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

Article Summary World Tourism Day 2017, with its official celebration on September 27 in Qatar, was focused on sustainable tourism. Established by the United Nations World Tourism Organization (UNWTO), World Tourism Day has been celebrated since 1980, and the theme for 2017 was the "International Year of Sustainable Tourism for Development." The event was designed with two sessions: one focused on 'Tourism as a driver of economic growth', and the other 'Tourism and the Planet: committed to a greener future'. With over 1.2 billion travellers crossing international borders in 2016, and that number expected to grow to 1.8 billion by 2030, sustainable tourism is viewed by many as an important catalyst for diversification and economic growth. Source: Vicky Karantzavelou, " World Tourism Day 2017 celebrated on the theme Sustainable Tourism - a Tool for Development," traveldailynews.com, August 14, 2017 -Refer to the Article Summary.Assume that more global tourist destinations begin to offer and publicize sustainable tourism to American tourists and, due to the growing number of millennials attracted to sustainability, more Americans choose to embrace sustainable tourism.All else equal, what will happen in the market for sustainable tourism as a result of these two factors?

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 the price of oranges, a substitute for apples, decreases and the wages of apple workers increase, how will the equilibrium point change?

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

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

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

An increase in input costs in the production of electric automobiles caused the price of electric automobiles to rise.Holding everything else constant, how would this affect the market for gasoline-powered automobiles (a substitute for electric automobiles)?

The phrase "demand has decreased" means that

Figure 3-4 -Refer to Figure 3-4.If the price is $10,

The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in purchasing power as a result of the price change.

If a decrease in income leads to an increase in the demand for sardines, then sardines are

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.

Assume that the hourly price for the services of tarot card readers has risen and sales of these services have also risen.One can conclude that

Figure 3-1 -Refer to Figure 3-1.A decrease in the price of the product would be represented by a movement from

In response to a surplus the market price of a good will fall; as the price falls, the quantity demanded will increase and quantity supplied will decrease until equilibrium is reached.

Suppose that in October, market analysts predict that the price of platinum will fall in November.What happens in the platinum market in October, holding everything else constant?

An increase in the price of inputs will cause the supply curve for a product to shift to the right.

Let D = demand, S = supply, P = equilibrium price, and Q= equilibrium quantity.What happens in the market for walnuts if the Centers for Disease Control and Prevention announces that consuming a half cup of walnuts each week helps to lower levels of bad cholesterol?

Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

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

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