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

'Scarcity' is defined as the situation that exists when the quantity demanded for a good is greater than the quantity supplied.

The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product.

Figure 3.5 -Refer to Figure 3.5. At a price of $20, there would be a:

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

If the demand for a product decreases and the supply of the same product decreases, the equilibrium price will decrease.

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

The cost of raising beef cattle has risen at the same time as consumer preference for beef has fallen. In the market for beef, this would be represented by the equilibrium price ________ and the equilibrium quantity ________.

If the demand for a product increases and the supply of the product does not change, equilibrium price and equilibrium quantity will both increase.

The supply curve for watches:

If the price of a product is above equilibrium, what forces the price toward the equilibrium price? _____________________________________________________________________________________________ _____________________________________________________________________________________________

A decrease in the equilibrium price for a product will result when:

Suppose that when the price of strawberries decreases, Simone increases her purchase of whipped cream. To Simone:

An economist observes a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon. These are the effects of:

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

Holding everything else constant, a decrease in the price of bicycles will result in:

Studies have shown links between increased calcium consumption and a reduction in osteoporosis. How does this affect the market for calcium?

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 fertiliser used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change?

All else being equal, the decrease in consumer preference predicted by Apple for its iPhone 8 would be represented by a shift of the:

If the price of downloadable apps was to decrease, then the:

Which of the following is evidence of a surplus of bananas?