Exam 3: Supply and Demand

In the following cases, explain what happens to demand or quantity demanded and how the change would be shown on a graph of the demand schedule. I. Assuming that tickets to an NFL game are normal goods, what is the effect of an increase in the incomes of NFL fans? II. Assuming that Direct TV and Dish satellite are substitutes, what happens if the price of a Direct TV subscription increases? III. Assuming that data plans and cell phones are complements, what happens if the price of data plans decreases?

An increase in _____ will have an ambiguous (uncertain) effect on price.

_____ manifests when the price of a good increases and the quantity demanded decreases

If demand decreases and supply increases, the direction of change in the equilibrium quantity is unpredictable unless the relative magnitudes of the demand and supply changes are known.

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. A temporary price of $4 in this market would result in a _____ of _____ bushels.

What is the difference between a shortage and scarcity?

Why do many clothing stores have big after-Christmas sales on their merchandise?

When the price of armchairs increases, the:

Equilibrium quantity will always increase if:

_____ illustrates a positive relationship between price and quantity.

Suppose the demand curve for good Z is downward-sloping. If the price of good Z decreases because of a shift in supply, this will cause:

Use the following to answer questions : Figure: Shifts in Demand and Supply III -(Figure: Shifts in Demand and Supply III) Look at the figure Shifts in Demand and Supply III. The figure 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?

Use the following to answer questions : Figure: Demand for Coconuts -(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If there is an increase in preference for coconuts, it will be represented in the figure as a movement from:

Use the following to answer questions : Figure: Supply of Coconuts -(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. If the prices of inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts increased, it would be represented in the figure as a movement from:

A negative relationship between the quantity demanded and price is called the law of:

A decrease in supply means:

When a market is in equilibrium, the quantity:

A shift of the demand curve for thin-crust pizza would NOT be caused by a change in:

Suppose the equilibrium price of good Y is $5 and the equilibrium quantity is 150 units. If the price of good Y is $12:

Use the following to answer questions: Figure: Shifts in Demand and Supply -(Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and Supply. The figure shows how supply and demand might shift in response to specific events. Suppose the population increases. Which panel BEST describes how this will affect the market for apples?