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

Figure 3-1 -Refer to Figure 3-1.An increase in the expected future price of the product would be represented by a movement from

If the price of a product is above equilibrium,what forces it down?

For each of the following pairs of products,state which are complements,which are substitutes and which are unrelated. a.Blu-ray discs and video-on-demand b.Fiat 500 and Mini Cooper S c.Toothpaste and toothbrush d.Popcorn and snowboards e.Razors and razor blades

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.

Why do many film processing companies have a policy of printing every picture on a roll of film or a memory card,even if the picture is very fuzzy and customers are allowed to ask for refunds on any pictures they do not like?

An inferior good is a good for which the quantity demanded decreases as the price increases,holding everything else constant.

Which of the following would shift the supply curve for MP3 players to the left?

What is the ceteris paribus condition?

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

One reason university students do not study enough to get high grades is that they are unrealistic about their future behaviour.

Which of the following is evidence of a shortage of walnuts?

Figure 3-7 -Refer to Figure 3-7.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?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for women's clothing.Which panel best describes what happens in this market when the wages of seamstresses rise?

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

If consumers believe the price of LCD televisions will decrease in the future,this will cause the demand for LCD televisions to increase now.

Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?

Explain the endowment effect.

If the number of firms producing mouthwash increases and consumer preference for mouthwash increases,the equilibrium price of mouthwash will definitely increase.

An increase in the price of inputs will cause the supply curve for a product to shift to the right.

A common mistake made by consumers is the failure to take into account the monetary costs of their actions.