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

For each of the following pairs of products,state which are complements,which are substitutes,and which are unrelated. a.House plants and potato chips b.Eyeglasses and contact lenses c.Motorcycles and gasoline d.Smartphones and smartphone apps e.Red wine and white wine

Chips and salsa are complements.If the price of salsa decreases,the demand for chips will increase.

If the price of smartphones was to increase,then

A decrease in the price of inputs will cause the supply curve for a product to shift to the right.

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

Figure 3-5 -Refer to Figure 3-5.At a price of $5

The Internet has created a new category in the book selling market,namely,the "barely used" book.How does the availability of barely used books affect the market for new books?

If the demand curve for a product shifts to the left and the supply curve for the product shifts to the left,the equilibrium quantity will decrease.

Suppose that when the price of pickles decreases,Teddy increases his purchase of ketchup.To Teddy,

If a union successfully negotiates for higher wages and benefits for steel workers,what impact would this have on supply and demand in the market for steel,assuming no other changes take place in this market?

Which of the following would shift the supply curve for MP3 players to the left?

The growing popularity of energy conservation has enticed large home improvement stores like Home Depot and Lowes to offer tankless water heaters.How does the fact that home improvement stores now offer these products affect the tankless water heater market?

If virtual reality headsets are considered substitutes for game consoles,an increase in the price of virtual reality headsets would,all else equal

A demand curve shows the relationship between

Using Richard Tedlow's "three phases of marketing," the premium bottled water industry is probably in

When Toyota introduced its 2010 Prius,it announced that the average retail price of the 2010 model would be lower than the average retail price was for the equivalent 2009 model.Which of the following would explain the price differential?

Table 3-1 Rest of Loose Leaf Sunil's Mia's Market Market Tea Quantity Quantity Quantity Quantity Price per lb. Demanded Demanded Demanded Demanded (dollars) (lbs) (lbs) (lbs) (lbs) \ 8 4 0 30 6 7 2 40 5 9 3 51 4 12 5 64 3 15 8 90 -Refer to Table 3-1.The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia)and the rest of the market.At a price of $5,the quantity demanded in the market would be

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 D₂ and S₁ (point C) Which of the following changes would cause the equilibrium to change to point B?

Table 3-3 Rest of Kona Coffee Luke's Ravi's Market Market Tea Quantity Quantity Quantity Quantity Price per lb. Demanded Demanded Demanded Demanded (dollars) (lbs.) (lbs.) (lbs.) (lbs.) \ 10 3 0 23 8 9 3 32 6 14 7 68 5 18 12 85 4 22 18 110 -Refer to Table 3-3.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

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