Exam 3: Supply and Demand: Theory

Suppose that for a given good demand increases and supply increases at the same time.If demand increases by a lesser amount than supply increases,then equilibrium price __________ and equilibrium quantity __________ for that good.

A change in price will lead to a change in __________ and to a change in __________,while a change in preferences will lead to a change in __________ and a change in the prices of relevant resources will lead to a change in __________.

Consumers' surplus is the difference between the maximum price the buyer is willing and able to pay for a good and the actual price paid.

Exhibit 3-4 -Refer to Exhibit 3-4.If this is a competitive market,price and quantity will gravitate toward

An advance in technology in the production of good X causes

A shortage in the bread market can cause the price of bread to rise.

An economist says,"Technological advances have the power to lower the prices of many of the goods we buy." Here is how this works:

Which of the following is an example of a service?

Exhibit 3-10 -Refer to Exhibit 3-10.300 units of X will be exchanged in this market if the price is

Exhibit 3-1 -Refer to Exhibit 3-1.At a price of $6 there is a

In year 1 the price of good X is $10 and 100 units are bought and sold.In year 2 the price of good X is $13 and 230 units are bought and sold.What can explain this?

The law of demand states that price and ______________ are _____________ related,ceteris paribus.

Exhibit 3-5 -Refer to Exhibit 3-5.In the market shown,a rightward shift in supply from S₁ to S₂ could have been caused by

When Hurricane Katrina hit the Gulf Coast of the United States in 2005 it destroyed 5,000,000 acres of timber.Given that lumber is timber that has been sawed or split into planks and boards,explain in terms of supply and/or demand how the hurricane impacted each of the following markets (be sure to note the expected resulting impact on equilibrium price and quantity): a.Domestic lumber b.Imported lumber c.New home construction

Consider a point on a market demand curve.The point represents

When P = $65,the quantity demanded of a good is 80 units,and the quantity supplied of the good is 40 units.For every $10 increase in the price of this good,quantity demanded falls by 10 units and quantity supplied rises by 10 units.The equilibrium price of this good is ___________and the equilibrium quantity of this good is _________ units.

Suppose Smith wants one iPhone no matter what the price is between $0 and $350,Jones wants one iPhone no matter what the price is between $0 and $200,and Griffith wants one iPhone no matter what the price is between $0 and $450.In this case,each individual buyer's demand curve will be __________________ and the market demand curve will be __________________.

Explain the difference between a change in supply and a change in quantity supplied.Be sure to state what causes each to change and how they differ when graphed.

The price of X was $10 in year 1 and $14 in year 2.Which of the following could be the correct reason for the rise in price?

Exhibit 3-10 -Refer to Exhibit 3-10.$20 is the