Exam 3: Supply and Demand

A competitive market occurs when there are many buyers and sellers of the same good.

A new wonder diet that results in a dramatic weight loss sweeps through the United States. The key to the diet is to eat unlimited 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.

Use the following to answer questions: -(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for Chocolate-Covered Peanuts. A surplus of 210 bags of chocolate-covered peanuts exists if the price is _____ per bag.

For most goods, purchases tend to rise with increases in buyers' incomes and to fall with decreases in buyers' incomes. Such goods are known as:

After graduation from college, you might have an increase in your income from a new job. If as a result you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger is a(n) _____ good.

Which of the following best describes demand?

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

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

Suppose there is an excess demand for water in Florida. This means that we can expect the price of water to increase in Florida over time.

The typical supply curve illustrates that:

If suppliers expect prices for their product to rise next year, then one would expect:

Consider the market for corn. What happens if there is an increased demand for corn tortillas and at the same time a new corn seed becomes available that dramatically increases the yield per acre?

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

A negative relationship between quantity demanded and price is called the law of:

When milk prices increased in 2008, one milk consumer stated that the reason he cut down on milk consumption was so that he could drive his car. This action represents a:

Use the following to answer questions: Figure: Shifts in Demand and Supply IV -(Figure: Shifts in Demand and Supply IV) Look at the 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?

Use the following to answer questions: -(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for Chocolate-Covered Peanuts. A shortage of 210 bags of chocolate-covered peanuts exists if the price is _____ per bag.

Use the following to answer questions: Figure: Four Markets for DVDs -(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. Which of the graphs shows what may happen in the market for DVDs if D₁ or S₁ is the original curve and D₂ or S₂ is the new curve and if the cost of producing DVD players increases?

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

A decrease in demand with no change in supply will lead to _____ in equilibrium quantity and _____ in equilibrium price.