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

Prices of commercial airline tickets (assume that this is a normal good)have fallen in recent months.Over this same period,the price of jet fuel has risen and consumer incomes have fallen.Which of the following best explains the falling prices of airline tickets?

Several studies have shown promising links between green tea consumption and cancer prevention.How does this affect the market for green tea?

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of inputs would be represented by a movement from

A change in which variable will change the market demand for a product?

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

Figure 3-8 -Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) If the price of motorcycle engines increases, and the wages of motorcycle workers increase, how will the equilibrium point change?

"The price of digital cameras fell because of improvements in production technology. As a result,the demand for non-digital cameras decreased. This caused the price of non-digital cameras to fall; as the price of non-digital cameras fell the demand for non-digital cameras decreased even further." Evaluate this statement.

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt when the price of ice cream,a substitute product,increases?

Table 3-1 -Refer to Table 3-1. The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi)and the rest of the market. If the price of Kona coffee rises from $4 to $5,the market quantity demanded would

Which of the following would cause both the equilibrium price and equilibrium quantity of barley (assume that barley is an inferior good)to increase?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for coffee. What happens in this market if buyers expect the price of coffee to rise?

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

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

Figure 3-5 -Refer to Figure 3-5.In a free market such as that depicted above,a shortage is eliminated by

In September,buyers of silver expect that the price of silver will rise in October. What happens in the silver market in September,holding all else constant?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for blu-ray discs. Which panel best describes what happens in this market if there is a substantial increase in the price of blu-ray players?

One would speak of a movement along a supply curve for a good,rather than a change in supply,if

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

________ means the supply curve has shifted to the right,while ________ refers to a movement along a given supply curve in response to an increase in price.

Figure 3-2 -Refer to Figure 3-2.An increase in the expected future price of the product would be represented by a movement from