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

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

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

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

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 consumers believe the price of iPads will decrease in the future,this will cause the demand for iPads to decrease now.

If a decrease in income leads to an increase in the demand for sardines,then sardines are

If the demand for a product increases and the supply of the product does not change,equilibrium price and equilibrium quantity will both increase.

The ________ effect refers to the change in quantity demanded of a good that results from the effect of a change in the good's price on consumers' purchasing power.

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.

Figure 3-2 -Refer to Figure 3-2.A decrease in productivity would be represented by a movement from

A decrease in the demand for incandescent light bulbs due to changes in consumer tastes,accompanied by a decrease in the supply of incandescent light bulbs as a result of government restrictions,will result in

If an increase in income leads to a decrease in the demand for popcorn,then popcorn is

Figure 3-1 -Refer to Figure 3-1.If the product represented is a normal good,a decrease in income would be represented by a movement from

Quantity supplied refers to the amount of a good or service that a firm is willing and able to supply at a given price.

All else being equal,as the price of a product falls,the quantity supplied increases.

The law of demand implies,holding everything else constant,that as the price of ice cream

Which of the following would cause a decrease in the supply of milk?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for rice.What happens in this market if buyers expect the price of rice to fall?

Figure 3-5 -Refer to Figure 3-5.In a free market such as that depicted above,a surplus is eliminated by

Behavioural economics refers to the study of situations