Exam 3: Demand, Supply, and the Market Process

During a major war between two oil producing nations, there would likely be

According to the law of supply, as the price of a good decreases

"If gasoline were taxed, the price of gasoline would rise. Consequently, the demand for gasoline would fall, causing the price to fall to the original level." This statement is

Suppose the price of gasoline and other petroleum products declined sharply. Which of the following will most likely occur as the result of the lower petroleum prices?

A freeze in Florida devastates the orange crop at the same time a new study is released showing the health benefits of vitamin C (leading consumers to want to buy more orange juice). How will the equilibrium price and quantity of orange juice change in response to the combination of these two events?

"The operator of the tunnel that links Britain and France, Eurotunnel , said that commercial and tourist traffic using its car and coach shuttle service had fallen sharply in 2004, leading to a drop in operating revenues of 4%. Eurotunnel's chief executive, Jean-Louis Raymond, blamed cut-throat competition from budget airlines." (news story, January 2005) a. If Mr. Raymond is correct, are the services of airlines and Eurotunnel substitutes or complements? b. Use demand and supply analysis to explain how lower airfares between Paris and London impact the market for the shuttle services of Eurotunnel.

If the market price is above the equilibrium price, there will be a tendency for price to decrease, causing

An important assumption that is made when constructing a demand schedule is that

Which of the following would most likely cause both a decrease in the price of plasma screen TVs and a decrease in the number sold?

Figure 3-19 Refer to Figure 3-19. Sellers whose costs are less than price are represented by which line segment?

If consumer purchases of a good are not very sensitive to the price of the good, this is illustrated by a

Suppliers recognize there is a shortage in the market for their product when they notice that

All things constant, a decrease in bus, train, and airplane fares will

Which of the following would cause the price of automobiles to rise?

Which of the following would most likely cause the supply of wheat to increase?

If the price of tickets to the World Series were set below the equilibrium price,

The height of the supply curve at a quantity of 100 represents the

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that

Figure 3-23 Refer to Figure 3-23. It is apparent from the figure that

"A reduction in gasoline prices caused the demand for gasoline to increase. The lower gas prices also led to an increase in demand for large cars, causing their prices to rise." These statements