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

The income effect of a price change results in a

A decrease in supply is caused by a decrease in the price of the product.

Which of the following would cause a decrease in the supply of peanut butter?

Figure 3-4 -Refer to Figure 3-4.At a price of $20,how many units will be supplied?

Farmers can raise either goats or ostriches on their land.Which of the following would cause the supply of goats to decrease?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements.What panel describes what happens in this market when the price of bratwurst falls?

Discuss the correct and incorrect economic analysis in the following statements. "If a disease kills a large number of turkeys,the supply of turkeys will decrease.This will result in a price increase,which will then cause the supply of turkeys to increase."

The cost of producing cigarettes in the United States has increased and at the same time,more and more Americans are choosing to not smoke cigarettes.Which of the following best explains the effect of these events in the cigarette market?

In most countries in South America,the legal driving age is 18.If the legal driving age in the United States was raised from 16 to 18,how would this affect the market for new and used automobiles? What would happen to the equilibrium price and quantity of new and used automobiles?

If a decrease in income leads to a decrease in the demand for ice cream,then ice cream is

If more insurance companies decide to cover part of the price of voluntary laser eye surgery and more doctors decide to enter the field of laser eye surgery,what will happen in the market for laser eye surgery as a result of these two factors?

Suppose that McDonald's successfully implements self-serve kiosks in their restaurants,and this investment in technology allows the company to reduce the number of employees at each location.All else equal,this technological improvement would ________ the equilibrium price for its products and ________ the equilibrium quantity consumed.

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left,but the supply curve shifts less than the demand curve.As a result

A surplus occurs when the market price is lower than the equilibrium price.

Technological advancements have led to lower prices and an increase in the sale of digital cameras.How does this affect the digital photo printing paper market?

Electric car manufacturers want to sell more electric cars at a higher price.Which of the following events would have this effect?

Due to wildfires in Northern California,agricultural experts predict a 30 percent decline in this year's grape harvest.What happens in the California wine market as a result of this announcement?

Figure 3-1 -Refer to Figure 3-1.An increase in population would be represented by a movement from

In June,buyers of titanium expect that the price of titanium will fall in July.What happens in the titanium market in June,holding everything else constant?

Suppose that when the price of oranges decreases,Sarita decreases her purchases of peaches.To Sarita,