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

If the quantity demanded for a product exceeds the quantity supplied,the market price will rise until

Figure 3-2 -Refer to Figure 3-2.A decrease in the number of firms in the market would be represented by a movement from

In January,buyers of gold expect that the price of gold will fall in February.What happens in the gold market in January,holding everything else constant?

A decrease in the price of pork will result in

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

Discuss the correct and incorrect economic analysis in the following statements. "If a disease kills a large number of turkeys,the supply of turkeys will decrease.This will result in a price increase,which will then cause the supply of turkeys to increase."

Use the following demand schedule for cherries to draw a graph of the demand curve.Be sure to label the demand curve and each axis,and show each point on the demand curve.

Indicate whether each of the following situations would shift the supply curve to the left,to the right,or not at all. a.An increase in the price of an input b.An increase in productivity c.An increase in the price of a substitute in production d.A decrease in the expected future price of a product e.A decrease in the current price of the product

________ 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.

Figure 3-5 -Refer to Figure 3-5.At a price of $5,

If tablet computers are considered substitutes for e-readers,the decline in the price of e-readers would,all else equal,

Holding everything else constant,an increase in the price of raisins will result in

Figure 3-1 -Refer to Figure 3-1.If the product represented is a normal good,an increase in income would be represented by a movement from

According to the Australian Wool Innovation,severe drought conditions in Australia contributed to the lowest level of wool production in 50 years.This record low production has driven up prices sharply in Australian wool markets.Meanwhile,the price of raw cotton increased significantly for the first time in many years. a.Illustrate this observation with one demand and supply graph for the market for Australian wool and another demand and supply graph for raw cotton. b.Make sure that your graphs clearly show (1)the initial equilibrium before the decrease in the supply of Australian wool and (2)the final equilibrium. c.Use arrows to indicate any shifts in the demand and supply curves for each market. d.Label your graphs fully and write an explanation of your work.

At a product's equilibrium price

How does the decreasing use of DVD players affect the market for prerecorded DVDs?

In recent years the cost of producing wines in the U.S.has increased largely due to rising rents for vineyards.At the same time,more and more Americans prefer wine over beer.Which of the following best explains the effect of these events in the wine market?

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

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

The phrase "demand has increased" means that