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

"Because Coke and Pepsi are substitutes,a decrease in the price of Pepsi will cause the demand for Coke to decrease.This initial shift in demand for Coke results in a lower price for Coke; this lower price will cause the demand curve for Coke to shift to the left." Which of the following correctly comments on this statement?

The income effect of a price change results in a

In September,buyers of silver expect that the price of silver will rise in October.What happens in the silver market in September,holding all else constant?

Select the phrase that correctly completes the following statement."A decrease in the number of manufacturers caused a decrease in the supply of sailboats.As a result.________."

The phrase "demand has increased" means that

Which of the following would shift the supply curve for energy drinks to the left?

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for coffee grinders.Compare the conditions in the market when the price is $15 and when the price is $21.Which of the following describes how the market differs at these prices?

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for solar panels if the government offers tax breaks to encourage manufacturers to produce more solar panels?

If pilots and flight attendants agree to wage and benefit reductions in the wake of the financial difficulties in the airline industry,what impact would this have on the supply and demand in the market for airline service,assuming no other changes take place in this market?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for laptop computers.Which panel best describes what happens in this market when the price of computer hard drives falls?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for tuna.Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen?

A ________ demand curve for shampoo would be caused by a change in the price of shampoo.

A decrease in the demand for eggs due to changes in consumer tastes,accompanied by a decrease in the supply of eggs as a result of an outbreak of Avian flu,will result in

The price of lobster is typically lower in the summer than in the spring.Which of the following explanations for this difference is given in the textbook?

________ means the supply curve has shifted to the right,while ________ refers to a movement along a given supply curve in response to an increase in price.

Cole was discussing the market for cocoa beans with his friend John Schmidt.Cole said,"Ever since Venezuela announced that its cocoa harvest was its lowest ever in fifteen years,the price of cocoa beans has been rising and rising and people are buying more and more.I think the demand for cocoa beans must be upward sloping." Is Cole right? Briefly explain why or why not.

A firm has an incentive to decrease supply now and increase supply in the future if it expects that

For each of the following pairs of products state which are complements,which are substitutes,and which are unrelated. a.Swim fins and scuba tanks b.Coca Cola and Volkswagens c.Printers and ink cartridges d.Ice and ice chests e.Heineken and Corona

If the demand for a product decreases and the supply of the product does not change,equilibrium price and equilibrium quantity will both increase.

If,in response to a decrease in the price of coffee,the quantity demanded of coffee increases,economists would describe this as