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

If the demand for a product increases and the supply of the product does not change, equilibrium price and equilibrium quantity will both increase.

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

Assume that the hourly price for the services of tarot card readers has risen and sales of these services have also risen. One can conclude that

-Refer to Figure 3-6. The figure above represents the market for canvas tote bags. Compare the conditions in the market when the price is $50 and when the price is $35. Which of the following describes how the market differs at these prices?

Ranchers can raise either cattle or sheep on their land. Which of the following would cause the supply of sheep to increase?

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

In response to a surplus, the market price of a good will fall; as the price falls, the quantity demanded will increase and quantity supplied will decrease until equilibrium is reached.

Market equilibrium occurs where supply equals demand.

A positive technological change will cause the supply of a good to increase.

A shortage is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded.

A change in supply is represented by a shift of the supply curve.

If a decrease in income leads to in a decrease in the demand for mac and cheese, then mac and cheese is

Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₂ and S₂ (point

Studies have shown links between calcium consumption and a reduction in osteoporosis. How does this affect the market for calcium?

-Refer to Figure 3-4. At a price of $10, how many units will be sold?

-Refer to Figure 3-2. An increase in the number of firms in the market would be represented by a movement from

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

A change in all of the following variables will change the market demand for a product except

The market for smart phones has grown rapidly over the past few years, due in part to the overwhelming success of the Apple iPhone. Following the successful launch of the iPhone in 2007, companies such as Samsung, HTC, and LG have all introduced products to compete with the iPhone. The smart phones introduced to compete with the iPhone would be considered

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