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

Figure 3-5 -Assume there is a shortage in the market for digital music players. Which of the following statements correctly describes this situation?

Assume there is a surplus in the market for hybrid automobiles. Which of the following statements correctly describes this situation?

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

Which of the following will not shift the demand curve for a good?

If the price of propane-fueled gas grills was to decrease, then

Figure 3-4 -Refer to Figure 3-4. If the current market price is $25, the market will achieve equilibrium by

Figure 3-7 -Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for used clothing, an inferior good. Which panel describes what happens in this market as a result of a decrease in income?

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

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. If the price of Kona coffee falls from $6 to $4, the market quantity demanded would

In October, market analysts predict that the price of platinum will fall in November. What happens in the platinum market in October, holding everything else constant?

It is possible for a market for a good to experience a surplus and a shortage at the same time.

One would speak of a change in the quantity of a good supplied, rather than a change in supply, if

Prices of microbrewery beer (assume that this is a normal good) have risen steadily in recent years. Over this same period, prices for fermenting vats used in beer making have also risen and consumer incomes have fallen. Which of the following best explains the rising prices of microbrewery beer?

If the demand for a product decreases and the supply of the same product increases, the equilibrium quantity will increase.

Prices of commercial airline tickets (assume that this is a normal good) have fallen in recent months. Over this same period, the price of jet fuel has risen and consumer incomes have fallen. Which of the following best explains the falling prices of airline tickets?

The cost of producing cigarettes in the U.S. has increased and at the same time, more and more Americans are choosing to not smoke cigarettes. Which of the following best explains the effect of these events in the cigarette market?

Suppose consumer preference for beef starts to rise while the cost of raising beef continues to rise. In the market for beef, this would be represented by the equilibrium price ________ and the equilibrium quantity ________.

Suppose a drought resulted in a major reduction in the California lettuce crop. In the market for lettuce,

A positive technological change will cause the quantity supplied of a good to increase.

The supply curve for umbrellas