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

Figure 3-6 -Refer to Figure 3-6. The figure above represents the market for coffee grinders.Assume that the market price is $21. Which of the following statement is true?

Figure 3-3 -Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for original Michelangelo sculptures and the market for Ray Ban sunglasses.Which graph most likely represents which market?

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 there is an increase in the wages of motorcycle workers and an increase in the price of motorcycle insurance, a complement to motorcycles, the equilibrium could move to which point?

A supply curve

Studies have shown that drinking one glass of red wine per day may help prevent heart disease.Assume this is true,and a fungal disease destroys a large portion of the grape harvest of California vineyards.In the market for red wine,these two developments would

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for tuna. Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen?

If the price of pork rinds falls,the substitution effect due to the price change will cause

In January,buyers of gold expect that the price of gold will fall in February.What happens in the gold market in January,holding everything else constant?

Figure 3-5 -Assume there is a surplus in the market for hybrid automobiles. Which of the following statements correctly describes this situation?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for ramen noodles,an inferior good. Which panel describes what happens in this market as a result of an increase in income?

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity. What happens in the market for solar panels if the government offers tax breaks to encourage manufacturers to produce more solar panels?

The price of lobster is typically lower in the summer than in the spring. Which of the following explanations for this difference is given in the textbook?

The phrase "demand has increased" means that

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 there is a surplus of motorcycles how will the equilibrium point change?

For each of the following pairs of products state which are complements,which are substitutes,and which are unrelated. a.Swim fins and scuba tanks b.Coca Cola and Volkswagens c.Printers and ink cartridges d.Ice and ice chests e.Heineken and Corona

If the demand for letters written by Abraham Lincoln is higher than the demand for letters written by John Wilkes Booth,what would have to be true for the market equilibrium prices for these letters to be equal?

If the United States lifted the embargo on Cuban products,what would happen in the U.S.market for Cuban cigars?

If the price of gasoline increases,what will be the impact in the market for public transportation?

A decrease in the demand for eggs due to changes in consumer tastes,accompanied by a decrease in the supply of eggs as a result of an outbreak of Avian flu,will result in

If a decrease in income leads to an increase in the demand for macaroni,then macaroni is