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

Which of the following generation categories has the largest population in the United States in 2015?

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

What is the difference between an "increase in demand" and an "increase in quantity demanded"?

Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good)to increase?

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

Article Summary More than a million Americans are estimated to have gone to other countries in 2014 for medical procedures. Documentary filmmaker Morgan Spurlock was among those Americans who travelled abroad in 2014 to partake in what is being referred to as "medical tourism". From his own experience and those of others who had also travelled for medical procedures, Spurlock found that there can be distinct advantages to medical tourism for certain patients and procedures. Those advantages include: The level of care offered in many hospitals, with the best hospitals reportedly meeting or exceeding Western standards; Significantly lower costs, examples of which include a heart bypass operation in the United States that typically runs $88,000 can cost as little as $31,500 in Costa Rica, and hip replacement surgery that averages $33,000 domestically is only $12,400 in Thailand; The ability to combine medical procedures with vacations to amazing locations around the globe. Source: Sean Redlitz, " Surf, sand ... and surgery? Inside the world of medical tourism," cnn.com, February 6, 2015 -Refer to the Article Summary above.Assume that more foreign governments and hospitals begin to offer and publicize their medical services to American medical tourists and, due to the growing number of aging baby boomers, more Americans desire hip-replacement surgery.All else equal, what will happen in the market for hip-replacement surgery as a result of these two factors?

Draw a demand curve and label it D1.On the graph, illustrate an increase in demand and a decrease in demand, and label the curves D2 and D3, respectively.Starting on demand curve D₁, explain the shift that would result from each of the following events: a.an increase in income and the good is a normal good b.an increase in income and the good is an inferior good c.a decrease in the price of a substitute good d.a decrease in the price of a complementary good e.an increase in the taste for the good f.a decrease in population g.an increase in the expected future price of the good

Which of the following would shift the supply curve for MP3 players to the left?

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 D₂ and S₂ (point

Which of the following statements is true?

"The price of compact fluorescent light bulbs fell because of improvements in production technology.As a result, the demand for incandescent light bulbs decreased.This caused the price of incandescent light bulbs to fall; as the price of incandescent light bulbs fell the demand for incandescent light bulbs decreased even further." Evaluate this statement.

Technological advances have resulted in lower prices for digital cameras.What is the impact of this on the market for traditional (non-digital)cameras?

The market for smartwatches has begun to grow, due in part to the success of the Apple Watch.Following the successful launch of the Apple Watch in 2015, companies such as Samsung, Sony, and LG have all developed products to compete with the Apple Watch.The smartwatches introduced to compete with the Apple Watch would be considered

Figure 3-1 -Refer to Figure 3-1.A decrease in taste or preference would be represented by a movement from

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

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for almonds.Which panel best describes what happens in this market when there is an increase in the productivity of almond harvesters?

Figure 3-4 -Refer to Figure 3-4.If the current market price is $15, the market will achieve equilibrium by

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 the demand curve for a product shifts to the left and the supply curve for the product shifts to the left, the equilibrium quantity will decrease.

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