 3-1 -Refer to Figure 3-1.A decrease population would be represented by a movement from

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

________ means the supply curve has shifted to the right,while ________ refers to a movement along a given supply curve in response to an increase in price.

A decrease in the price of pork will result in

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

One would speak of a change in the quantity of a good supplied,rather than a change in supply,if

If in the market for apples the supply has decreased then

Tom Searchinger,a senior attorney at the Environmental Defense Fund,observed that generous farm subsidies have encouraged farmers to produce more corn and more wheat.How does this affect the market for fertilizer?

If the Apple iPhone and the Samsung Galaxy are considered substitutes,then,other things equal,an increase in the price of the iPhone will

In 1984,the National Minimum Drinking Age Act was passed,raising the legal age to consume alcoholic beverages in the United States to 21.In much of Europe,the legal age to consume alcohol is 18.If the legal drinking age in the United States was changed back to 18,how would this affect the market for alcoholic beverages? What would happen to the equilibrium price and quantity of alcoholic beverages?

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?

George Gnat subscribes to a monthly pest control service for his home.Last week the owner of the service informed George that he will have to raise his monthly service fee because of increases in the price of gasoline used by his workers on their service trips.How is the market for pest control services affected by this?

What is the difference between a "change in demand" and a "change in quantity demanded"?

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

Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production.What happens in the Australian wool market as a result of this announcement?

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

Explain the Law of Demand.

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D₁ and S₁ (point A) If there is an increase in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change?