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

In January,buyers of gold expect that the price of gold will fall in February.What happens in the gold market in January,holding everything else constant?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for coffee.What happens in this market if buyers expect the price of coffee to rise?

Even when the demand for one good is high,the price of the good is also affected by supply.The textbook illustrates this by comparing the price of two items that were auctioned on the same day.Which of the following describes the results of the auction?

If consumers view tablet computers as good replacements for ________ demand will most likely be greater than if consumers view tablet computers as good replacements for ________.

Hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the Gulf coast states.In the market for gasoline,

During the 1990s positive technological change in the production of chicken caused the price of chicken to fall.Holding everything else constant,how would this affect the market for pork (a substitute for chicken)?

If in the market for apples the supply has decreased then

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for coffee grinders.Assume that the market price is $21.Which of the following statement is true?

Table 3-2 -Refer to Table 3-2.The table contains information about the sorghum market.Use the table to answer the following questions. a.What are the equilibrium price and quantity of sorghum? b.Suppose the prevailing price is $6 per bushel.Is there a shortage or a surplus in the market? c.What is the quantity of the shortage or surplus? d.How many bushels will be sold if the market price is $6 per bushel? e.If the market price is $6 per bushel,what must happen to restore equilibrium in the market? f.At what price will suppliers be able to sell 36,000 bushels of sorghum? g.Suppose the market price is $14 per bushel.Is there a shortage or a surplus in the market? h.What is the quantity of the shortage or surplus? i.How many bushels will be sold if the market price is $14 per bushel? j.If the market price is $14 per bushel,what must happen to restore equilibrium in the market?

Which of the following will not shift the demand curve for a good?

Shrimp is an increasingly popular part of the American diet.Louisiana shrimpers who represent the bulk of the U.S.industry were almost all put out of business by Hurricane Katrina.How did this affect the equilibrium price and quantity of shrimp?

Discuss the correct and incorrect economic analysis in the following statements. "If a disease kills a large number of turkeys,the supply of turkeys will decrease.This will result in a price increase,which will then cause the supply of turkeys to increase."

Which of the following would cause an increase in the equilibrium price and decrease in the equilibrium quantity of watermelon?

Indicate whether each of the following situations would shift the supply curve to the left,to the right,or not at all. a.An increase in the price of an input b.An increase in productivity c.An increase in the price of a substitute in production d.A decrease in the expected future price of a product e.A decrease in the current price of the product

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for coffee grinders.Assume that the price of tote bags is $50.At this price:

If the population increases and input prices increase,the equilibrium price of a product will definitely increase.

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt.Which panel describes what happens in the market for frozen yogurt when the price of ice cream,a substitute product,increases?

Digital video recorders (DVRs)were introduced to the market in 1999,and new technology has allowed for the cost of manufacturing the recorders to decline significantly since the initial introduction.How did this change in technology affect the market for DVRs?

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

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