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

If the demand for letters written by Abraham Lincoln is higher than the demand for letters written by John Wilkes Booth,what would have to be true for the market equilibrium prices for these letters to be equal?

Which of the following statements is true?

A normal good is a good for which the demanded decreases as income decreases,holding everything else constant.

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 in the market for apples the supply has decreased then

In much of Europe,the legal age to obtain a driver's license is 18.If the legal driving age in the United States was changed to 18,how would this affect the market for new automobiles? The market for automobile insurance?

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

"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 substitution effect of a price change refers to

Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right,but the supply curve shifts more than the demand curve.As a result

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?

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

A decrease in input costs in the production of LCD televisions caused the price of LCD televisions to decrease.Holding everything else constant,how would this affect the market for video game consoles (a complement to LCD televisions)?

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 falls from $4 to $2,the market quantity demanded would

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?

Peanut butter and jelly are complements.If the price of peanut butter increases,the demand for jelly will increase.

In most countries in South America,the legal driving age is 18.If the legal driving age in the United States was raised from 16 to 18,how would this affect the market for new and used automobiles? What would happen to the equilibrium price and quantity of new and used automobiles?

Figure 3-5 -Refer to Figure 3-5.At a price of $20,the quantity sold

Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right,but the supply curve shifts less than the demand curve.As a result

If the population increases and input prices increase,the equilibrium price of a product will definitely increase.