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

Technological advancements have led to lower prices and an increase in the sale of color laser printers.How does this affect the market for traditional inkjet printers?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for coffee.What happens in this market if buyers expect the price of coffee to rise?

Figure 3-4 -Refer to Figure 3-4.At a price of $20,how many units will be sold?

What is the difference between a market equilibrium and a competitive market equilibrium?

Peanut butter and jelly are complements.If the price of peanut butter increases,the demand for jelly will increase.

According to the Australian Wool Innovation,severe drought conditions in Australia contributed to the lowest level of wool production in 50 years.This record low production has driven up prices sharply in Australian wool markets.Meanwhile,the price of raw cotton increased significantly for the first time in many years. a.Illustrate this observation with one demand and supply graph for the market for Australian wool and another demand and supply graph for raw cotton. b.Make sure that your graphs clearly show (1)the initial equilibrium before the decrease in the supply of Australian wool and (2)the final equilibrium. c.Use arrows to indicate any shifts in the demand and supply curves for each market. d.Label your graphs fully and write an explanation of your work.

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

Shrimp is an increasingly popular part of the American diet.Louisiana shrimpers who represent the bulk of the U.S.industry were almost all put out of business by Hurricane Katrina.How did the hurricane affect the equilibrium price and quantity of shrimp?

________ means the supply curve has shifted to the right,while ________ refers to a movement along a given supply curve in response to an increase in price.

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for laptop computers.Which panel best describes what happens in this market when the price of computer hard drives falls?

Holding everything else constant,an increase in the price of raisins will result in

Suppose that when the price of pickles decreases,Teddy increases his purchase of ketchup.To Teddy

Table 3-1 -Refer to Table 3-1.The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi)and the rest of the market.At a price of $6,the quantity demanded in the market would be

"Because Coke and Pepsi are substitutes,a decrease in the price of Pepsi will cause the demand for Coke to decrease.This initial shift in demand for Coke results in a lower price for Coke; this lower price will cause the demand curve for Coke to shift to the left." Which of the following correctly comments on this statement?

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

Technological advancements have led to lower prices and an increase in the sale of color laser printers.How does this affect the market for laser printer ink cartridges?

Assume that the price for lawn care has fallen and sales of lawn care services have also fallen.One can conclude that

Suppose a positive technological change in the production of disease-resistant corn caused the price of corn to fall.Holding everything else constant,how would this affect the market for wheat (a substitute for corn)?

Suppose that when the price of oranges decreases,Sarita decreases her purchases of peaches.To Sarita

Table 3-2 -Refer to Table 3-2.The table above shows the demand schedules for cashews of two individuals (Jordy and Amy)and the rest of the market.At a price of $6,the quantity demanded in the market would be