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

If the price of grapefruit rises,the substitution effect due to the price change will cause

Ranchers can raise either cattle or sheep on their land.Which of the following would cause the supply of sheep to increase?

A decrease in the equilibrium quantity for a product will result

The phrase 'demand has decreased' means that

The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in purchasing power as a result of the price change.

As the number of firms in a market increases,the supply curve will shift to the right and the equilibrium quantity will rise.

The demand by all the consumers of a given good or service is the ________ for the good or service.

Holding everything else constant,an increase in the price of MP3 players will result in

Which of the following statements is true?

What are the two effects that explain the law of demand? Briefly explain each effect.

Select the phrase that correctly completes the following statement.'An increase in input prices caused a decrease in the supply of baseballs; as a result,________.'

Assume that the hourly price for the services of tarot card readers has risen and sales of these services have also risen.One can conclude that

In each of the following situations,list what will happen to the equilibrium price and the equilibrium quantity for a particular product,which is a normal good. a.The population increases and the price of inputs increase. b.The price of a complement increases and technology advances. c.The number of firms in the market increases and income increases. d.Price is expected to increase in the future. e.Consumer preference increases and the price of a substitute in production decreases.

Holding everything else constant,a decrease in the price of bicycles will result in

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,Kim decided to ignore the money and time he spent on his education.Economists would say that Kim made a

Scarcity is defined as the situation that exists when the quantity demanded for a good is greater than the quantity supplied.

Which of the following is evidence of a surplus of bananas?

If the price of petrol decreases,what will be the impact in the market for public transportation?

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for tropical hardwood trees if the government restricts the amount of forest lands that can be logged?

Which of the following is evidence of a shortage of walnuts?