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 bicycle helmets. Which panel best describes what happens in this market if there is a substantial increase in the price of bicycles?

An increase in the demand for lobster due to changes in consumer tastes, accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster, will result in

Vineyards can grow either red wine grapes or white wine grapes on their land. Which of the following would cause the supply of red wine grapes to decrease?

Table 3-1 -Refer to Table 3-1. The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia) and the rest of the market. If the price of loose-leaf tea rises from $3 to $4, the market quantity demanded would

Apple's decision in 2002 to focus on developing a smartphone rather than a tablet computer exemplifies the

Farmers can raise either goats or ostriches on their land. Which of the following would cause the supply of goats to decrease?

Figure 3-6 -If, for a product, the quantity supplied exceeds the quantity demanded, the market price will fall until

If the price of beef jerky rises, the substitution effect due to the price change will cause

Which of the following is evidence of a shortage of chocolate?

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

An increase in the price of pineapples will result in

Figure 3-1 -Technological advances have resulted in lower prices for digital cameras. What is the impact of this on the market for traditional (non-digital) cameras?

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left, but the supply curve shifts more than the demand curve. As a result

All else equal, as the price of a product falls, the quantity supplied decreases.

In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is an inferior good. a. The population decreases and productivity increases. b. The income increases and the price of inputs increase. c. The number of firms in the market decreases and income decreases. d. Consumer preference decreases and the price of a complement increases. e. The price of a substitute in consumption increases and the price of a substitute in production increases.

In September, buyers of silver expect that the price of silver will rise in October. What happens in the silver market in September, holding all else constant?

An increase in the demand for peanuts due to changes in consumer tastes, accompanied by an increase in the supply of peanuts as a result of favorable growing conditions, will result in

Table 3-4 -Refer to Table 3-4. 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

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

Studies have shown that drinking one glass of red wine per day may help prevent heart disease. Assume this is true, and a fungal disease destroys a large portion of the grape harvest of California vineyards. In the market for red wine, these two developments would