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

An increase in the price of off-road vehicles will result in

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

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

Suppose a negative technological change in the production of disease-resistant wheat caused the price of wheat to rise.Holding everything else constant,how would this affect the market for corn (a substitute for wheat)?

Figure 3-1 -Refer to Figure 3-1.A decrease in the price of the product would be represented by a movement from

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

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

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

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

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

Explain the differences between a change in supply and a change in quantity supplied.

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

Market equilibrium occurs where supply equals demand.

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

Wilbur Smith,a financial advisor,recently told one of his clients: 'The biggest mistake you can make is to hold onto shares for too long in order to avoid a loss.Let's say you bought a share for $50 per share but that six months later the price fell to $40 after a poor earnings report.Many of my clients in this situation will keep the shares,hoping the price will later rise above $50.In most cases like this the price does not rise and may even fall.You must know when to cut your losses.' Which of the following is the best explanation for Smith's advice?

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

In January,buyers of gold expect that the price of gold will rise in February.What happens in the gold market in January,holding all else constant?

The cost of raising beef cattle has risen at the same time as consumer preference for beef has fallen.In the market for beef,this would be represented by the equilibrium price ________ and the equilibrium quantity ________.

Suppose that when the price of hamburgers decreases,the Ruiz family increases their purchases of ketchup.To the Ruiz family,

Which of the following is not a common mistake made by consumers?