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

If more insurance companies decide to cover part of the price of voluntary laser eye surgery,and more doctors decide to enter the field of laser eye surgery,what will happen in the market for laser eye surgery as a result of these two factors?

Elle decreased her consumption of bananas when the price of peanut butter increased.For Elle,peanut butter and bananas are

From a supply perspective,what impact would an increase in the price of motorcycles have on the market for motorcycles?

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

At a product's equilibrium price

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

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for women's clothing.Which panel best describes what happens in this market when the wages of seamstresses rise?

Holding everything else constant,an increase in the price of MP3 players will result in

Figure 3-2 -Refer to Figure 3-2.A decrease in productivity would be represented by a movement from

In each of the following situations,list what will happen to the equilibrium price and the equilibrium quantity for a particular product,which is a normal good. a.The population increases and the price of inputs increase. b.The price of a complement increases and technology advances. c.The number of firms in the market increases and income increases. d.Price is expected to increase in the future. e.Consumer preference increases and the price of a substitute in production decreases.

In February,market analysts predict that the price of titanium will rise in March.What happens in the titanium market in February,holding everything else constant?

The market for smart phones has grown rapidly over the past few years,due in part to the overwhelming success of the Apple iPhone.Following the successful launch of the iPhone in 2007,companies such as Samsung,HTC,and LG have all introduced products to compete with the iPhone.The smart phones introduced to compete with the iPhone would be considered

Figure 3-1 -Refer to Figure 3-1.A decrease in taste or preference would be represented by a movement from

By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis,economists assume that the most important determinant of the demand for a good is the ________ of the good.

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 number of firms in the market b.An increase in the current price of the product c.A decrease in productivity d.An increase in the expected future price of a product e.A decrease in the price of an input

Which of the following would cause both the equilibrium price and equilibrium quantity of potatoes (assume that potatoes are an inferior good)to decrease?

If a demand curve shifts to the left,then

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

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left,but the supply curve shifts less than the demand curve.As a result,

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