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

Assume that in recent years the cost of producing microbrew beer in the U.S.has decreased largely due to technological improvements.At the same time,more and more Americans prefer microbrew beer over wine.Which of the following best explains the effect of these events in the microbrew beer market?

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

Electric car manufacturers want to sell more electric cars at a higher price.Which of the following events would have this effect?

Which of the following is evidence of a shortage of chocolate?

Farmers can raise either goats or ostriches on their land.Which of the following would cause the supply of goats to decrease?

Studies have shown that smoking cigarettes can cause heart disease.Assume this is true,and favorable weather has increased the tobacco harvest in North Carolina.In the market for cigarettes,these two developments would

An increase in the equilibrium price for a product will result

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

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left,equilibrium price and equilibrium quantity will both increase.

An increase in population results in an increase in demand.

The income effect explains why there is a direct relationship between the price of a product and the quantity of the product demanded.

What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery?

The income effect of a price change results in a

If,in response to an increase in the price of pineapples,the quantity demanded of pineapples decreases,economists would describe this as

Explain the Law of Demand.

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

Suppose that when the price of oranges decreases,the Sarita decreases her purchases of peaches.To Sarita,

What is the difference between a "change in demand" and a "change in quantity demanded"?

A demand curve shows the relationship between

An increase in the price of MP3 players will result in