Exam 3: Demand and Supply

You observe that an increase in the price of salsa decreases the demand for tortilla chips and increases the demand for potato chips. You can conclude that

Suppose that the number of companies selling computer software decreases. How does this change affect the supply of computer software and the supply curve of computer software?

-In the above figure, a change in quantity demanded with unchanged demand is represented by a movement from

Coffee and sugar are complements. If the supply curve of coffee shifts leftward because of poor weather, then there will be

Using supply-and-demand diagrams, show and explain the effects of the following events on the price of CD-Rs and the quantity of CD-Rs sold. For each event, identify which of the determinants of demand or supply is affected, how it influences demand or supply, and what happens to the equilibrium price and quantity. a) The price of a CD burner falls. b) Workers who make CD-Rs get a pay raise. c) Producers introduce new cost-saving technologies in their CD-R production plants. d) Consumers' incomes increase and CD-Rs are a normal good. e) Free peer-to-peer music exchange through the Internet becomes legal.

What is the effect on the price and quantity of a product if the demand decreases and the supply simultaneously increases?

The supply curve indicates the minimum quantity that a producer would be willing to supply at alternative prices.

When the price of a pizza decreases from $12 to $10, it is definitely the case that the

-The above figures show the market for gasoline. Which figure(s) shows the effect of a freezing cold winter which drives up the price of home heating oil (a substitute in production for gasoline because each is made from crude oil)?

Until 2007, the price of sport utility vehicles (SUVs) rose and each year more were purchased. This experience suggests that

The "income effect" in the market for aspirin means that

If the price of aluminum used to make bicycles increases, the price of a bicycle rises because of a

An increase in the price of the cheese used to produce pizza shifts the supply curve of pizza ________ and shifts the demand curve for pizza ________.

Which of the following statements is CORRECT?

-In the figure, the equilibrium price is initially $3 per bushel of wheat. If suppliers come to expect that the price of a bushel of wheat will rise in the future, but buyers do not, the current equilibrium price will

The law of demand implies that, other things remaining the same

An increase in technology for producing personal computers leads to

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

After the sugar substitute saccharin was found to cause cancer in laboratory mice, its price dropped dramatically. This change in the price was because

What is the difference between a money price and a relative price? When the demand and supply model predicts that the price of coffee will rise, is the model predicting that the money price rises or the relative price rises?