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

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for laptop computers.Which panel best describes what happens in this market when the price of computer hard drives falls?

If virtual reality headsets are considered substitutes for game consoles,then a decline in the price of game consoles would,all else equal

The ________ effect refers to the change in quantity demanded for a good that results from the effect of a change in the good's price on consumer's purchasing power.

Which of the following generation categories has the largest population in the United States in 2017?

An increase in the price of off-road vehicles will result in

A supply curve

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.a decrease in income and the good is a normal good b.a decrease in income and the good is an inferior good c.an increase in the price of a substitute good d.an increase in the price of a complementary good e.a decrease in the taste for the good f.an increase in population g.a decrease in the expected future price of the good

If the price of refillable butane lighters was to decrease,then

Holding everything else constant,a decrease in the price of bicycles will result in

Even when the demand for one good is high,the price of the good is also affected by supply.The textbook illustrates this by comparing the price of two items that were auctioned on the same day.Which of the following describes the results of the auction?

What is a surplus? What is a shortage?

Use the following supply schedule for cherries to draw a graph of the supply curve.Be sure to label the supply curve and each axis,and show each point on the supply curve. Price (dollars per bushel) Quantity (thousands of bushels) 8 50 16 100 24 150 32 200 40 250

What is the difference between a market equilibrium and a competitive market equilibrium?

In 1984,the National Minimum Drinking Age Act was passed,raising the legal age to consume alcoholic beverages in the United States to 21.In much of Europe,the legal age to consume alcohol is 18.If the legal drinking age in the United States was changed back to 18,how would this affect the market for alcoholic beverages? What would happen to the equilibrium price and quantity of alcoholic beverages?

Let D= demand,S = supply,P = equilibrium price,and Q= equilibrium quantity.What happens in the market for walnuts if the Centers for Disease Control and Prevention announces that consuming a half cup of walnuts each week helps to lower levels of bad cholesterol?

The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product.

Assume that airline tickets are a normal good.Prices of commercial airline tickets have fallen in recent months.Over this same period,the price of jet fuel has risen and consumer incomes have fallen.Which of the following best explains the falling prices of airline tickets?

Figure 3-5 -Refer to Figure 3-5.At a price of $20

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

Assume that both the demand curve and the supply curve for DVD players shift to the left but the supply curve shifts more than the demand curve.As a result