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

Quantity supplied refers to the amount of a good or service that a firm is willing and able to supply at a given price.

Figure 3-1 -Refer to Figure 3-1.An increase in the expected future price of the product would be represented by a movement from

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

Vineyards can grow either red wine grapes or white wine grapes on their land.Which of the following would cause the supply of red wine grapes to decrease?

A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in

The popularity of digital cameras has enticed large discount stores like Wal-Mart and Costco to offer digital photo printing services.How does this affect the digital photo printing market?

Explain the difference between a normal good and an inferior good.

If a decrease in income leads to an increase in the demand for sardines, then sardines are

Figure 3-4 -Refer to Figure 3-4.If the price is $10,

The law of demand implies, holding everything else constant, that as the price of bagels increases,

In 1984, the National Minimum Drinking Age Act was passed, raising the legal age to consume alcoholic beverages in the United States to 21.In much of Europe, the legal age to consume alcohol is 18.If the legal drinking age in the United States was changed back to 18, how would this affect the market for alcoholic beverages? What would happen to the equilibrium price and quantity of alcoholic beverages?

How does the decreasing use of traditional cameras affect the market for traditional camera film?

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

What would happen in the market for laser eye surgery if insurance companies started to cover a portion of the price of voluntary procedures?

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

A decrease in the equilibrium quantity for a product will result

Figure 3-2 -Refer to Figure 3-2.An increase in the number of firms in the market would be represented by a movement from

A positive technological change will cause the supply of a good to increase.

How does the increasing use of MP3 players affect the market for compact discs?

What is the ceteris paribus condition?