Exam 3: Supply and Demand

Alice goes to the local supermarket to purchase one package of her favorite taco shells. She often pays $1.50 for a package, but she finds they are on sale for $1 each. According to the law of demand, one can expect Alice to:

If demand decreases and supply increases, the direction of change in the equilibrium quantity is unpredictable unless the relative magnitudes of the demand and supply changes are known.

Use the following to answer questions: Figure: Supply and Demand in the Orange Juice Market -(Figure: Supply and Demand in the Orange Juice Market) Look at the figure Supply and Demand in the Orange Juice Market. The market is currently in equilibrium at point C. Suppose a hurricane hits Florida, where oranges are grown. What will be the most likely new equilibrium point in the orange juice market?

The market for soybeans is initially in equilibrium. Because of mad cow disease, producers decide to replace bone meal with soybeans in cattle feed. The likely effect is that:

The market for corn is in equilibrium. Which of the following is most likely to INCREASE the equilibrium price of corn?

Use the following to answer questions: -(Table: The Demand for Chocolate-Covered Peanuts) Look at the table The Demand for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.60, the quantity demanded by George is _____ bags per month.

It is certain that the equilibrium quantity will fall when:

Use the following to answer questions: -(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.50, there is:

Use the following to answer questions: Figure: Supply of Coconuts -(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. An improvement in the technology used to harvest coconuts (e.g., a faster, less expensive coconut picker) would be represented in the figure as a movement from:

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

Market equilibrium occurs when:

Because of an increase in the price of wheat, an important ingredient in the production of bread, combined with an increase in the number of people consuming bread:

Suppose there is an excess supply of chemical engineers in India. Over time, the salaries for chemical engineers will fall in India.

After graduation many students' demand for used cars decreases. This may be because used cars are considered a normal good to college graduates.

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

A market is composed of three individuals, Nicholas, Benjamin, and Alexander. Their individual demand schedules are given below and are as follows: Based on this information, which of the following market demand schedules accurately portrays this market?

In the market for canned pinto beans, _____ will increase if income increases and if pinto beans are a(n) _____ good.

Use the following to answer questions: -(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z. If the price of good Z is $15, there will be:

In the market for wheat, if the price of ethanol (which is made from corn, a substitute in production) increased dramatically, the _____ wheat would _____.

Use the following to answer questions: Figure: The Market for Candy -(Figure: The Market for Candy) Look at the figure The Market for Candy. A surplus of the good will exist at a price of: