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

What is the difference between an 'increase in supply' and an 'increase in quantity supplied'?

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

A surplus occurs when the actual selling price is above the market equilibrium price.

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

If a firm has an incentive to increase supply now and decrease supply in the future,the firm expects that the

Figure 3-2 -Refer to Figure 3-2.A decrease in the expected future price of the product would be represented by a movement from

Suppose that when the price of raspberries increases,Lonnie increases his purchases of papayas.To Lonnie,

Select the phrase that correctly completes the following statement.'A positive change in technology caused an increase in the supply of flat-screen televisions.As a result,________.'

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₂ and S₁ (point C).Which of the following changes would cause the equilibrium to change to point B?

A(n)________ is represented by a leftward shift of the demand curve while a(n)________ is represented by a movement along a given demand curve.

Which of the following is evidence of a surplus of bananas?

What is the ceteris paribus condition?

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

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₁ and S₁ (point A).If the price of oranges,a substitute for apples,decreases and the wages of apple workers increase,how will the equilibrium point change?

Table 3-1 -Refer to Table 3-1.The table contains information about the corn market.Use the table to answer the following questions. a.What are the equilibrium price and quantity of corn? b.Suppose the prevailing price is $9 per bushel.Is there a shortage or a surplus in the market? c.What is the quantity of the shortage or surplus? d.How many bushels will be sold if the market price is $9 per bushel? e.If the market price is $9 per bushel,what must happen to restore equilibrium in the market? f.At what price will suppliers be able to sell 22 000 bushels of corn? g.Suppose the market price is $21 per bushel.Is there a shortage or a surplus in the market? h.What is the quantity of the shortage or surplus? i.How many bushels will be sold if the market price is $21 per bushel? j.If the market price is $21 per bushel,what must happen to restore equilibrium in the market?

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

The law of demand implies,holding everything else constant,that as the price of ice cream

If the price of refillable butane lighters was to decrease,then

When deciding on which new products to develop,a firm must devote people,time,and money to designing a new product.Because any firm has only limited resources,it

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