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

Explain the difference between a normal good and an inferior good.

If the price of grapefruit rises,the substitution effect due to the price change will cause

If the Apple iPhone and the Samsung Galaxy are considered substitutes,then,other things being equal,an increase in the price of the iPhone will

An increase in the price of pineapples will result in

Figure 3-2 -Refer to Figure 3-2.A decrease in the expected future price of the product would be represented by a movement from

As the number of firms in a market increases,the supply curve will shift to the right and the equilibrium quantity will rise.

Which of the following would cause an increase in the supply of peanut butter?

The substitution effect explains why there is a direct relationship between the price of a product and the quantity of the product demanded.

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D₁ and S₂ (pointB) If there is a decrease in the price of fertiliser used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change?

A decrease in the demand for incandescent light bulbs due to changes in consumer tastes,accompanied by a decrease in the supply of incandescent light bulbs as a result of government restrictions,will result in

Figure 3-3 -Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for original Picasso paintings and the market for designer jeans.Which graph most likely represents which market?

What is the difference between an 'increase in supply' and an 'increase in quantity supplied'?

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

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.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.

Technological advancements have led to lower prices and an increase in the sale of digital cameras.How does this affect the digital photo printing paper market?

Figure 3-5 -Refer to Figure 3-5.At a price of $15,

Tomas increased his consumption of potato chips when the price of pistachios increased.For Tomas,potato chips and pistachios are

Figure 3-6 Canvas Tote Bags -Refer to Figure 3-6.The figure above represents the market for canvas tote bags.Assume that the price of tote bags is $15.At this price,

In October,market analysts predict that the price of platinum will fall in November.What happens in the platinum market in October,holding everything else constant?

Figure 3-4 -Refer to Figure 3-4.If the price is $10,