Exam 3: The Supply and Demand Model

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If a drought in Florida reduces the amount of oranges grown,then

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A market is in equilibrium

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The principle that consumers tend to buy less of a good or service when its price increases,all else held equal,is called the law of

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According to the law of demand,the price of a product increases when the quantity demanded increases.

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Suppose a decrease in consumers' incomes causes a decrease in the demand for chicken and an increase in the demand for potatoes.Which good is inferior and which good is normal? How will the equilibrium price and equilibrium quantity change for each good?

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A demand curve represents the relationship between consumer income and the quantity demanded.

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According to the law of demand,one way to reduce the amount of tobacco consumption is to

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A demand curve is always flat.

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Exhibit 3-3 Exhibit 3-3   -Refer to Exhibit 3-3.If the price is $27, -Refer to Exhibit 3-3.If the price is $27,

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Suppose in a financial crisis,major automakers reduce their production of autos while consumers reduce their demand for autos.We can conclude with certainty that in the market of autos,

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If a technological improvement took place in the computer industry,we would expect to see the equilibrium price of computers to

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If the government decides to pay producers of houses $2,000 for every house they produce,

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Which of the following causes a movement along the demand curve for apples?

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The demand for goods sold in Dollar Stores increases when consumer incomes fall in a recession.We can conclude that goods sold in Dollar Stores

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A price at which quantity demanded equals quantity supplied

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Suppose demand and supply in a market can be expressed by these equations: QD = 40 - 0.5P QS = 15 + 2P If the prevailing market price is $14,what are the quantity demanded and the quantity supplied?

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When economists say that the demand for a product has decreased,they mean that

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Suppose it becomes a common belief among consumers that the current cotton crop falls because of a drought,the price of cotton clothing will rise greatly next year.Then in the current market for cotton clothing,the

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Exhibit 3-4 Exhibit 3-4   -Refer to Exhibit 3-4.If S<sub>1</sub> and D<sub>1</sub> are the original supply and demand curves and they shift to S<sub>2</sub> and D<sub>2</sub>,respectively,then the new equilibrium price and quantity will be -Refer to Exhibit 3-4.If S1 and D1 are the original supply and demand curves and they shift to S2 and D2,respectively,then the new equilibrium price and quantity will be

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If incomes increase,then the ____ in the market for luxury cars as normal goods ____.

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