Ch 3 Learnsmart

The consumers willingness to purchase any market must be supported by the ability to make the purchase as evidenced by

The necessary dollars

All competitive markets involved which of the following?

demand, supply, quantity, price

The interaction between buyers and sellers determines the equilibrium price and the ___ quantity

equilibrium

If a decline in demand is greater than an increase in supply, the equilibrium quantity will ______.

fall

If a decrease in demand is greater than a decrease in supply, equilibrium price will ______.

fall

A decrease in supply while holding demand constant results in a(n) ______ in equilibrium price, and a(n) ______ in equilibrium quantity.

increase,decrease

Government subsidies of the production of a good has the effect of ______.

increasing supply

What are two goods called when a change in the price of one good has little or no effect on the demand for the other?

independent goods

What law is consistent with common sense because people ordinarily do buy more of a product at a lower price?

law of demand

An increase in supply while holding demand constant ______ equilibrium price and ______ equilibrium quantity.

lowers; raises

The equilibrium price where the quantity demanded equals the quantity supplied is otherwise known as the

market clearing price

A decrease in demand while holding supply constant ______ equilibrium price and ______ equilibrium quantity.

reduces; reduces

Inferior goods

Goods whose demand varies inversely with money and income

Which statement about demand and supply is true?

An increase in consumer income is likely to increase the demand for a normal good.

Which of the following correctly state the effects on equilibrium price and quantity due to an increase in demand, while holding everything else constant?

3-D televisions become popular, therefore the equilibrium price and quantity increase. Consumers expect the price of shrimp to increase in the future, therefore the equilibrium price and quantity increase now. The price of Coke increases due to Coke's popularity, therefore the equilibrium price and quantity of Pepsi increase.

Which of the following are the characteristics of a competitive market?

A large number of buyers and sellers, standardize products.

Which of the following factors increase the demand for any good or service?

A rise in consumer income if the product is a normal good An increase in the price of a substitute good An increase in the number of buyers

Which of the following best describes why a surplus would not persist for very long?

A surplus prompts sellers to lower the price to encourage buyers by increasing the incentive to buy.

Which of the following are examples of a market?

A weekend farmers market, eBay, a pay to play online gaming site

Which of the following would result in a change in supply?

An increase in the excise tax on cigarettes An increase or decrease in wages An increase in the number of shoe stores at the local mall

Which of the following causes consumers to buy larger quantities of a product at each possible price?

An increase in the number of buyers.

Which of the following types of goods affect the demand for another product due to a change in the price?

Complementary and substitute goods

The determinants of demand, other things equal, I seem to be blank want to demand curve is drawn or computed

Constant, and changed, fixed

Consumers only buy additional units of a good at the price of the good is reduced is an example of

Diminishing marginal utility

Which of the following shows the effects on equilibrium price and quantity due to an increase in supply and a simultaneous decrease in demand?

Equilibrium price falls and the change in equilibrium quantity is indeterminate.

The other things equal assumption is important in the law of demand because

Factors in addition to price affect the amount of a product purchased

Which of the following would likely increase the demand for A normal good?

Increase in the number of buyers, A decrease in the price of complementary good

Which of the following does not exemplify an improvement in technology affecting supply?

Increased subsidies to farmers for producing more corn

Substitution effect

Indicates that buyers will tend to avoid purchasing one product in favor of a less expensive alternative

Products that have decreased demand when consumer incomes rise and increased demand when consumer incomes fall are called

Inferior goods

Which of the following would increase the demand for goods and services in the United States?

Large scale immigration

The relationship between the price of a good or service and the quantity demanded of that good or service described by the law of demand is

Negative

Which of the following exemplify a decrease in the demand for goods due to a decrease in the number buyers?

People leaving the small towns with the group to look for a job at opportunities, people retiring and leaving the cities where they worked.

The determinants of demand for a product of factors, other than the blank, that affect consumption her buyers decisions to purchase and consume.

Price of the product

In which of the following situations do governments intervene to prevent prices from rising above or falling below their equilibrium levels?

Prices are too low for firms. Prices are too high for consumers.

Sellers are blank of a product, where as buyers are blank who use or consume the product.

Suppliers, demanders

Market demand

The aggregate of all quantities demanded by individual consumers

Which of the following specifically refers to demand?

The buyer side of any market

Which of the following curves shows the quantities of a product that will be purchased at various possible prices, other things equal?

The demand curve

What determines market price and equilibrium output in a market?

The interaction of buyers and sellers

Other things equal, the amount of a product that will be purchased at various possible prices as shown by

demand

What does allocative efficiency refer to?

The particular mix of goods most highly valued by society

Substitute goods and complementary goods refer to which determinate of demand?

The price of related good

Which of the following does not shift the supply curve?

The price of the product itself

Which of the following are reasons for changes and buyers taste?

The results of health studies, the development of new technology, the introduction of products.

Which of the following illustrates the relationship between a good and its complement?

When the price of tuition decreases, the demand for textbooks increases. When the price of lettuce increases, the demand for salad dressing decreases.

A decrease in demand while holding supply constant results in _______.

a decrease in both equilibrium price and quantity

The effects on equilibrium price and quantity due to an increase in supply and a simultaneous decrease in demand are shown by ______.

a decrease in equilibrium price and an indeterminate change in equilibrium quantity

Which of the following statements are true?

an increase in the price of a normal good with decrease the quantity demanded a good, a decrease in consumers income would decrease the demand for a normal good

The inverse relationship between price and quantity demanded reflects diminishing marginal utility, the substitution effect, and the blank effect.

blank=income

When the price of a product falls, demand for its substitute will

decrease

An increase in business taxes causes a(n) ______ in supply and will ______ production costs.

decrease, increase

Which of the following is the most important factor for a producer in determining how much of a product to produce?

price

The production of a good or service in the least costly way is known as ______ efficiency.

productive

If the decrease in the supply of a good is greater than the decrease in the demand for the good, the equilibrium price will ______.

rise

When each additional worker of a firm produces less additional output than previously added workers, then the marginal cost of additional units of output ______.

rises

Which of the following refers to government financial assistance for the production of a good which lowers producers' costs and increases supply?

subsidy

Firms that produce a particular product can sometimes use their facility to produce an alternative product; therefore, when the price of the alternative good increases, the producer may switch to that alternative good in order to increase profits. This decision is called ______.

substitution in production

When a product's demand varies directly with money and income, it is considered

superior or normal good

The ______ of a good or service by a producer essentially reflects the marginal cost of producing the good or service.

supply

A demand blank organizes the relationship between price and quantity any tabular format , Whereas the demand blank is a graphical representation of this relationship.

table, curve

We obtain the market supply curve by "HORIZONTALLY adding" the supply curves of the individual producers.

true

Farmers anticipating an increase in the price of wheat are likely to ______ some of their current harvest, causing a(n) ______ in current supply.

withhold; decrease