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

In recent years, the cost of producing organic produce in the United States has decreased largely due technological advancement.At the same time, more and more Americans prefer organic produce over conventional produce.Which of the following best explains the effect of these events in the organic produce market?

Figure 3-5 -Refer to Figure 3-5.At a price of $15

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

The Internet has created a new category in the book selling market, namely, the "barely used" book.How does the availability of barely used books affect the market for new books?

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?

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)?

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

An article in the Wall Street Journal in early 2001 noted two developments in the market for laser eye surgery.The first development concerned side effects from the surgery, including blurred vision.The second development was that the companies renting eye-surgery machinery to doctors had reduced their charges.In the market for laser eye surgeries, these two developments

If an increase in income leads to in an increase in the demand for peanut butter, then peanut butter is

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for Fruitopia, a soft drink.Which panel describes what happens in the market for Fruitopia when the price of Snapple, a substitute product, decreases?

If the price of refillable butane lighters was to decrease, then

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for potatoes and that steak and potatoes are complements.What panel describes what happens in this market when the price of steak rises?

A change in supply is represented by a shift of the supply curve.

Which of the following will shift the demand curve for a good?

Which of the following would cause an increase in the equilibrium price and an increase in the equilibrium quantity of watermelons?

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

Prices of microbrewery beer (assume that this is a normal good)have risen steadily in recent years.Over this same period, prices for fermenting vats used in beer making have also risen and consumer incomes have fallen.Which of the following best explains the rising prices of microbrewery beer?

In 2004, hurricanes damaged a large portion of Florida's orange crop.As a result of this, many orange growers were not able to supply fruit to the market.If, following the hurricane, the price remained at its pre-hurricane level, we would expect to see

If a demand curve shifts to the left, then

If the price of grapefruit rises, the substitution effect due to the price change will cause