Exam 3: Supply and Demand

Suppose the United States steps up efforts to combat drug trafficking and, with the aid of the Colombian military, destroys a significant percentage of cocaine crops.Predict the impact of increased drug interdiction on the market for cocaine in Los Angeles.

Assuming that Chinese food and Thai food are substitutes, if P.F.Chang's Chinese Restaurant reduces its prices:

There is an increase in both consumer income and in the price of jet fuel, an important resource used to produce air travel.If air travel is a normal good, how will these changes influence the price and quantity purchased of air travel? The price of air travel will (be) ____ and quantity purchased will (be) ____.

At the current price of good Y, there is a shortage.As a result, we would expect:

Which of the following will not increase the demand for iced tea?

Table 3-D Use the following information about demand and supply schedules to answer the question. Price \ 12 5 9 19 \ 10 8 12 17 \ 8 11 15 15 \ 6 13 18 13 \ 4 16 21 11 \ 2 18 24 9 -Refer to Table 3-D.If D₁ and S₁ represent the demand and supply schedules in a particular market, the equilibrium price and quantity are ____ and ____, respectively.

Figure 3-B -Refer to Figure 3-B.As a result of the decrease in donut prices at Yum Yum Donuts, Krispy Kreme managers discover that the demand for their donuts has:

Assuming that the demand and supply of a good have moved in opposite directions, but by the same amount, the new equilibrium would represent:

Figure 3-D -Refer to Figure 3-D.A change from Point A to Point E represents a(n):

There is an increase in demand for personal computers at the same time their input costs fall.We would expect that:

The law of demand illustrates a(n) ____ relationship between price and ____.

Which of the following is true of a competitive market?

Ceteris paribus, the fear among travelers created by the 9-11 attacks would have what impact on the market for air travel?

An increase in demand for a product and a reduction in the costs of production would:

Which of the following would cause a decrease in both the price and quantity of a good exchanged?

Which of the following would not cause an increase in the demand for cheese?

Ceteris paribus, if the market supply of a product decreases, then equilibrium quantity will (be) ____ and equilibrium price will (be) ____.

When quantity demanded decreases in response to a change in price:

A shift in the supply curve of bicycles resulting from higher steel prices will lead to:

Ceteris paribus, if the vacancy rate in an apartment complex increased from 5% to 20% over the past two years, we would expect to see