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

The following appeared in a Florida newspaper a week after a hurricane hit the state."Floridians are relieved that the storm produced no fatalities but homeowners face weeks, if not months, of rebuilding.Matters are made worse by the soaring prices of plywood and other building materials that always follow in a hurricane's path.Complaints of profiteering and price gouging have not deterred firms from raising their prices by over 100 percent." Which of the following offers the best explanation for the price increases referred to in the article?

A movement along the demand curve for toothpaste would be caused by

If the price of a product is above equilibrium, what forces it down?

For products like virtual reality headsets, ________ products such as games produced for use with the headsets have shown to be needed for the headsets to compete with ________ products like game consoles.

Suppose that McDonald's successfully implements self-serve kiosks in their restaurants, which allows the company to reduce the number of employees at each location.All else equal, this technological improvement would

Figure 3-5 -Refer to Figure 3-5.At a price of $10, the quantity sold

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

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 a shortage of apples, how will the equilibrium point change?

If a firm has an incentive to increase supply now and decrease supply in the future, then the firm expects that the

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left, but the supply curve shifts less than the demand curve.As a result

Market equilibrium occurs where supply equals demand.

What are the five variables that will shift the demand curve?

If a firm expects that the price of its product will be higher in the future than it is today, then

Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases.

If the price of orchids falls, the substitution effect due to the price change will cause

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

If in the market for peaches the supply curve has shifted to the left

Which of the following statements is true?

The cost of producing cigarettes in the United States has increased and at the same time, more and more Americans are choosing to not smoke cigarettes.Which of the following best explains the effect of these events in the cigarette market?

Assume that the price for swimming pool maintenance services has risen and sales of these services have fallen.One can conclude that