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

Table 3-1 -Refer to Table 3-1.The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi)and the rest of the market.If the price of Kona coffee rises from $4 to $5,the market quantity demanded would

Aging baby boomers are expected to have an effect on the housing market because

If the price of peaches,a substitute for plums,increases the demand for plums will decrease.

Holding everything else constant,a decrease in the price of GPS systems will result in

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

How has the growing popularity of factory outlet stores affected the market for clothing at retail department stores?

Figure 3-5 -Refer to Figure 3-5.In a free market such as that depicted above,a shortage is eliminated by

If the price of pork rinds falls,the substitution effect due to the price change will cause

According to a recent study,"Stricter college alcohol policies,such as raising the price of alcohol,or banning alcohol on campus,decrease the number of students who use marijuana." On the basis of this information,how would you describe alcohol and marijuana?

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

Factory incentives on cell phones have encouraged consumers to upgrade their phones.How does this affect the market for bluetooth headsets?

Figure 3-2 -Refer to Figure 3-2.A technological advancement would be represented by a movement from

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

If the price of gasoline increases,what will be the impact in the market for public transportation?

Assume there is a surplus in the market for hybrid automobiles.Which of the following statements correctly describes this situation?

Prices of commercial airline tickets (assume that this is a normal good)have fallen in recent months.Over this same period,the price of jet fuel has risen and consumer incomes have fallen.Which of the following best explains the falling prices of airline tickets?

The growing popularity of energy conservation has enticed large home improvement stores like Home Depot and Lowes to offer tankless water heaters.How does the fact that home improvement stores now offer these products affect the tankless water heater market?

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

In recent years the cost of producing wines in the U.S.has increased largely due to rising rents for vineyards.At the same time,more and more Americans prefer wine over beer.Which of the following best explains the effect of these events in the wine market?

The substitution effect of a price change refers to