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

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

Which of the following is evidence of a shortage of chocolate?

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

"Because apples and oranges are substitutes,an increase in the price of oranges will cause the demand for apples to increase.This initial shift in demand for apples results in a higher price for apples; this higher price will cause the demand curve for apples to shift to the right." Which of the following correctly comments on this statement?

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

Which of the following statements is true?

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

If the number of firms producing electric cars increases and consumer preference for electric cars increases,the equilibrium quantity of electric cars will definitely increase.

Technological advancements have led to lower prices and an increase in the sale of color laser printers.How does this affect the market for laser printer ink cartridges?

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?

By drawing a demand curve with price on the vertical axis and quantity on the horizontal axis,economists assume that the most important determinant of the demand for a good is

In 2004,hurricanes destroyed a large portion of Florida's orange and grapefruit crops.In the market for citrus fruit in 2004

At market equilibrium

Farmers can plant either corn or soybeans in their fields.Which of the following would cause the supply of soybeans to increase?

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for canvas tote bags.Assume that the market price is $35.Which of the following statements is true?

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

Danielle Ocean pays for monthly pool maintenance for her home swimming pool.Last week,the owner of the pool service informed Danielle that he will have to raise his monthly service fee because of increases in the price of pool chemicals.How is the market for pool maintenance services affected by this?

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

If a decrease in income leads to a decrease in the demand for mac and cheese,then mac and cheese is

In recent years the cost of producing wines in the U.S.has increased largely due to rising rents for vineyards.At the same time,more and more Americans prefer wine over beer.Which of the following best explains the effect of these events in the wine market?