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

-Refer to Figure 3-2. An increase in price of inputs would be represented by a movement from

When the price of a good falls, consumers buy a larger quantity because of the ________ effect and the ________ effect.

If a decrease in income leads to an increase in the demand for sardines, then sardines are

By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis, economists assume that the most important determinant of the demand for a good is the ________ of the good.

Select the phrase that correctly completes the following statement. 'An increase in input prices caused a decrease in the supply of baseballs. As a result, ________.'

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?

What are the five variables that will shift the demand curve?

Last year, the Pottery Palace supplied 8000 ceramic pots at $40 each. This year, the company supplied the same quantity of ceramic pots at $55 each. Based on this evidence, The Pottery Palace has experienced

If in the market for peaches, the supply curve has shifted to the left

-Refer to Figure 3-2. An increase in the price of substitutes in production would be represented by a movement from

Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₁ and S₁ (point A. If there is a shortage of apples how will the equilibrium point change?

In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is an inferior good. a. The population increases and productivity increases. b. The income increases and the price of inputs decrease. c. The number of firms in the market decreases and income increases. d. Consumer preference increases and the price of a complement decreases. e. The price of a substitute in consumption decreases and the price of a substitute in production decreases.

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

-Refer to Figure 3-4. At a price of $15, how many units will be sold?

Which of the following would cause both the equilibrium price and equilibrium quantity of potatoes (assume that potatoes are an inferior good) to decrease?

An increase in the price of pineapples will result in

Olive oil producers want to sell more olive oil at a higher price. Which of the following events would have this effect?

All else equal, as the price of a product falls, the quantity supplied increases.

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

What would happen in the market for laser eye surgery if insurance companies started to cover a portion of the price of voluntary procedures?