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

What is the difference between an "increase in supply" and an "increase in quantity supplied"?

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

A(n)________ is represented by a leftward shift of the demand curve while a(n)________ is represented by a movement along a given demand curve.

If in the market for peaches the supply curve has shifted to the left

What is the ceteris paribus condition?

If,in response to an increase in the price of chocolate the quantity of chocolate demanded decreases,then economists would describe this as

If the number of firms producing mouthwash increases and consumer preference for mouthwash increases,the equilibrium price of mouthwash will definitely increase.

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?

Which of the following would cause a decrease in the supply of milk?

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

The following appeared in a Florida newspaper a week after a hurricane hit the state."Floridians are relieved that the storm produced no fatalities but homeowners face weeks,if not months,of rebuilding.Matters are made worse by the soaring prices of plywood and other building materials that always follow in a hurricane's path.Complaints of profiteering and price gouging have not deterred firms from raising their prices by over 100 percent." Which of the following offers the best explanation for the price increases referred to in the article?

If,in response to an increase in the price of pineapples,the quantity of pineapples demanded decreases,then economists would describe this as

Select the phrase that correctly completes the following statement."A decrease in the number of manufacturers caused a decrease in the supply of sailboats.As a result

The demand by all the consumers of a given good or service is the ________ for the good or service.

A decrease in the price of pork will result in

Draw a demand curve and label it D1.On the graph,illustrate an increase in demand and a decrease in demand,and label the curves D2 and D3,respectively.Starting on demand curve D₁,explain the shift that would result from each of the following events: a.an increase in income and the good is a normal good b.an increase in income and the good is an inferior good c.a decrease in the price of a substitute good d.a decrease in the price of a complementary good e.an increase in the taste for the good f.a decrease in population g.an increase in the expected future price of the good

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?

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.

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