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

Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen.One can conclude that

Figure 3-4 -Refer to Figure 3-4.At a price of $25,how many units will be sold?

Explain the Law of Demand.

Figure 3-3 -Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for original Michelangelo sculptures and the market for Ray Ban sunglasses.Which graph most likely represents which market?

If a decrease in income leads to in a decrease in the demand for ice cream,then ice cream is

The law of demand implies,holding everything else constant,that as the price of yogurt

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A).If the price of motorcycle engines increases,and the wages of motorcycle workers increase,how will the equilibrium point change?

If the United States lifted the embargo on Cuban products,what would happen in the U.S.market for Cuban cigars?

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

Which of the following would cause both the equilibrium price and equilibrium quantity of barley (assume that barley is an inferior good)to increase?

When Toyota introduced its 2010 Prius,it announced that the average retail price of the 2010 model would be lower than the average retail price was for the equivalent 2009 model.Which of the following would explain the price differential?

Hurricane Katrina damaged a large portion of refining and pipeline capacity when it swept through the Gulf coast states in August 2005.As a result of this,many gasoline distributors were not able to maintain normal deliveries.At the pre-hurricane equilibrium price (i.e.,at the initial equilibrium price),we would expect to see

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 decreases and productivity increases b.The income increases and the price of inputs increase c.The number of firms in the market decreases and income decreases d.Consumer preference decreases and the price of a complement increases e.The price of a substitute in consumption increases and the price of a substitute in production increases

Several studies have shown promising links between green tea consumption and cancer prevention.How does this affect the market for green tea?

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.At a price of $6,the quantity demanded in the market would be

George Gnat subscribes to a monthly pest control service for his home.Last week the owner of the service informed George that he will have to raise his monthly service fee because of increases in the price of gasoline used by his workers on their service trips.How is the market for pest control services affected by this?

The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a substitute product.

During the recession of 2007-2009,Subway experienced increased sales.This increase in demand for food such as a Subway sandwich indicates that Subway sandwiches are inferior goods,which in economic terms means

Suppose that when the price of hamburgers increases,the Ruiz family increases their purchases of hot dogs.To the Ruiz family,

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements.What panel describes what happens in this market when the price of bratwurst falls?