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

An increase in the demand for LED light bulbs due to changes in consumer tastes,accompanied by an increase in the supply of LED light bulbs as a result of government subsidies,will result in

In most countries in South America,the legal driving age is 18.If the legal driving age in the United States was raised from 16 to 18,how would this affect the market for new and used automobiles? What would happen to the equilibrium price and quantity of new and used automobiles?

Explain the difference between substitutes and complements.

Even when the demand for one good is high,the price of the good is also affected by supply.The textbook illustrates this by comparing the price of two items that were auctioned on the same day.Which of the following describes the results of the auction?

Figure 3-5 -Refer to Figure 3-5.At a price of $20,the quantity sold

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

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

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements.What panel describes what happens in this market when the price of bratwurst falls?

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left,equilibrium price and equilibrium quantity will both increase.

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt.Which panel describes what happens in the market for frozen yogurt when the price of ice cream,a substitute product,increases?

Use the following demand schedule for cherries to draw a graph of the demand curve.Be sure to label the demand curve and each axis,and show each point on the demand curve.

Select the phrase that correctly completes the following statement."A decrease in the expected future price caused an increase in the supply of smartphones.As a result,

Figure 3-2 -Refer to Figure 3-2.An increase in the expected future price of the product would be represented by a movement from

In April,market analysts predict that the price of titanium will fall in May.What happens in the titanium market in April,holding everything else constant?

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S1 (point A).If the price of motorcycle engines increases,and the wages of motorcycle workers increase,how will the equilibrium point change?

Studies have shown that drinking one glass of red wine per day may help prevent heart disease.Assume this is true,and a fungal disease destroys a large portion of the grape harvest of California vineyards.In the market for red wine,these two developments would

If the demand for a product decreases and the supply of the product does not change,equilibrium price and equilibrium quantity will both increase.

Which of the following would cause a decrease in the equilibrium price and decrease in the equilibrium quantity of papayas?

Suppose that when the price of pickles decreases,Teddy increases his purchase of ketchup.To Teddy,

Electric car enthusiasts want to buy more electric cars at a lower price.All of the following events would have this effect except