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

Figure 3.1 Alt text for Figure 3.1: In figure 3.1, graph of the effect of an increase in population on the demand curve. Long description for Figure 3.1: The x-axis is labelled, Quantity, and y-axis is labelled, Price.Curve Demand, D1, is a straight line which slopes down from the top left corner to the bottom right corner.Curve D2 follows the same slope as curve D1, but is plotted to the right.2 points, A and B, are plotted in the middle of curve D1.A right pointing arrow indicates the change from curve D1 to curve D2. -Refer to Figure 3.1. An increase in population would be represented by a movement from

At market equilibrium,

If the demand for Sidney Crosby hockey cards is greater than the demand for Jacques Plante hockey cards, what would have to be true for the market equilibrium prices for these hockey cards to be equal?

At a product's equilibrium price,

An increase in the quantity of a product supplied is caused by an increase in the price of the product.

An increase in quantity supplied is represented by a rightward shift of the supply curve.

Figure 3.13 Alt text for Figure 3.13a: In figure 3.13a, a graph of intersecting demand and supply curves represents a rising supply of bicycle helmets. Long description for Figure 3.13a: The x-axis is labelled, Quantity and the y-axis is labelled, as Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve S1 is a straight line which slopes up from the bottom left to the top right.The point of intersection is at the midpoints of both lines.Curve S2 is a straight line, parallel to curve S1, but plotted to the right.A right pointing arrow indicates the change from S1 to S2. Alt text for Figure 3.13b: In figure 3.13b, a graph of intersecting demand and supply curves represents a falling supply of bicycle helmets. Long description for Figure 3.13b: The x-axis is labelled, Quantity and the y-axis is labelled, as Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve S1 is a straight line which slopes up from the bottom left to the top right.The point of intersection is at the midpoints of both lines.Curve S2 is a straight line, parallel to curve S1, but plotted to the left.A left pointing arrow indicates the change from S1 to S2. Alt text for Figure 3.13c: In figure 3.13c, a graph of intersecting demand and supply curves represents a rising demand for bicycle helmets. Long description for Figure 3.13c: The x-axis is labelled, Quantity and the y-axis is labelled, as Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve S1 is a straight line which slopes up from the bottom left to the top right.The point of intersection is at the midpoints of both lines.Curve D2 is a straight line, parallel to curve D1, but plotted to the right.A right pointing arrow indicates the change from D1 to D2. Alt text for Figure 3.13d: In figure 3.13d, a graph of intersecting demand and supply curves represents a falling demand for bicycle helmets. Long description for Figure 3.13d: The x-axis is labelled, Quantity and the y-axis is labelled, as Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve S1 is a straight line which slopes up from the bottom left to the top right.The point of intersection is at the midpoints of both lines.Curve D2 is a straight line, parallel to curve D1, but plotted to the left.A left pointing arrow indicates the change from D1 to D2. -Refer to Figure 3.13.Assume that the graphs in this figure represent the demand and supply curves for almonds.Which panel best describes what happens in this market when there is an increase in the productivity of almond harvesters?

The price of lobster is typically lower in the summer than in the spring.Which of the following explanations for this difference is given in the textbook?

Figure 3.15 Alt text for Figure 3.15a: In figure 3.15a, a graph of intersecting demand and supply curves represents a rising supply of Blu-ray disc players. Long description for Figure 3.15a: The x-axis is labelled, Quantity and the y-axis is labelled, as Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve S1 is a straight line which slopes up from the bottom left to the top right.The point of intersection is at the midpoints of both lines.Curve S2 is a straight line, parallel to curve S1, but plotted to the right.A right pointing arrow indicates the change from S1 to S2. Alt text for Figure 3.15b: In figure 3.15b, a graph of intersecting demand and supply curves represents a falling supply of Blu-ray players. Long description for Figure 3.15b: The x-axis is labelled, Quantity and the y-axis is labelled, as Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve S1 is a straight line which slopes up from the bottom left to the top right.The point of intersection is at the midpoints of both lines.Curve S2 is a straight line, parallel to curve S1, but plotted to the left.A left pointing arrow indicates the change from S1 to S2. Alt text for Figure 3.15c: In figure 3.15c, a graph of intersecting demand and supply curves represents a rising demand for Blu-ray players. Long description for Figure 3.15c: The x-axis is labelled, Quantity and the y-axis is labelled, as Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve S1 is a straight line which slopes up from the bottom left to the top right.The point of intersection is at the midpoints of both lines.Curve D2 is a straight line, parallel to curve D1, but plotted to the right.A right pointing arrow indicates the change from D1 to D2. Alt text for Figure 3.15d: In figure 3.15d, a graph of intersecting demand and supply curves represents a falling demand for Blu-ray disc players. Long description for Figure 3.15d: The x-axis is labelled, Quantity and the y-axis is labelled, as Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve S1 is a straight line which slopes up from the bottom left to the top right.The point of intersection is at the midpoints of both lines.Curve D2 is a straight line, parallel to curve D1, but plotted to the left.A left pointing arrow indicates the change from D1 to D2. -Refer to Figure 3.15.Assume that the graphs in this figure represent the demand and supply curves for blu-ray discs.Which panel best describes what happens in this market if there is a substantial increase in the price of blu-ray players?

If the price of automobiles was to increase, then

If a firm expects that the price of its product will be lower in the future than it is today,

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

During the 1990s, positive technological change in the production of chicken caused the price of chicken to fall.Holding everything else constant, how would this affect the market for pork (a substitute for chicken)?

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

Consider the collectors' market for first editions of two popular children's books, Harry Potter and the Order of the Phoenix by J.K.Rowling and Ruby in the Smoke by Philip Pullman.Sales of the Harry Potter novel are much greater than sales of Ruby in the Smoke, yet the price of the Harry Potter novel is much lower than the price of Pullman's novel. a.On one large diagram, draw a demand and supply graph for first editions of Harry Potter and the Order of the Phoenix and another demand and supply graph for first editions of Ruby in the Smoke. b.Show how it is possible for the price of the Harry Potter novel to be much lower than the price of Pullman's novel, even though the demand for the Harry Potter novel is much greater than the demand for Ruby in the Smoke. c.Provide a written explanation to accompany your graphical illustration.

Table 3.4 -Refer to Table 3.4.The table contains information about the sorghum market.Use the table to answer the following questions. a. What are the equilibrium price and quantity of sorghum? b.Suppose the prevailing price is $6 per bushel.Is there a shortage or a surplus in the market? c.What is the quantity of the shortage or surplus? d.How many bushels will be sold if the market price is $6 per bushel? e.If the market price is $6 per bushel, what must happen to restore equilibrium in the market? f.At what price will suppliers be able to sell 36,000 bushels of sorghum? g.Suppose the market price is $14 per bushel.Is there a shortage or a surplus in the market? h.What is the quantity of the above shortage or surplus? i.How many bushels will be sold if the market price is $14 per bushel? j.If the market price is $14 per bushel, what must happen to restore equilibrium in the market?

One would speak of a change in the quantity of a good supplied, rather than a change in supply, if

Buyers scrambled to secure stocks of Australian wool following a forecasted 11 percent decline in wool production.What will happen in the Australian wool market as a result of this announcement?

A demand curve shows the relationship between

Figure 3.15 Alt text for Figure 3.15a: In figure 3.15a, a graph of intersecting demand and supply curves represents a rising supply of Blu-ray disc players. Long description for Figure 3.15a: The x-axis is labelled, Quantity and the y-axis is labelled, as Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve S1 is a straight line which slopes up from the bottom left to the top right.The point of intersection is at the midpoints of both lines.Curve S2 is a straight line, parallel to curve S1, but plotted to the right.A right pointing arrow indicates the change from S1 to S2. Alt text for Figure 3.15b: In figure 3.15b, a graph of intersecting demand and supply curves represents a falling supply of Blu-ray players. Long description for Figure 3.15b: The x-axis is labelled, Quantity and the y-axis is labelled, as Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve S1 is a straight line which slopes up from the bottom left to the top right.The point of intersection is at the midpoints of both lines.Curve S2 is a straight line, parallel to curve S1, but plotted to the left.A left pointing arrow indicates the change from S1 to S2. Alt text for Figure 3.15c: In figure 3.15c, a graph of intersecting demand and supply curves represents a rising demand for Blu-ray players. Long description for Figure 3.15c: The x-axis is labelled, Quantity and the y-axis is labelled, as Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve S1 is a straight line which slopes up from the bottom left to the top right.The point of intersection is at the midpoints of both lines.Curve D2 is a straight line, parallel to curve D1, but plotted to the right.A right pointing arrow indicates the change from D1 to D2. Alt text for Figure 3.15d: In figure 3.15d, a graph of intersecting demand and supply curves represents a falling demand for Blu-ray disc players. Long description for Figure 3.15d: The x-axis is labelled, Quantity and the y-axis is labelled, as Price.Curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve S1 is a straight line which slopes up from the bottom left to the top right.The point of intersection is at the midpoints of both lines.Curve D2 is a straight line, parallel to curve D1, but plotted to the left.A left pointing arrow indicates the change from D1 to D2. -Refer to Figure 3.15.Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements.Which panel describes what happens in this market when the price of bratwurst falls?