Exam 3: Supply and Demand

If in a competitive market the quantity supplied exceeds the quantity demanded, we expect prices to:

A farmer finds that when he produces more corn, he also has more cornstalks that he can sell as decorations. To the farmer, corn and cornstalks are:

An increase in supply is caused by:

An increase in demand for good X can be caused by a decrease in the price of X.

Good X and good Y are substitutes. Holding all other things constant, this means that when the price of good X increases, the:

Pizza is a normal good. If students' incomes at your college increase, the effect on pizza will be:

Which of the following is most likely to shift the supply of milk to the right?

Use the following to answer questions: Figure: Demand and Supply of Gasoline -(Figure: Demand and Supply of Gasoline) Look at the figure Demand and Supply of Gasoline. The initial equilibrium price and quantity (at intersection of S₁ and D) of gasoline are:

If people demand more of product A when the price of B falls, then A and B are:

An increase in supply with no change in demand will lead to _____ in equilibrium quantity and _____ in equilibrium price.

The market for soybeans is initially in equilibrium. Because of mad cow disease, producers decide to replace bone meal with soybeans in cattle feed. The likely effect is that:

A recent news story reported that the Organization of Petroleum Exporting Countries is expected to decrease the supply of oil next summer. Summer is traditionally a time of increased demand for oil because of vacation travel. What would be the combined effect of these two events on the summer market for gasoline?

Consider the supply curve for cotton shirts. An increase in the price of cotton will:

How would each of the following events affect the demand for new textbooks? I. The price of a used textbook rises. II. The price of college tuition rises. III. More high school graduates decide to attend college.

In much of the country, homeowners choose to heat their houses with either natural gas or heating oil. Which of the following would cause an increase in the demand for natural gas?

Use the following to answer questions : Figure: Supply and Demand in the Orange Juice Market -(Figure: Supply and Demand in the Orange Juice Market) Look at the figure Supply and Demand in the Orange Juice Market. The market is in equilibrium at point C. Suppose most people drink orange juice only with champagne. What will be the new equilibrium point in the orange juice market if a law banning alcohol passes?

Which of the following would shift the demand curve for new textbooks to the right?

Use the following to answer questions : Figure: Supply and Demand in the Orange Juice Market -(Figure: Supply and Demand in the Orange Juice Market) Look at the figure Supply and Demand in the Orange Juice Market. The market is in equilibrium at point C. A reputable scientist asserts in a major scientific publication that drinking orange juice will increase your life span. What will be the most likely new equilibrium point in the orange juice market?

In the market for tacos, each of the following shifts the supply curve to the left EXCEPT:

Which of the following would result in a movement along the demand curve?