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

If the price of petrol decreases, what will be the impact in the market for public transportation?

If the price of peaches, a substitute for plums, decreases, then the demand for plums will increase.

What would happen in the market for laser eye surgery if insurance companies started to cover a portion of the price of voluntary procedures?

A decrease in the demand for incandescent light bulbs due to changes in consumer tastes, accompanied by a decrease in the supply of incandescent light bulbs as a result of government restrictions, will result in:

If a demand curve shifts to the left, then:

The supply curve will shift to the right and the equilibrium price will fall if new producers enter the industry.

What are the two effects that explain the Law of Demand? Briefly explain each effect. _____________________________________________________________________________________________ _____________________________________________________________________________________________

At a product's equilibrium price:

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:

How does the decreasing use of traditional cameras affect the market for traditional camera film?

In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is a normal good. a.The population increases and the price of inputs increase. b.The price of a complement increases and technology advances. c.The number of firms in the market increases and income increases. d.Price is expected to increase in the future. e.Consumer preference increases and the price of a substitute in production decreases _____________________________________________________________________________________________ _____________________________________________________________________________________________

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 _____________________________________________________________________________________________ _____________________________________________________________________________________________

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

Last week, the local pay TV company lowered the monthly pay TV price because the city council has granted approval for three new pay TV companies to service the area. How is the market for pay TV services affected by this?

The market demand for a product will shift if which of the following variables shift?

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

Figure 3.1 -Refer to Figure 3.1. If the product represented is an inferior good, an increase in income would be represented by a movement from:

How is the market for corn (a substitute for wheat)affected by a positive technological change in the production of disease-resistant wheat caused the price of wheat to fall, holding everything else constant?

Sardines are ___________ if a decrease in income leads to an increase in the demand.

Figure 3.2 -Refer to Figure 3.2. An increase in the number of firms in the market would be represented by a movement from: