Exam 3: Supply and Demand

Excess supply occurs when the:

A new wonder diet that results in a dramatic weight loss sweeps through the United States.The key to the diet is to eat large amounts of red meat (beef)but no poultry or carbohydrate-rich foods.As millions of Americans switch to the new diet,we can expect a(n)_____ in the _____ beef,leading to a shift to the _____ in the _____ curve for beef and _____ beef prices.

If coffee and tea are viewed as substitutes in consumption,then an increase in the price of coffee will increase the demand for tea.

If chicken and beef are substitutes,then a fall in the price of chicken will bring about:

If the economy booms and peoples' incomes rise,then the demand curve for a normal good like new houses will _____ and the equilibrium quantity of new houses produced will _____.

Suppose oranges and clementines are substitutes.Holding everything else constant,if the price of oranges increases,then the demand for _____ will _____.

Raclette is a popular wintertime dish in Switzerland.It is essentially melted Raclette cheese over boiled new potatoes.If the price of Raclette cheese decreased,we would expect to see:

When the price of lamps increases,the:

When the price of a good increases and the quantity demanded decreases,this demonstrates:

If two of a producer's goods are substitutes in production,this suggests that the producer (with her fixed set of resources)will need to reduce production of one good when she:

A newspaper story recently reported that the price of new cars,a normal good,has decreased and the quantity of new cars sold has dropped.The new price and quantity could have been caused by a(n):

Use the following to answer question: -(Figure: Supply of Coconuts)Use Figure: Supply of Coconuts.If the prices of inputs (e.g. ,labor,fertilizer,and fuel)used to produce and transport coconuts decreased,it could be represented in the figure as a movement from:

Gasoline,a derivative of oil,is a large part of transportation costs for many producers.If the price of oil increases at the same time that incomes fall for many consumers,one would expect the equilibrium price of many normal goods to _____,while their equilibrium quantities would _____.

An inferior good is one for which a(n)_____ in buyers' incomes causes a(n)_____.

Use the following to answer question: -(Figure: Shifts in Demand and Supply)Use Figure: Shifts in Demand and Supply.The figure shows how supply and demand might shift in response to specific events.Suppose scientists discover that eating a tomato a day prevents aging.Which panel BEST describes how this will affect the market for tomatoes?

Use the following to answer question: -(Table: Competitive Market for Good Z)Use Table: Competitive Market for Good Z.If the demand curve for good Z is linear,it can be expressed as:

Suppose the local real estate market is in equilibrium.A recession causes local household incomes to decline.At the same time,construction of a large subdivision of new homes has just been completed.Given these two changes and assuming that real estate is a normal good,we can predict that the price of real estate will _____ and the quantity of real estate bought and sold will _____.

Use the following to answer question: -(Table: The Market for Chocolate-Covered Peanuts)Use Table: The Market for Chocolate-Covered Peanuts.If the price of chocolate-covered peanuts is $0.80,there is a monthly:

Use the following to answer question: -(Figure: The Market for Candy)Use Figure: The Market for Candy.Equilibrium occurs at a price of _____,and the equilibrium quantity is equal to _____.

Use the following to answer question: -(Figure: The Demand and Supply of Wheat)Use Figure: The Demand and Supply of Wheat.If a price of $8 temporarily exists in this market,a _____ of _____ bushels per period will result.