Exam 3: Asupply,demand,and the Market Process

Figure 3-22 -Refer to Figure 3-22.Graph A shows which of the following?

According to Adam Smith's invisible hand principle,productive actions that promote the general welfare of society will be undertaken when

If the number of consumers in a market increases,the market demand curve will

Prices direct economic activity in a market economy by

If consumer tastes are changing more in favor of the consumption of a particular good the

In San Francisco,tickets for professional and college football games are substitutes.An increase in the ticket price for professional football,other things being equal,will

How would a decrease in the cost of production affect the market for new washing machines?

Two students are walking by a department store window that has on display a $400 dress.The English major declares,"I want that dress but can't afford it." The economics major replies,"No,you don't." Explain the logic of this reply.

Shannon buys a new CD player for her car for $135.She receives consumer surplus of $25 on her purchase if her willingness to pay is

If price rises,what happens to supply of a product?

Bill is willing to cut lawns for a minimum of $200 a week.He is,however,paid $250 for the same service by a lawn maintenance company.This is an example of

Figure 3-17 -Refer to Figure 3-17.Area C represents

Other things constant,a decrease in consumer income will

Which of the following would lead to an increase in the demand for computer software?

If an increase in the price of peaches reduces the demand for cream,this indicates that peaches and cream are

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

Figure 3-16 -Refer to Figure 3-16.When the price is P₁,producer surplus is

If air travel and bus travel are substitutes,

"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.

An increase in supply will cause