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

Figure 3-6 -Refer to Figure 3-6. The figure above represents the market for coffee grinders. Compare the conditions in the market when the price is $15 and when the price is $21. Which of the following describes how the market differs at these prices?

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

One would speak of a movement along a supply curve for a good, rather than a change in supply, if

A decrease in the demand for eggs due to changes in consumer tastes, accompanied by a decrease in the supply of eggs as a result of an outbreak of Avian flu, will result in

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

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

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?

Electric car enthusiasts want to buy more electric cars at a lower price. All of the following events would have this effect except

Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles?

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

Suppose that when the price of pickles decreases, Teddy increases his purchase of ketchup. To Teddy,

In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is an inferior good. a. The population increases and productivity increases. b. The income increases and the price of inputs decrease. c. The number of firms in the market decreases and income increases. d. Consumer preference increases and the price of a complement decreases. e. The price of a substitute in consumption decreases and the price of a substitute in production decreases.

If an increase in income leads to in an increase in the demand for sushi, then sushi is

Figure 3-8 -A decrease in the equilibrium price for a product will result

Table 3-4 -Refer to Table 3-4. 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

The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a substitute product.

What is the law of supply? What does this law imply about the shape of the supply curve?

Table 3-3 -Refer to Table 3-3. 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 $4, the quantity demanded in the market would be

Assume that in recent years the cost of producing microbrew beer in the U.S. has decreased largely due to technological improvements. At the same time, more and more Americans prefer microbrew beer over wine. Which of the following best explains the effect of these events in the microbrew beer market?

Which of the following would shift the supply curve for smartphones to the right?