Exam 3: Supply and Demand

One result of the North American Free Trade Agreement was that the number of Canadian lumber companies selling in United States markets _____,causing a(n)_____ in the total market supply of lumber in the United States.

An increase in supply shifts the supply curve:

Which of the following choices correctly illustrates how changes in opportunity costs affect supply?

In the market for fertilizer,an:

Suppose a new study predicts that the price of hybrid cars is expected to decrease in the near future.As a result,we would expect:

In 2011,revolutions and uprisings spread across North Africa and the Middle East,where a lot of oil is pumped.How did this affect the oil market?

Figure: Lobster Market In the figure,a $10 tax is imposed on the market for lobsters.What is the market price that lobster producers would need to receive to induce them to produce 5,000 bushels of lobster per day?

If the price of ski lift tickets increases,the demand for ski lift tickets will increase.

A firm produces volleyballs and soccer balls.What happens to the supply of soccer balls if the market price of volleyballs increases?

Other things being equal,total consumer surplus falls when the market price rises.

Use the following to answer questions Figure: Supply Shift 2 -(Figure: Supply Shift 2)Refer to the figure.What would cause the supply curve to shift from S₁ to S₂?

A reduction in the expected future supply of a good will increase the demand for substitute goods today.

Which of the following choices contains only factors that cause the supply curve to shift to the right?

A technological innovation in the production of electronic goods causes the supply for electronic goods to increase.

A recent explosion in the demand for (and price of)organically produced foods has caused many farmers to convert from traditional farming methods to higher-cost organic farming methods.Explain what has happened to the opportunity cost of traditional farming and why.Based on your explanation,does it make sense to see so many farmers moving to organic farming? Explain.

Which of the following factors causes a decrease in supply?

NAFTA made it ______ for Canadian lumber producers to sell lumber in the United States,shifting the supply curve of lumber to the ______.

Consumer surplus can be defined as the net benefit to consumers from participating in a market.

Throughout 2005,average home prices in the United States soared to record highs.Clearly those individuals who were purchasing homes were paying more for them.But what about the people who were not buying homes? In particular,were people who did NOT own homes affected by this housing bubble? Explain.(Hint: What impact did this substantial increase in the price of owner-occupied housing have on the price of rental housing?)

Figure: Demand Curve Refer to the figure.What is the maximum price per book that buyers are willing to pay for 2,500 books?