Exam 3: Demand, Supply, and the Market Process

The law of demand indicates that

If the demand for a good increases, which of the following will generally occur in a market setting?

A cold spell in Florida extensively reduced the orange crop, and as a result, California oranges commanded a higher price. Which of the following statements best explains the situation?

The Red Jacket Mountain View Inn in New Hampshire charges $150 per room in the winter ski season and $90 during the summer months. The number of rooms and operating costs are constant year round. These prices indicate

Which of the following would cause an increase in the price of gasoline and an expansion in the equilibrium quantity?

Use the figure below to answer the following question(s). Figure 3-9 In Figure 3-9, if D and S represent the demand and supply for gasoline, what is the equilibrium price and quantity?

Suppose Katie, Kendra, and Kristen each purchase a particular type of cell phone at a price of $80. Katie's willingness to pay was $100, Kendra's willingness to pay was $95, and Kristen's willingness to pay was $80. Consumer surplus for the three individuals is

If we observe a decrease in the price of a good and an increase in the amount of the good bought and sold, this could be explained by

Over the past 20 years both the quantity of health care provided and health care prices have been rising rapidly. Economic theory would suggest that the observed data could best be explained as

If the demand for a good increased, what would be the effect on the equilibrium price and quantity?

If a small percentage increase in the price of a good results in a rather large percentage reduction in the quantity demanded of the good, demand is said to be

In his book The Wealth of Nations , this famous economist argued that economic activity was directed by an "invisible hand."

"Falling consumer income from the recent recession has hurt automakers in more ways than one. Not only have sales of new cars fallen, but car prices have fallen as well. As a result, the major automakers have announced cutbacks in production and layoffs of workers." Which of the following places these statements in the proper economic terminology within the context of the supply and demand model? [Note: It may help to graph this first.]

Table 3-1 Refer to Table 3-1. If the table represents the willingness to pay of four buyers and the price of the product is $15, then who would be willing to purchase the product?

The number of people willing to buy tickets to the Super Bowl is invariably greater than the number of tickets (and seats) available. This is evidence that the price of the tickets is

If people expect the price of coffee to rise next month, the demand for coffee will

Which of the following will reduce the supply of motorcycles?

If a large percentage increase in the price of a good results in a small percentage reduction in the quantity demanded of the good, demand is said to be

Under competitive conditions, market prices

Just before Valentine's Day, the price of roses increases dramatically. This is because