Exam 3: Supply and Demand: Theory

Good X is a normal good.If the average income of those who buy good X rises,the _____________ curve for good X will shift ____________ resulting in a(n)_____________ in the equilibrium price of X and a(n)____________ in the equilibrium quantity of X.

When Hurricane Katrina hit the Gulf Coast of the United States in 2005 it destroyed 5,000,000 acres of timber. Given that lumber is timber that has been sawed or split into planks and boards,explain in terms of supply and/or demand how the hurricane impacted each of the following markets (be sure to note the expected resulting impact on equilibrium price and quantity): a. Domestic lumber b. Imported lumber c. New home construction

Which of the following statements is true?

If consumers' surplus is $30 and the price paid for the good is $50,then the maximum price a buyer is willing and able to pay for the good is

At a price below the equilibrium price,there is

With respect to the supply and demand for a given product,describe the connection that exists between equilibrium/disequilibrium and predictions. Cite your own unique example in order to help support your answer.

Oil producers expect that oil prices next year will be lower than oil prices this year.As a result,oil producers are most likely to

If the demand for a good falls by less than the supply of the good rises,then the good's equilibrium price will __________ and its equilibrium quantity will __________.

Exhibit 3-3 -If the supply of and demand for a product both decrease,then equilibrium

Exhibit 3-14 -Refer to Exhibit 3-14. At a price of $10,there is a ____________ unit ____________ of good X.

An increase in the expected price of corn would likely do the following to the current supply and demand for corn:

Exhibit 3-14 -Refer to Exhibit 3-14. At a price of $12,there is a ____________ unit ____________ of good X.

In moving along a demand curve,which of the following is NOT held constant?

Labor is a resource that is necessary to produce many goods."If the price of labor falls," says the economist,"the prices of goods will soon follow." How does this work?

Suppose Smith wants one iPod no matter what the price is between $0 and $150,Jones wants one iPod no matter what the price is between $0 and $200,and Young wants one iPod no matter what the price is between $0 and $250. In this case,each individual buyer's demand curve will be __________________ and the market demand curve will be __________________.

Exhibit 3-1 -Refer to Exhibit 3-1.Equilibrium price and quantity are

Explain why the price of a good tends to fall when there is a surplus of the good. Give a hypothetical numerical example to help support your answer.

On a supply-and-demand diagram,quantity demanded equals quantity supplied

Which of the following is consistent with the law of demand?

Exhibit 3-6 -Refer to Exhibit 3-6.If an increase in the price of good Y causes the demand for good X to shift from D? to D?,goods X and Y are