Exam 3: Supply and Demand

Use the following to answer questions: -(Figure: Shifts in Demand and Supply IV) Use Figure: Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose half of the people in San Diego move to Colorado Springs. Which panel BEST describes how this will affect the market for houses in Colorado Springs?

An increase in demand and a decrease in supply will lead to a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price.

_____ illustrates an inverse relationship between price and quantity.

The demand for meals at a local Chipotle will shift to the left if:

An increase in the price of hamburger would probably result in _____ in the demand for hamburger buns.

Consider two competing motorcycle manufacturers, Harley-Davidson and Honda. If Harley-Davidson raises the price of its motorcycles, we can expect:

Given a supply curve that is positively sloped and a demand curve for a normal good that is negatively sloped, an increase in income will result in:

Use the following to answer questions: -(Figure: Demand for Coconuts) Use Figure: Demand for Coconuts. If there is an increase in preference for coconuts, it will be represented in the figure as a:

Which factor will NOT cause an increase in the supply of good X?

Which factor would cause a DECREASE in the supply of a good?

Use the following to answer questions: -(Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II. The figure shows how supply and demand might shift in response to specific events. Suppose vast new oilfields are discovered offshore of California and gasoline prices fall. Which panel BEST describes how this will affect the market for sport utility vehicles, a complement in consumption to gasoline?

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

An increase in demand for good X can be caused by a decrease in the price of X.

Use the following to answer questions: -(Figure: Demand for Online Movie Rentals) Use Figure: Demand for Online Movie Rentals. A decrease in the price of movie tickets (a substitute) would result in a change illustrated by the move from:

Use the following to answer questions: -(Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline. Given the initial equilibrium of S₁ and D, any price lower than _____ will exert pressure for the price to _____.

Use the following to answer questions: -(Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline. When the supply curve shifted from the initial equilibrium, the new intersection of supply and demand has a price of _____ and quantity of 400. This supply shift could have resulted from _____.

Use the following to answer questions: -(Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.60, the price will:

Use the following to answer questions: -(Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II. The figure shows how supply and demand might shift in response to specific events. Suppose the technology for producing ethanol fuel improves. Which panel BEST describes how this will affect the market for ethanol?

Excess supply occurs when the:

In the market for corn tortilla chips, what would cause a price increase?