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

What is the difference between an 'increase in supply' and an 'increase in quantity supplied'?

Health clubs typically experience an increase in one-year memberships in January,but many new customers cancel their memberships before the end of the year.Which of the following is the best explanation for this behaviour?

Under Big W's everyday low pricing policy,the everyday low prices

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

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

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

'Because chips and salsa are complements,an increase in the price of chips will cause the demand for salsa to decrease.This initial shift in demand for chips results in a higher price for chips; this higher price will cause the demand curve for chips to shift to the right.' Which of the following correctly comments on this statement?

Which of the following will shift the demand curve for a good?

A normal good is a good for which the demand increases as income decreases,holding everything else constant.

Studies have shown links between calcium consumption and a reduction in osteoporosis.How does this affect the market for calcium?

Orange juice drinkers want to consume more orange juice at a lower price.Which of the following events would have this effect?

Last year,The Pottery Palace supplied 8000 ceramic pots at $40 each.This year,the company supplied the same quantity of ceramic pots at $55 each.Based on this evidence,The Pottery Palace has experienced

The endowment effect is the tendency for people to be unwilling to sell a good they already own even if they are offered a price greater than they would be willing to pay to buy the good if they did not already own it.

A sunk cost is a cost that has already been paid and cannot be recovered.

Sunk costs

At a product's equilibrium price

A decrease in quantity supplied is represented by a leftward shift of the supply curve.

Arnold Kim began blogging about Apple products during his fourth year of medical school.Kim's website,MacRumors.com,became so successful that he decided to give up his medical career and work full time on his website,despite the nearly $200 000 he had invested in his education.In making his decision,the $200 000 he spent on his education

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles?

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)?