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

In recent years,the consumption of orange juice in the United States has fallen but the price of orange juice has risen.This is because the supply of orange juice has ________ and the demand for orange juice has ________.

The substitution effect explains why there is an inverse relationship between the price of a product and the quantity of the product demanded.

Tomas increased his consumption of potato chips when the price of pistachios increased.For Tomas,potato chips and pistachios are

If the price of beef jerky rises,then 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?

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

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.At a price of $4,the quantity demanded in the market would be

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?

Figure 3-1 -Refer to Figure 3-1.A decrease in the price of a complementary good would be represented by a movement from

An increase in the demand for peanuts due to changes in consumer tastes,accompanied by an increase in the supply of peanuts as a result of favorable growing conditions,will result in

Which of the following would cause both the equilibrium price and equilibrium quantity of oysters (assume that oysters are a normal good)to decrease?

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 S₂ (point B) Assume that Motorcycles are a normal good. If there is an increase in number of companies producing motorcycles and a decrease in income (assume motorcycles are a normal good), the equilibrium could move to which point?

At a product's equilibrium price

"Because Coke and Pepsi are substitutes,a decrease in the price of Pepsi will cause the demand for Coke to decrease.This initial shift in demand for Coke results in a lower price for Coke; this lower price will cause the demand curve for Coke to shift to the left." Which of the following correctly comments on this statement?

If in the market for oranges the supply has increased,then

If the demand for a product decreases and the supply of the same product decreases,the equilibrium price will decrease.

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 more than the demand curve.As a result

Figure 3-5 -Refer to Figure 3-5.At a price of $15

Which of the following will not shift the demand curve for a good?

Electric car enthusiasts want to buy more electric cars at a lower price.All of the following events would have this effect except