Exam 3: Where Prices Come From: The Interaction of Demand and Supply

Vineyards can grow either red wine grapes or white wine grapes on their land.Which of the following would cause the supply of red wine grapes to decrease?

The law of demand implies,holding everything else constant,that as the price of bagels increases

Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right,but the supply curve shifts more than the demand curve.As a result

If in the market for apples the supply has decreased,then

Tom Searchinger,a senior attorney at the Environmental Defense Fund,observed that generous farm subsidies have encouraged farmers to produce more corn and more wheat.How does this affect the market for fertilizer?

A decrease in the number of firms in a market will cause supply to increase.

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₁ and S₁ (point A) If there is an increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples, the equilibrium could move to which point?

A surplus occurs when the actual selling price is above the market equilibrium price.

Figure 3-1 -Refer to Figure 3-1.A decrease in the price of the product would be represented by a movement from

Figure 3-2 -Refer to Figure 3-2.An increase in price of inputs would be represented by a movement from

Which of the following would definitely cause an increase in the equilibrium price and an increase in the equilibrium quantity of watermelons?

Assume that California Merlot is a normal good.Prices of California Merlot have risen steadily in recent years.Over this same period,prices for French oak barrels used for wine storage have dropped and consumer incomes have risen.Which of the following best explains the rising prices of California Merlots?

Figure 3-4 -Refer to Figure 3-4.At a price of $25,how many units will be supplied?

Figure 3-1 -Refer to Figure 3-1.If the product represented is an inferior good,a decrease in income would be represented by a movement from

If an increase in income leads to a decrease in the demand for salami,then salami is

When the price of a normal good falls,consumers buy a larger quantity because of the ________ effect and the ________ effect.

Hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the Gulf coast states.In the market for gasoline

The income effect explains why there is an inverse relationship between the price of a normal good and the quantity of the good demanded.

Which of the following would cause both the equilibrium price and equilibrium quantity of barley (assume that barley is an inferior good)to increase?

What would happen in the market for laser eye surgery if insurance companies started to cover a portion of the price of voluntary procedures?