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

Let D = demand, S = supply, P = equilibrium price, and Q = equilibrium quantity.What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged?

If more insurance companies decide to cover part of the price of voluntary laser eye surgery and more doctors decide to enter the field of laser eye surgery, what will happen in the market for laser eye surgery as a result of these two factors?

Discuss the correct and incorrect economic analysis in the following statement. "If good weather in Hawaii creates a bumper crop of pineapples, the supply of pineapples will increase.This will result in a price decrease, which will then cause the supply of pineapples to decrease."

From a supply perspective, what impact would an increase in the price of motorcycles have on the market for motorcycles?

Cigars are becoming increasingly popular in the United States, and a growing number of cigar manufacturers in the Caribbean and Central America have begun producing and exporting cigars to the U.S.market.How has this affected the equilibrium price and quantity of cigars?

Suppose that when the price of hamburgers decreases, the Landry family decreases their purchases of chicken nuggets.To the Landry family

If the price of music downloads was to decrease, then

As the number of firms in a market decreases, the supply curve will shift to the left and the equilibrium price will rise.

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

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

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for canvas tote bags.Assume that the price of tote bags is $15.At this price

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 more than the demand curve.As a result

Orange juice drinkers want to consume more orange juice at a lower price.Which of the following events would have this effect?

The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product.

Table 3-2 -Refer to Table 3-2.The table above shows the demand schedules for caviar of two individuals (Ari and Sonia)and the rest of the market.If the price of caviar rises from $65 to $75, the market quantity demanded would

In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is a normal good. a.The population increases and the price of inputs increase. b.The price of a complement increases and technology advances. c.The number of firms in the market increases and income increases. d.Price is expected to increase in the future. e.Consumer preference increases and the price of a substitute in production decreases.

An increase in the price of off-road vehicles will result in

For each of the following pairs of products state which are complements, which are substitutes, and which are unrelated. A.Digital camera and memory stick B.7Up and Mountain Dew C.Swimsuits and flip-flops D.Tylenol and cat food E.Photocopier and paper

Buyers rush to purchase stocks in California vineyards following a forecast of a 30 percent decline in this year's grape harvest.What happens in the California wine market as a result of this announcement?

An increase in the quantity of a product supplied is caused by an increase in the price of the product.