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

A change in which variable will change the market demand for a product?

Article Summary A growing number of U.S. citizens are going to other countries for elective surgery procedures. Improved quality and significant cost savings abroad have attracted an increasing number of what are being referred to as American medical tourists, especially those who either do not have insurance or whose insurance does not cover the desired procedure. As few as five years ago, Americans tended to travel to countries such as Thailand or Mexico for the procedures, but many are now choosing to go to Europe, where governments and hospitals are now publicizing these services. Many of the procedures being done overseas are joint replacement, and partly in response to the number of patients going abroad for these procedures, programs are being developed to reduce the cost of these surgeries in the United States. Source: Elizabeth Rosenthal, "The Growing Popularity of Having Surgery Overseas," New York Times, August 6, 2013. -Refer to the Article Summary. If more European governments and hospitals begin to offer and publicize their services to American medical tourists and, due to the growing number of aging baby boomers, more Americans desire joint-replacement surgery, what will happen in the market for joint-replacement surgery as a result of these two factors?

A ________ demand curve for shampoo would be caused by a change in the price of shampoo.

Figure 3-8 -Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S1 (point A) The equilibrium point will move from A to B.

Discuss the correct and incorrect economic analysis in the following statement. "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."

What is the difference between a market equilibrium and a competitive market equilibrium?

An increase in population results in an increase in demand.

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

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

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left, equilibrium price and equilibrium quantity will both increase.

Which of the following describes a characteristic of a perfectly competitive market?

Figure 3-5 -Refer to Figure 3-5. At a price of $15,

Competitive market equilibrium is a market equilibrium with many buyers and sellers.

A supply schedule

Olive oil producers want to sell more olive oil at a higher price. Which of the following events would have this effect?

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

Figure 3-7 -Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for almonds. Which panel best describes what happens in this market when there is an increase in the productivity of almond harvesters?

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

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.

An increase in the demand for LED light bulbs due to changes in consumer tastes, accompanied by an increase in the supply of LED light bulbs as a result of government subsidies, will result in