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

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

Which of the following would cause an increase in the equilibrium price and an increase in the equilibrium quantity of watermelons?

An increase in the price of pineapples will result in

Prices of California Merlot wine (assume that this is a normal good)have risen steadily in recent years.Over this same period,prices for French oak barrels used for wine storage have dropped and consumer incomes have risen.Which of the following best explains the rising prices of California Merlots?

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

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

From a supply perspective,what impact would an increase in the price of motorcycles have on the market for motorcycles?

What would happen in the market for laser eye surgery if insurance companies started to cover a portion of the price of voluntary procedures?

If the population increases and input prices decrease,the equilibrium quantity of a product will definitely increase.

Suppose that when the price of raspberries increases,Lonnie increases his purchases of papayas.To Lonnie,

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

Draw a demand curve and label it D1.On the graph,illustrate an increase in demand and a decrease in demand,and label the curves D2 and D3,respectively.Starting on demand curve D₁,explain the shift that would result from each of the following events: a.an increase in income and the good is a normal good b.an increase in income and the good is an inferior good c.a decrease in the price of a substitute good d.a decrease in the price of a complementary good e.an increase in the taste for the good f.a decrease in population g.an increase in the expected future price of the good

The Internet has created a new category in the book selling market,namely,the "barely used" book.How does the availability of barely used books affect the market for new books?

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.

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

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.What panel describes what happens in this market when the price of steak rises?

For each of the following pairs of products state which are complements,which are substitutes,and which are unrelated. a.Digital camera and memory stick b.7Up and Mountain Dew c.Swimsuits and flip-flops d.Tylenol and cat food e.Photocopier and paper

If the number of firms producing mouthwash increases and consumer preference for mouthwash increases,the equilibrium price of mouthwash will definitely increase.

In response to a surplus the market price of a good will fall; as the price falls,the quantity demanded will increase and quantity supplies will decrease until equilibrium is reached.

Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good)to increase?