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

When deciding on which new products to develop,a firm must devote people,time,and money to designing a new product.Because any firm has only limited resources,it

The demand for lobster is higher in the summer than in the spring.If the price of lobster is lower in summer than in spring then

Table 3-2 -Refer to Table 3-2.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?

Elvira decreased her consumption of bananas when the price of peanut butter increased.For Elvira,peanut butter and bananas are

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for almonds.Which panel best describes what happens in this market when there is an increase in the productivity of almond harvesters?

Which of the following is expected to occur as the baby-boom generation ages?

Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln.Which of the following events would cause the price differences in these letters to get smaller?

Olive oil producers want to sell more olive oil at a higher price.Which of the following events would have this effect?

Figure 3-1 -Refer to Figure 3-1.A decrease in taste or preference would be represented by a movement from

Figure 3-4 -Refer to Figure 3-4.If the current market price is $10,the market will achieve equilibrium by

In recent years the cost of producing organic produce in the U.S.has decreased largely due technological advancement.At the same time,more and more Americans prefer organic produce over conventional produce.Which of the following best explains the effect of these events in the organic produce market?

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

A normal good is a good for which the demanded increases as income decreases,holding everything else constant.

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

If,in the market for oranges,the supply has increased then

What is the law of supply? What does this law imply about the shape of the supply curve?

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

At a product's equilibrium price

"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?

An increase in the quantity of a product supplied is caused by an increase in the price of the product.