Exam 3: Demand, Supply, and Market Equilibrium

An electronics manufacturer can produce either MP3 players or cell phones. As the result of a decrease in the price of cell phones, the firm produces more MP3 players and fewer cell phones. An economist would explain this by saying

Refer to the information provided in Figure 3.13 below to answer the questions that follow. Figure 3.13 -Refer to Figure 3.13. Assume hamburgers and hot dogs are substitutes. An increase in the price of hot dogs will cause a movement from

Suppose the demand for lawnmowers goes down when the price of gasoline goes up. We can say that these two goods are

An increase in the price of a good or service leads to a(n) ________ that leads to a(n) ________.

Pineapples and kumquats are substitute goods. Exceptional weather in Guatemala resulted in a bumper crop of pineapples. Ceteris paribus

Mary Kay Ash was one of the first individuals who sold cosmetics directly to customers via independent sales representatives. The company founded by Mary Kay is now one of the largest and most successful cosmetics companies in the world. Mary Kay Ash would be classified as a(n)

Refer to the information provided in Figure 3.5 below to answer the questions that follow. Figure 3.5 -Refer to Figure 3.5. If consumer income decreases, the demand for chili peppers shifts from D₀ to D₁. This implies that chili peppers are a(n)

When there is a surplus of a product in an unregulated market, there is a tendency for

Refer to the information provided in Figure 3.14 below to answer the questions that follow. Figure 3.14 -Refer to Figure 3.14. At a price of $30, there is an excess

Refer to the information provided in Figure 3.14 below to answer the questions that follow. Figure 3.14 -Refer to Figure 3.14. If this market is unregulated and the price is currently $30, you would expect that the price of sunglasses would

The change in the price of a good leads to a change in ________, which leads to a ________.

Refer to Scenario 3.1 below to answer the questions that follow. SCENARIO 3.1: Rented DVDs and movies shown in theaters are substitutes. Rented DVDs and plasma TVs are complements. Plasma TVs and movies shown in theaters are normal goods. People watch rented DVDs more often in the winter than in the summer. -Refer to Scenario 3.1. Most plasma TVs sold in the United States are imported from Japan. If the United States government reduces the number of plasma TVs that can be imported into the United States, ceteris paribus, what would happen?

Refer to the information provided in Table 3.1 below to answer the questions that follow. Table 3.1 -Refer to Table 3.1. If the price per pizza is $12, the price will

Refer to the information provided in Figure 3.5 below to answer the questions that follow. Figure 3.5 -Refer to Figure 3.5. If consumer income increases, the demand for chili peppers shifts from D₀ to D₁. This implies that chili peppers are a(n)

Which of the following will definitely occur when there is a simultaneous increase in demand and an increase in supply?

According to the law of ________, there is a positive relationship between price and ________.

During an economic upturn when consumer income rises, the demand for caviar increases and the demand for hummus decreases. This implies that caviar

Refer to the information provided in Figure 3.19 below to answer the questions that follow. Figure 3.19 -Refer to Figure 3.19. The market is initially in equilibrium at Point B. If supply shifts from S_{2 to} S₁, the equilibrium price will change from ________ and the equilibrium quantity will change from ________.

If price is above the equilibrium, then quantity supplied will be greater than quantity demanded, putting downward pressure on price.

If the demand for green tea increases as income increases, green tea is a(n)