Exam 3: Demand and Supply

Use the information below to answer the following questions. Fact 3.5.1 The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed. -Refer to Fact 3.5.1. If coffee is a normal good, then a decrease in income will

Use the table below to answer the following questions. Table 3.5.1 The Market for Car-Seat Heaters -Refer to Table 3.5.1. Suppose a problem develops with car-seat heaters - they malfunction and occasionally cause serious burns. As a result, demand decreases by 100 heaters at each price. The new equilibrium price is $________ and the new equilibrium quantity is ________ heaters per month.

Oatmeal is a normal good and cold cereal is a substitute for oatmeal. Raisins are a complement of oatmeal. Which of the following increases the demand for oatmeal?

If the price is above the equilibrium price, then

When the price of good A rises, the supply curve of good B shifts rightward. Which of the following statements are true?

Suppose income increases. Choose the correct statement.

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for tacos. A new scientific study reveals that tacos cause bad breath. Simultaneously, the cost of producing tacos increases. What is the new equilibrium, ceteris paribus?

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beans. If the price of peas, a substitute for beans, rises, and the cost of producing beans decreases, what is the new beans equilibrium, ceteris paribus?

When a shortage occurs, there is a tendency for the

The income effect influences food purchases because when the price of a certain food rises, other things remaining the same, ________. Consumers ________.

When a market is in equilibrium,

Use the figure below to answer the following questions. Figure 3.2.1 -Which one of the following statements best characterizes point B in Figure 3.2.1?

Use the table below to answer the following questions. Table 3.5.3 Demand and supply schedules for designer sport t-shirts at CoolU -Refer to Table 3.5.3. In a television interview, Joe Cool shows off his designer sport t-shirt, setting off a new craze that doubles business at the sportswear establishments. This would be represented as a

Use the information below to answer the following questions. Fact 3.5.1 The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed. -Refer to Fact 3.5.1. An increase in the price of Pepsi, a substitute for coffee will

Use the table below to answer the following questions. Table 3.5.4 Quantities demanded and supplied in equilibrium before and after a drought strikes potato farms -In Table 3.5.4 potatoes and rice are

If we observe a rise in the equilibrium price of good A, we know that the demand for A has

Use the figure below to answer the following questions. Figure 3.4.2 -At a price of $10 a unit in Figure 3.4.2,

The demand and supply model determines

The demand curve is P = 800 - 25QD. The supply curve is P = 500 + 25QS. At market equilibrium, the equilibrium quantity is ________ and the equilibrium price is ________.

Which of the following decreases the supply of popcorn?