Exam 3: Supply and Demand

Use the following to answer questions : Figure: The Demand and Supply of Wheat -(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply of Wheat. What is the equilibrium price in this wheat market?

"In 2008, air travel decreased substantially despite significant reductions in ticket prices." If this information is correct, it indicates that the law of demand did not apply to air travel in 2008.

Use the following to answer questions : Figure: Four Markets for DVDs -(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. If D₁ or S₁ is the original curve and D₂ or S₂ is the new curve, which of the graphs illustrates what may happen in the market for DVDs if there is an increase in the cost of a movie ticket at the local theater?

Use the following to answer questions : Figure: Shifts in Demand and Supply IV -(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose consumer incomes increase. Which panel BEST describes how this will affect the market for big-screen televisions, a normal good?

Which of the following best exemplifies the law of demand?

_____ illustrates an inverse relationship between price and quantity.

Researchers find a new strain of genetically modified seeds that results in a higher yield for corn producers. Holding all other things constant, this research will:

Apple and Samsung are large corporations that produce smart phones, the iPhone and the Galaxy, respectively. They are constantly trying through expensive advertising and product innovations to persuade customers to buy their brand. Is the smart phone market a competitive in the economic sense defined in Chapter 3? Why or why not?

If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price:

Why are economists so particular about the difference between an increase in quantity demanded and an increase in demand? Aren't they the same thing?

An increase in the price of sugar (an ingredient for soft drinks) and an increased concern about tooth decay caused by the consumption of soft drinks will result in which of the following in the soft drink market?

A decrease in supply with no change in demand will lead to _____ in equilibrium quantity and _____ in equilibrium price.

The market for lemonade is in equilibrium and the price of lemons rises. In the lemonade market _____ will _____, _____ the price and _____ the quantity.

Use the following to answer questions : -(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z. If the supply curve for good Z is linear, it can be expressed as:

A small private college increases tuition while a large public university in the same state does not. What will happen to the demand (enrollment) for both schools?

A decrease in the price of a good will result in:

Suppose that more police and security workers become aware that wearing bulletproof vests can protect them from injury and decide to start wearing bulletproof vests. At the same time, the price of ceramics used to produce the vests falls. The equilibrium price of bulletproof vests _____ and the equilibrium quantity produced _____.

If chicken and beef are substitutes, then a fall in the price of chicken will bring about:

The _____ tomatoes will decrease if fertilizer prices rise.

An inferior good is one for which a(n) _____ in buyers' income causes a(n) _____.