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

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for ramen noodles,an inferior good.Which panel describes what happens in this market as a result of an increase in income?

If the sales of carbonated sodas continue to decline as more cities impose soda taxes on these beverages,this will likely

A decrease in the price of inputs will cause the supply curve for a product to shift to the right.

When Toyota introduced its 2010 Prius,it announced that the average retail price of the 2010 model would be lower than the average retail price was for the equivalent 2009 model.Which of the following would explain the price differential?

A positive technological change will cause the quantity of a good supplied to increase.

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

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.If the price of cashews rises from $4 to $6,the market quantity demanded would

If pilots and flight attendants agree to wage and benefit reductions in the wake of the financial difficulties in the airline industry,what impact would this have on the supply and demand in the market for airline service,assuming no other changes take place in this market?

Which of the following would shift the supply curve for energy drinks to the left?

The income effect of a price change results in a

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.If the price of Kona coffee rises from $4 to $5,the market quantity demanded would

What is the Law of Demand.

Suppose that McDonald's successfully implements self-serve kiosks in their restaurants,and this investment in technology allows the company to reduce the number of employees at each location.All else equal,this technological improvement would ________ the equilibrium price for its products and ________ the equilibrium quantity consumed.

Suppose that when the price of ice cream increases,Liza decreases her purchase of hot fudge.To Liza

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

Last month,the Tecumseh Corporation supplied 400 units of three-ring binders at $6 per unit.This month,the company supplied the same quantity of binders at $4 per unit.Based on this evidence,Tecumseh has experienced

Figure 3-2 -Refer to Figure 3-2.A decrease in the number of firms in the market would be represented by a movement from

In July,market analysts predict that the price of gold will rise in August.What happens in the gold market in July,holding everything else constant?

The substitution effect explains why there is an inverse relationship between the price of a product and the quantity of the product demanded.

If the price of smartphones was to increase,then