chapter 3 quiz

A market is in equilibrium:

If the amount producers want to sell is equal to the amount consumers want to buy

The demand curve shows the relationship between:

Price and quantity demanded

In presenting the idea of a demand curve, economists presume the most important variable in determining the quantity demanded is:

The price of the product itself

If there is a shortage of product X, and the price is free to change:

The price of the product will rise

At the point where the demand and supply curves for a product intersect:

The quantity that consumers want to purchase and the amount producers choose to sell are the same

Suppose that corn prices rise significantly. If farmers expect the price of corn to continue rising relative to the other crops, then we would expect:

The supply to increase as farmers plant more corn

Productive efficiency refers to:

The use of the least-cost method of production

At equilibrium price:

There are no pressures to either rise or fall

An improvement in production technology will:

Shift the supply curve to the right

(Refer to the diagram) The equilibrium price and quantity in this market will be:

$1.00 and 200

Because of unseasonably cold weather, the supply of oranges has substantially decreased. The statement indicates the:

Amount of oranges that will be available at various prices has declined

In the past few years, the demand for donuts had greatly increased. This increase in demand might best be explained by:

A change in buyer tastes

If producers must obtain higher prices than before to produce a given level of output, then the following has occurred:

A decrease in supply

Of two goods are complements:

A decrease in the price of one will increase the demand for the other

A government subsidy to the producers of a product:

Increases product supply

College students living off-campus frequently consume large amounts of ramen noodles and boxed mac n' cheese. When they finish school and start careers, their consumption of both goods frequently declines. This suggests that ramen noodles and boxed mac n' cheese are:

Inferior goods

A market:

Is an institution that brings together buyers and sellers

(Refer to the diagram) A decrease in quantity demanded is depicted by a:

Move from point y to point x

(Refer to the diagram) An increase in quantity supplied is depicted by a:

Move from point y to point x

If an economy produces its most wanted goods but uses outdated production methods, it is:

Not achieving productive efficiency

The supply curve shows the relationship between:

Price and quantity supplied

The law of supply indicates that, other things equal:

Producers will offer more of a product at high prices than at low prices

Allocative efficiency is concerned with:

Producing the combination of goods most desired by society

(Refer to the diagram) A decrease in demand is depicted by a:

Shift from D2 to D1

(Refer to the diagram) A decrease in supply is depicted by a:

Shift from S2 to S1