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

When Toyota introduced its 2010 Prius,it announced that the average retail price of the 2010 model would be lower than the average retail price was for the equivalent 2009 model.Which of the following would explain the price differential?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for ramen noodles,an inferior good.Which panel describes what happens in this market as a result of an increase in income?

An increase in the demand for peanuts due to changes in consumer tastes,accompanied by an increase in the supply of peanuts as a result of favorable growing conditions,will result in

An increase in input costs in the production of electric automobiles caused the price of electric automobiles to rise.Holding everything else constant,how would this affect the market for gasoline-powered automobiles (a substitute for electric automobiles)?

In June,buyers of titanium expect that the price of titanium will fall in July.What happens in the titanium market in June,holding everything else constant?

Suppose a drought resulted in a major reduction in the California lettuce crop.In the market for lettuce

A decrease in the price of inputs will cause the supply curve for a product to shift to the right.

Competitive market equilibrium is a market equilibrium with many buyers and sellers.

An increase in quantity supplied is represented by a rightward shift of the supply curve.

Technological advancements have led to lower prices and an increase in the sale of digital cameras.How does this affect the digital photo printing paper market?

Figure 3-4 -Refer to Figure 3-4.At a price of $20,how many units will be sold?

Figure 3-5 -Refer to Figure 3-5.At a price of $10,the quantity sold

How has the growing popularity of factory outlet stores affected the market for clothing at retail department stores?

Which of the following statements is true?

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 S2 (point B).Which of the following changes would cause the equilibrium to change to point C?

The law of demand implies,holding everything else constant,that as the price of gelato

Figure 3-4 -Refer to Figure 3-4.At a price of $25,how many units will be supplied?

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?

The substitution effect explains why there is an inverse relationship between the price of a product and the quantity of the product demanded.

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