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

An increase in the price of inputs will cause the supply curve for a product to shift to the right.

Figure 3-4 -Refer to Figure 3-4. If the price is $25,

Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases.

Which of the following is the correct way to describe equilibrium in a market?

An inferior good is a good for which the quantity demanded decreases as the price increases, holding everything else constant.

Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen. One can conclude that

Figure 3-1 -Refer to Figure 3-1. An increase in population would be represented by a movement from

Table 3-2 -Refer to Table 3-2. The table above shows the demand schedules for caviar of two individuals (Ari and Sonia) and the rest of the market. At a price of $55, the quantity demanded in the market would be

Figure 3-7 -Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt when the price of ice cream, a substitute product, increases?

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

As the number of firms in a market decreases, the supply curve will shift to the left and the equilibrium price will rise.

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

An increase in the equilibrium price for a product will result

Figure 3-2 -Refer to Figure 3-2. An increase in the price of substitutes in production would be represented by a movement from

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)?

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

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

Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good) to increase?

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall. Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?

Would a change in the price of in-line skates cause a change in the supply of in-line skates? Why or why not?