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

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)?

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?

The supply curve for umbrellas

Technological advancements have led to lower prices and an increase in the sale of color laser printers.How does this affect the market for traditional inkjet printers?

Table 3-2 -Refer to Table 3-2.The table above shows the demand schedules for cashews of two individuals (Jordy and Amy)and the rest of the market.If the price of cashews rises from $4 to $6,the market quantity demanded would

Figure 3-4 -Refer to Figure 3-4.If the current market price is $25,the market will achieve equilibrium by

An inferior good is a good for which the quantity demanded increases as the price decreases,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 blu-ray discs.Which panel best describes what happens in this market if there is a substantial increase in the price of blu-ray players?

All else equal,the desired increase in the supply of smart phones for Google would cause the equilibrium price of the smart phones to ________ and the equilibrium quantity of the smart phones to ________.

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 S₂ (point B).If there is an increase in number of companies producing motorcycles and a decrease in income (assume motorcycles are a normal good),the equilibrium could move to which point?

A supply curve

Figure 3-2 -Refer to Figure 3-2.An increase in the price of the product would be represented by a movement from

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

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 D₂ and S₁ (point C).Which of the following changes would cause the equilibrium to change to point B?

If consumers believe the price of tablet computers will increase in the future,this will cause the demand for tablet computers to decrease now.

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

Prices of smartphones (assume that this is a normal good)have fallen in recent years.Over this same period,the price of the components used to produce smartphones has also fallen and consumer incomes have risen.Which of the following best explains the falling prices of smartphones?

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

What is a surplus? What is a shortage?

Which of the following would cause the equilibrium price of ketchup to increase and the equilibrium quantity of ketchup to decrease?