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

Figure 3-1 -Refer to Figure 3-1.If the product represented is an inferior good,an increase in income would be represented by a movement from

If the price of propane-fueled gas grills was to decrease,then

Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln.Which of the following events would cause the price differences in these letters to get smaller?

If in the market for bananas the supply curve has shifted to the right,then

Draw a supply and demand graph showing an equilibrium price of $50 and an equilibrium quantity of 200 units.Explain what would happen if the selling price was $75,and illustrate this on the graph.Explain what would happen if the selling price was $25,and illustrate this on the graph.Be sure to label each axis and curve on the graph.

Use the following demand schedule for cherries to draw a graph of the demand curve.Be sure to label the demand curve and each axis,and show each point on the demand curve. Price (dollars per bushel) Quantity (thousands of bushels) 60 40 50 80 40 120 30 160 20 200

What is the law of supply? What does this law imply about the shape of the supply curve?

According to a recent study,"Stricter college alcohol policies,such as raising the price of alcohol,or banning alcohol on campus,decrease the number of students who use marijuana." On the basis of this information,how would you describe alcohol and marijuana?

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

Cole was discussing the market for cocoa beans with his friend John Schmidt.Cole said,"Ever since Venezuela announced that its cocoa harvest was its lowest ever in fifteen years,the price of cocoa beans has been rising and rising and people are buying more and more.I think the demand for cocoa beans must be upward sloping." Is Cole right? Briefly explain why or why not.

A change in which variable will change the market demand for a product?

In recent years,the cost of producing organic produce in the United States has decreased largely due technological advancement.At the same time,more and more Americans prefer organic produce over conventional produce.Which of the following best explains the effect of these events in the organic produce market?

If the sales of carbonated sodas continue to decline as more cities impose soda taxes on these beverages,this will likely

The law of demand implies,holding everything else constant,that as the price of yogurt

In January,buyers of gold expect that the price of gold will rise in February.What happens in the gold market in January,holding all else constant?

Several studies have shown promising links between green tea consumption and cancer prevention.How does this affect the market for green tea?

Discuss the correct and incorrect economic analysis in the following statement. "The United Auto Workers Union has successfully negotiated a 9 percent increase in wages for its workers.This increase in the wage rate causes an increase in demand for automobiles,since many consumers now have greater incomes,and also a decrease in the supply of automobiles because the cost of production has increased.These effects cancel each other out resulting in no change in equilibrium price and quantity in the automobile market."

It is possible for a market for a good to experience a surplus and a shortage at the same time.

Assume that cotton is a normal good.Which of the following would cause both the equilibrium price and equilibrium quantity of cotton to increase?

How does the decreasing use of traditional cameras affect the market for traditional camera film?