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

Grace Makutsi finally bought a pair of blue shoes that she had been coveting for a long time.In less than a week she discovered that the shoes were uncomfortable.Grace went back to wearing her old pair and stashed away the new pair.When asked by her boss,Mme.Ramotswe,why she does not simply give away the new pair,she said: 'But I paid so much for them.' Grace's behaviour

(Multiple Choice)

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Question 161

Consider the following hypothetical scenarios: Scenario A: You are about to purchase a pair of 7 for All Mankind jeans for $175 and a t-shirt for $45.The sales attendant at the store tells you that the pair of jeans you wish to buy is on sale for $160 at another store,located about a 20-minute drive away. Scenario B: You are about to purchase a pair of 7 for All Mankind jeans for $175 and a t-shirt for $45.The sales attendant at the store tells you that the t-shirt you wish to buy is on sale for $30 at another store,located about a 20-minute drive away. Based on standard economic theory,under which scenario would you make the 20-minute trip to the other store?

(Multiple Choice)

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Question 162

Table 3-1 -Refer to Table 3-1.The table contains information about the corn market.Use the table to answer the following questions. a. What are the equilibrium price and quantity of corn? b.Suppose the prevailing price is $9 per bushel.Is there a shortage or a surplus in the market? c.What is the quantity of the shortage or surplus? d.How many bushels will be sold if the market price is $9 per bushel? e.If the market price is $9 per bushel,what must happen to restore equilibrium in the market? f.At what price will suppliers be able to sell 22 000 bushels of corn? g.Suppose the market price is $21 per bushel.Is there a shortage or a surplus in the market? h.What is the quantity of the shortage or surplus? i.How many bushels will be sold if the market price is $21 per bushel? j.If the market price is $21 per bushel,what must happen to restore equilibrium in the market?

(Essay)

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Question 163

If,for a product,the quantity supplied exceeds the quantity demanded,the market price will fall until

(Multiple Choice)

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Question 164

If the price of a product is above equilibrium,what forces it down?

(Essay)

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Question 165

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

(Multiple Choice)

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Question 166

If you exhibit the endowment effect as a decision maker,then you are

(Multiple Choice)

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Question 167

Figure 3-1 -Refer to Figure 3-1.An increase in the expected future price of the product would be represented by a movement from

(Multiple Choice)

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Question 168

Assume that you had a ticket for a basketball playoff game that you bought for $50,the maximum price you were willing to pay.If a friend of yours offers to buy the ticket for $100 but you decide not to sell it,how can your decision be explained?

(Multiple Choice)

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Question 169

The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product.

(True/False)

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Question 170

By drawing a demand curve with on the vertical axis and on the horizontal axis,economists assume that the most important determinant of the demand for a good is the of the good.

(Multiple Choice)

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Question 171

An increase in the price of pineapples will result in

(Multiple Choice)

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Question 172

If the demand for a product decreases and the supply of the same product decreases,the equilibrium price will decrease.

(True/False)

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Question 173

Chips and salsa are complements.If the price of salsa decreases,the demand for chips will increase.

(True/False)

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Question 174

Figure 3-4 -Refer to Figure 3-4.If the price is $15,

(Multiple Choice)

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Question 175

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for potatoes and that steak and potatoes are complements.Which panel describes what happens in this market when the price of steak rises?

(Multiple Choice)

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Question 176

Which of the following would cause an increase in the supply of peanut butter?

(Multiple Choice)

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Question 177

If a firm expects that the price of its product will be higher in the future than it is today

(Multiple Choice)

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Question 178

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

(Multiple Choice)

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Question 179

If a firm has an incentive to increase supply now and decrease supply in the future,the firm expects that the

(Multiple Choice)

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Question 180

Showing 161 - 180 of 241

If,for a product,the quantity supplied exceeds the quantity demanded,the market price will fall until

If the price of a product is above equilibrium,what forces it down?

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

If you exhibit the endowment effect as a decision maker,then you are

Figure 3-1 -Refer to Figure 3-1.An increase in the expected future price of the product would be represented by a movement from

Assume that you had a ticket for a basketball playoff game that you bought for $50,the maximum price you were willing to pay.If a friend of yours offers to buy the ticket for $100 but you decide not to sell it,how can your decision be explained?

The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product.

By drawing a demand curve with on the vertical axis and on the horizontal axis,economists assume that the most important determinant of the demand for a good is the of the good.

An increase in the price of pineapples will result in

If the demand for a product decreases and the supply of the same product decreases,the equilibrium price will decrease.

Chips and salsa are complements.If the price of salsa decreases,the demand for chips will increase.

Figure 3-4 -Refer to Figure 3-4.If the price is $15,

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for potatoes and that steak and potatoes are complements.Which panel describes what happens in this market when the price of steak rises?

Which of the following would cause an increase in the supply of peanut butter?

If a firm expects that the price of its product will be higher in the future than it is today

If a firm has an incentive to increase supply now and decrease supply in the future,the firm expects that the

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

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

If,for a product,the quantity supplied exceeds the quantity demanded,the market price will fall until

If the price of a product is above equilibrium,what forces it down?

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

If you exhibit the endowment effect as a decision maker,then you are

Figure 3-1 -Refer to Figure 3-1.An increase in the expected future price of the product would be represented by a movement from

Assume that you had a ticket for a basketball playoff game that you bought for $50,the maximum price you were willing to pay.If a friend of yours offers to buy the ticket for $100 but you decide not to sell it,how can your decision be explained?

The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product.

By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis,economists assume that the most important determinant of the demand for a good is the ________ of the good.

An increase in the price of pineapples will result in

If the demand for a product decreases and the supply of the same product decreases,the equilibrium price will decrease.

Chips and salsa are complements.If the price of salsa decreases,the demand for chips will increase.

Figure 3-4 -Refer to Figure 3-4.If the price is $15,

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for potatoes and that steak and potatoes are complements.Which panel describes what happens in this market when the price of steak rises?

Which of the following would cause an increase in the supply of peanut butter?

If a firm expects that the price of its product will be higher in the future than it is today

If a firm has an incentive to increase supply now and decrease supply in the future,the firm expects that the

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

By drawing a demand curve with on the vertical axis and on the horizontal axis,economists assume that the most important determinant of the demand for a good is the of the good.