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

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₁ and S₁ (point A)) If there is a shortage of apples how will the equilibrium point change?

Vineyards can grow either red wine grapes or white wine grapes on their land.Which of the following would cause the supply of red wine grapes to decrease?

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

Tomas increased his consumption of potato chips when the price of pistachios increased.For Tomas,potato chips and pistachios are

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?

If the price of automobiles was to increase,then

Figure 3-5 -Refer to Figure 3-5.At a price of $5,the quantity sold

If in the market for peaches,the supply curve has shifted to the left

In 1984,the National Minimum Drinking Age Act was passed,raising the legal age to consume alcoholic beverages in the United States to 21.In much of Europe,the legal age to consume alcohol is 18.If the legal drinking age in the United States was changed back to 18,how would this affect the market for alcoholic beverages? What would happen to the equilibrium price and quantity of alcoholic beverages?

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?

Harvey Rabbitt pays for monthly cable TV service.Last week the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area.How is the market for cable TV services affected by this?

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

If a union successfully negotiates for higher wages and benefits for steel workers,what impact would this have on the supply and demand in the market for steel,assuming no other changes take place in this market?

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

If more insurance companies decide to cover part of the price of voluntary laser eye surgery and more doctors decide to enter the field of laser eye surgery,what will happen in the market for laser eye surgery as a result of these two factors?

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

A shortage is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded.

Which of the following would shift the supply curve for MP3 players to the right?

The cost of producing cigarettes in the U.S.has increased and at the same time,more and more Americans are choosing to not smoke cigarettes.Which of the following best explains the effect of these events in the cigarette market?

A shortage occurs when the market price is lower than the equilibrium price.