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

Suppose a negative technological change in the production of disease-resistant wheat caused the price of wheat to rise.Holding everything else constant, how would this affect the market for corn (a substitute for wheat)?

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

Suppose favorable weather resulted in a bumper crop of oranges in Florida.In the market for oranges

Assume there is a shortage in the market for digital music players.Which of the following statements correctly describes this situation?

As the number of firms in a market increases, the supply curve will shift to the right and the equilibrium quantity will rise.

If in the market for oranges the supply has increased, then

Figure 3-4 -Refer to Figure 3-4.At a price of $10, how many units will be sold?

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?

In October 2005, the U.S.Fish and Wildlife Service banned the importation of beluga caviar, the most prized of caviars, from the Caspian Sea.What happened in the market for caviar in the United States?

The popularity of digital cameras has enticed large discount stores like Walmart and Costco to offer digital photo printing services.How does the offering of the printing service by Walmart and Costco affect the digital photo printing market?

Factors that will tend to lead to higher demand for premium bottled water include all of the following except

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

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

The substitution effect explains why there is a direct relationship between the price of a product and the quantity of the product demanded.

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

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

Figure 3-1 -Refer to Figure 3-1.If the product represented is a normal good, a decrease in income would be represented by a movement from

A decrease in the price of GPS systems will result in

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

When the price of a normal good falls, consumers buy a larger quantity because of the ________ effect and the ________ effect.