Exam 3: Demand and Supply

Use the following to answer question(s): The Supply of Music Downloads -(Exhibit: The Supply of Music downloads) A decrease in the number of websites supplying music downloads would result in a change illustrated by:

Use the following to answer question(s): Demand and Supply -(Exhibit: Demand and Supply) If the equilibrium price fell to $2 because of a shift to the left of the demand curve, the quantity supplied would be:

Use the following to answer question(s): Demand and Supply-Determinants -(Exhibit: Demand and Supply-Determinants) The exhibit shows how supply and demand might shift in response to specific events.Suppose the technology for producing automotive gasoline improves.Which panel best describes how this will affect the market for gasoline additives, a complement of automotive gasoline?

Use the following to answer question(s): Demand and Supply Shifters -(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events.Suppose the Surgeon General announces that eating chocolate prevents heart disease.Which panel best describes how this will affect the market for chocolate?

A shift to the left of a supply curve is caused by:

Use the following to answer question(s): Demand and Supply Curves -(Exhibit: Demand and Supply Curves) A surplus of 200 units will occur at a price of ________ and a shortage of 200 units will occur at a price of ________.

Which of the following will not cause the demand for milk (a normal good) to increase in the current time period?

Given that milk and cookies are complements, suppose the price of flour (an ingredient in cookies) rises.What happens in the market for cookies?

If the price of hamburger increases, it would probably result in ________ in the demand for hamburger buns.

Use the following to answer question(s): The Market for Chocolate-Covered Peanuts -(Exhibit: The Market for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is 60 cents, the price will:

Given that milk and cookies are complements, suppose the price of flour (an ingredient in cookies) rises.What happens in the market for milk?

If the current price is less than the market clearing or equilibrium price, we would expect:

If the price of a commodity increases as the result of increased demand, you would expect the:

Researchers demonstrate conclusively that drinking 4-6 ounces of ginger ale each day increases life expectancy by 3 years.What happens in the market for ginger ale?

Use the following to answer question(s): Demand Shifters and Supply Shifters -(Exhibit: Demand Shifters and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events.Suppose a spring frost destroys one-third of the nation's artichoke crop.Which panel best describes how this will affect the market for mayonnaise, which is a complement to artichokes?

Consumer preferences are a demand shifter.

Use the following to answer question(s): The Market for Music Downloads -(Exhibit: The Market for Music Downloads) An increase in buyers' income, assuming music downloads are a normal good, would result in a change illustrated by the move from:

A decrease in the price of a good will result in a decrease in supply.

The law of demand is illustrated by a demand curve that is:

Describe what would happen in a market if the current price were above the equilibrium price (assume no government interference).Using the same assumptions, describe what would happen if the current price were below the equilibrium price.Use a graph to explain your answer.