Exam 3: Supply and Demand

French fries and hamburgers are complements in consumption. Suppose the cost of the ingredients used to make hamburgers rises, so that the price of a hamburger rises. Then the equilibrium relative price of french fries _____ and the equilibrium quantity _____.

Use the following to answer questions : Figure: Shifts in Demand and Supply II -(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and Supply II. The figure shows how supply and demand might shift in response to specific events. Suppose vast new oilfields are discovered offshore of California and gasoline prices fall. Which panel BEST describes how this will affect the market for sport utility vehicles, a complement in consumption to gasoline?

Which of the following will NOT cause an increase in demand for good X?

Suppose there is an excess demand for water in Florida. This means that we can expect the price of water to increase in Florida over time.

A leftward shift of a supply curve is caused by:

The market for milk is initially in equilibrium. Milk producers successfully advertise to encourage milk drinking. At the same time, more milk producers enter the market. Standard demand and supply analysis tells us that:

Suppose the input costs associated with manufacturing hair replacement treatments decrease over time. This would lead to:

Consider two competing motorcycle manufacturers, Harley-Davidson and Honda. If Harley-Davidson raises the price of its motorcycles, we can expect:

Use the following to answer questions : Figure: Demand for Coconuts -(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If coconuts are a normal good and the income level of consumers falls, it will be represented in the figure as a movement from:

Which of the following statements is CORRECT?

Use the following to answer questions: Figure: The Supply of DVD Rentals -(Figure: The Supply of DVD Rentals) Look at the figure The Supply of DVD Rentals. A decrease in the price of DVDs sold by movie producers to rental stores would result in a change illustrated by the move from:

Use the following to answer questions : -(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.80, there is a monthly:

For consumers, pizza and hamburgers are substitutes. A rise in the price of a pizza causes _____ in the equilibrium price of a hamburger and _____ in the equilibrium quantity of hamburgers.

Good X and good Y are related. If the price of good X increases and the demand for good Y shifts left, these goods are:

Suppose the market for gasoline is in equilibrium. You have heard that the price of crude oil is falling because of new oil discoveries. You are also aware that the number of car and truck drivers is steadily rising. Knowing this, you predict that the price of gasoline will _____ and the quantity of gasoline bought and sold will _____.

In the local market for coffee, if Joyce's Java and Everyday Joe's coffee shops go out of business, the _____ curve shifts to the _____.

In the market for wheat, if the price of ethanol (which is made from corn, a substitute in production) increased dramatically, the _____ wheat would _____.

Suppose the equilibrium price of good X is $25 and the equilibrium quantity is 124 units. If the price of good X is $2:

Suppose oranges and clementines are considered to be substitutes. Holding everything else constant, if the price of oranges increases, then the demand for _____ will _____.

Use the following to answer questions : Figure: The DVD Rental Market -(Figure: The DVD Rental Market) Look at the figure The DVD Rental Market. If the rental price of DVDs rises from $5 to $7: