AGBM 101 questions
competitive market price
a producer that chargers more than the ____ will relinquish sales to other producers in a market economy
inferior good
"my income increased because of a substantial raise; therefore I decreased my consumption of Spam". This statement best exemplifies the relationship between income and a ________
determinants of demand
"other things equal" assumption in the relationship between price and quantity demanded referred to as the
false
TRUE OR FALSE: a complementary good is one that is used in place of another good
true
TRUE OR FALSE: a decrease in consumers income would decrease the demand for a normal good
true
TRUE OR FALSE: the law of demand can be supported by the income effect
true
TRUE OR FALSE: the number of buyers in a market is a determinant of demand
false
TRUE OR FALSE: the resources market is the place where resources or the service of resources suppliers are produced
complementary
_____ goods are used together with other goods
private
_____ ownership of capital gives capitalism its name
a decrease in the number of buyers in a market
______ causes a decrease in demand
complementary
______ goods are used together with other goods
increase; right
a favorable change in consumer tastes and preferences for a product will ____ demand. illustrated as a shift of the demand curve to the ______
demand
a buyers intention or plans in regard to the purchase of a product in known as
a change in a determinant of demand other than price
a change in demand comes form a change in consumers minds because of
shift of; movement along
a change in demand is represented by a ____ the demand curve while a change in a quantity demanded is represented by a ____ the demand curve
price
a change in demand occurs due to a change in a consumers state of mind about purchasing a product that is based on something other than the ______ of the product
price
a change in quantity demanded caused by an increase or decrease in the _____ of the product under consideration and nothing else
Is not included in demand
a consumer who is willing but not able to purchase a good...
inverse relationship between price and quantity demanded for a product
a demand curve shows the plotted
independent
a vast majority of goods unrelated to one another are called ____ goods
quantity demanded; demand
an increase in the price of coke will change the _____ for coke while an increase in price of pepsi will change the _____ for coke
price of substitutes in production
all of the following are the determinants of demands except
market
an e-commerce site, gas station, local music store, and a farmers roadside stand are all examples of a _____
increase; reduce
an increase in the sales, property or any other tax will ____ production costs and ____ supply
a decrease; increase
an increases in business taxes causes ____ in supply and will ____ production costs
law of demand
an inverse or negative relationship between prices and quantity demanded is called the
negative
an inverse relationship between two variables is an ___ relationship
increases; decreases
in general, a rise in income causes a ____ in demand for more products and a fall in income causes a ______ in demand for most products, other things equal
resources
both land and labor would be bought and sold in the _____ market
willing and able to buy the good
in order to be reflected in the demand for a good, the consumer must be...
households spend income in the product market
in the circular flow model
firms
in the circular flow model, households sell resources to, and buy products from _____
regulatory; coordinating
competition in the ____ mechanism of the market system, where as the market system itself is the organizing and _____ mechanism
diminishing
consumers experience ____ marginal utility the more they consume of a particular good or service
product market
in which of the following markets do households buy the goods and services that businesses make available
the market demand curve for a good and service
for every good and service, the quantities demanded by individual consumers at every prices are added together to compute the following
by utilizing less resources and lowering costs
how do improvements in productive technology enable firms to produce more units of outputs
rises; fall
if prices for a good or service are expected to increases in the future, demand for that good or service will ___ today. If prices are expected to decrease in the future, demand will ____ today
lowers; increases
if the government subsidizes the production of a good, it in effect _____ the producers costs and _____ supply
decreases
if the price of hot dogs increases, the demand for hot dogs buns will _____
supply
improvements in technology is a determinant of _____
income
normal good and inferior goods refer to which determinant of demands
consumer
one of the determinants of demand is ____ expectations
increases
other things equal, as a buyers income rises, the willingness and ability to buy a normal product ____
rises
other things equal, as a buyers income rises, the willingness and ability to buy a normal product ______
decrease
other things equal, if consumers believe that the price of gas will fall next week, the demand of gas today will likely ______
increase
other things equal, if consumers believe that the price of gas will rise next week, the demand of gas today will likely ______
contracts
private property rights, coupled with the freedom to negotiate binding legal _____ enables individuals and businesses to obtain, use, and dispose of property resources as they see fit
the interaction between buyers and sellers
products and resource prices in a market system are determined by
inferior
products that have decreased demand when consumer incomes rise and increases demand when consumer incomes fall are called ____ goods
superior
products whose demand varies directly with changes in money or income are called normal or _____ goods
horizontal (x); vertical (y)
quantity demanded is illustrated on the ___ axis, while price is illustrated on the ____ axis
produce one or only a few goods and services
specialization is about an individual or firm using available resources too
factors other than the price of the product affect the amount of a product purchased
the "other things equal" assumption is important to the law of demand because
consumed at various possible prices
the concept of demand can be summarized by a schedule or curve showing the quantity of a product that would be
constant
the determinants of demand, other things equal, are assumed to be ___ when a demand curve is drawn or computed
purchase; sell
the function of the firms in the circular flow model is to ____ resources and ____ products
as the price falls; the quanitity demanded rises
the fundamental characteristics of demand, other things equal, is
rises
the fundamental characteristics of demand, other things equal, is that as the price falls, the quantity demanded for a product _____
product; resource prices
the interaction between buyers and sellers in a market system determine ____ and _____
a downward sloping curve
the inverse relationship between price and quantity demanded can be graphically illustrated by
related
the price of ____ good is a determinant of demand
an inverse relationship
the price of a new cars and the sales of new cars represent
businesses sell goods and services and households buy goods and services
the product marker is the place where
resource
the sale of farm equipment can take place both in the ____ market and the product market
partnership; sole partnership; corporation
the three main categories into which businesses fall are:
inverse
there is an _____ relationship between the price of good or service and the quantity demanded for that good or service
normal good
upon receiving substantial raise, I increased my monthly consumption of beef. This information best exemplifies the relationship between income and a _______
right; left
when a factor other than price affects consumption of a good or service, the demand curve can shift ___ or ___
subsidy
when the government provides financial assistance for the production of a good which lowers producers costs and increases supply. It is called a ________
decreases
when the price of a product falls, demand for its substitute will
decreases
when the price of a product falls, demand for its substitute will ______
increases
when the price of coke rises, the demand for pepsi will likely ______
increases
when the price of one product rises, the demand for its substitute will ______
businesses; product market; resource market; households
which of the following are components of the circular flow model
1) consumption is subject to diminishing marginal utility 2) a lower price increases the purchasing power of a buyers income. enabling a buyer to purchase more of a product 3) people ordinarily buy more of a product at a low price than at a high price 4) a higher price makes it more likely the consumer will substitute another good
which of the following are reasons for the inverse relationship between price and quantity demanded
pepsi and coke
which of the following are substitutes
a perfect competition, an economy's most highly competitive market
which of the following consists of a large number of independently acting buyers and sellers
all other things being equal, as price decreases, quantity demanded increases
which of the following describe the law of demand
an increase in demand for digital cameras over 35 mm cameras
which of the following exemplifies a change in buyers tastes
a decline in the price of chicken increases the purchasing power of consumer incomes, making chicken relatively more attractive than beef, lamb etc
which of the following exemplifies the substitution effect
1) an unfavorable change in consumer tastes 2) falling incomes and the products is a normal good 3) a decrease in the price of a substantial good
which of the following factors decrease demand for any good or service
as a result of increasing prices, Mr. Snow decides to buy fewer shovels during a snowy winter
which of the following illustrates a change in quantity demanded
hamburger buns
which of the following is a complement to hamburger patties
income
which of the following is a determinant of demand
an increase in the number of buyers
which of the following is likely to cause an increase in the demand for a good or service
no single buyer or seller can dictate the price of the product or resource because others can undercut the price
which of the following is true when there are many buyers and sellers acting independently in a market?
goods and services
which of the following is/are found in the product market
competition; personal reward; freedom of choice; and self interest
which of the following provide the opportunity and motivation for technological advances
as price on the vertical axis increases, quantity demanded on the horizontal axis remains unchanged
which of the following reasons is NOT an explanation for why the demand curves slopes downward and to the right
advanced technology
which of the following refers to the extensive use and rapid development of capital good in a market system
a decrease in consumers income would decrease for a normal good
which of the following statements is true
the price of a new pair of athletic shoes
which of the following would be determined in the product market
large-scale immigration from mexico
which of the following would increase the demand for more goods and services in the united states
a decrease in fertility rates
which of the following would most likely lead to a general decrease in demand
hot dogs and hamburgers
which pair exemplifies substitute goods