Exam 3: Supply and Demand

If demand is downward sloping, an increase in supply with no change in demand will lead to a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price.

Use the following to answer questions: -(Table: The Demand for Chocolate-Covered Peanuts) Use Table: The Demand for Chocolate-Covered Peanuts. If George, Barbara, and Dan are the only three buyers in the market and the price of a bag of chocolate-covered peanuts is $0.50, the total market quantity demanded is _____ bags per month.

Use the following to answer questions: -(Figure: Shifts in Demand and Supply) Use Figure: Shifts in Demand and Supply. The graph shows how supply and demand might shift in response to specific events. Suppose a new machine allows restaurants and fast-food outlets to produce french fries at a lower cost. Which panel BEST describes how this will affect the market for french fries?

The market equilibrium is found at the:

In the market for tacos, a normal good, you observe that the equilibrium price and quantity have increased. This can be caused only by:

Use the following to answer questions: -(Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of Wheat. If a price of $10 temporarily exists in this market, a _____ of _____ bushels per period will result.

Which factor would result in a movement along the demand curve?

Use the following to answer questions: -(Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline. A factor that may have changed supply from S₁ to S₂ is:

In the local market for coffee, a normal good, the price will _____ and the quantity will _____ if new coffee shops open and consumers' incomes decrease because of a recession.

Which factor is NOT a determinant of supply?

It is certain that the equilibrium price will rise when the supply curve shifts to the _____ and the demand curve shifts to the _____.

Use the following to answer questions: -(Figure: Shifts in Demand and Supply III) Use Figure: Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose a spring frost destroys one-third of the nation's artichoke crop. Which panel BEST describes how this will affect the market for mayonnaise, which is a complement to artichokes?

Use the following to answer questions: -(Figure: Four Markets for Online Movie Rentals) Use Figure: Four Markets for Online Movie Rentals. If D₁ or S₁ is the original curve and D₂ or S₂ is the new curve, which of the graphs shows a change that results in a decrease in the quantity of online movie rentals supplied?

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 _____.

Use the following to answer questions: -(Figure: Supply and Demand in the Orange Juice Market) Use Figure: Supply and Demand in the Orange Juice Market. The market is in equilibrium at point C. Suppose most people drink orange juice only with champagne. What will be the new equilibrium point in the orange juice market if a law banning alcohol passes?

Many public utilities burn oil to generate electricity. If the price of oil increases, we expect a shift to the _____ in the _____ curve for _____ and a _____ price for electricity.

The _____ tomatoes will decrease if fertilizer prices rise.

Which factor will raise the price of milk?

The market price of airline flights increased recently. Some economists suggest that the price increased because jet fuel is much more expensive than before. As a result, they believe that, in the market for flights:

"In 2008, air travel decreased substantially, despite significant reductions in ticket prices." If this information is correct, it indicates that the law of demand did not apply to air travel in 2008.