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

Costs that have already been incurred,and which cannot be recovered,are known as

The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in purchasing power as a result of the price change.

One possible reason as to why consumers respond to sales is that by displaying a 'high' regular price and a 'low' sale price,sales provide consumers with a reference point to interpret the prices being offered.

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

A decrease in quantity supplied is represented by a leftward shift of the supply curve.

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

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant,how would this affect the market for Blu-ray players (a complement to LCD televisions)?

Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases.

If an increase in income leads to an increase in the demand for peanut butter,then peanut butter is

Figure 3-5 -Refer to Figure 3-5.At a price of $5,the quantity sold

The observation that people tend to value something more highly when they own it than when they don't is called the

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

Which of the following is not a common mistake made by consumers?

Arnold Kim began blogging about Apple products during his fourth year of medical school.Kim's website,MacRumors.com,became so successful that he decided to give up his medical career and work full time on his website,despite the nearly $200 000 he had invested in his education.In making his decision,the $200 000 he spent on his education

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.

Orange juice drinkers want to consume more orange juice at a lower price.Which of the following events would have this effect?

Suppose that when the price of strawberries decreases,Simone increases her purchases of whipped cream.To Simone

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 more than the demand curve.As a result,

Market equilibrium occurs where supply equals demand.

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