ECO quiz 4

A ______________ is a group of buyers and sellers of a particular good or service.

market

Suppose that when income rises, the demand curve for computers shifts to the right. In this case, we know computers are

normal goods

When drawing a demand curve,

price is on the vertical axis and quantity demanded is on the horizontal axis.

When supply and demand both increase, equilibrium

price may increase, decrease, or remain unchanged

A market demand curve shows how the total quantity demanded of a good varies as

price varies

Which of the following would shift the supply curve for gasoline to the right?

An increase in the number of producers of gasoline

When the price of a good is higher than the equilibrium price,

sellers desire to produce and sell more than buyers wish to purchase

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

shortage to exist and the market price of roses to increase.

A technological advance will shift the

supply curve to the right

A shortage exists in a market if

the current price is below its equilibrium price.

Soup is an inferior good if

the demand for soup falls when income rises

Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.

Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

Individual demand curves are summed ________ to obtain the market demand curve.

Horizontally

If something happens to alter the quantity supplied at any given price, then

the supply curve shifts

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

Price would fall and the effect on quantity would be ambiguous.

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage and market price will likely rise in the future to eliminate the shortage.

True

When the market price is below the equilibrium price, the quantity of the good demanded exceeds the quantity supplied.

True

Whenever a determinant of supply other than price changes, the supply curve shifts.

True

A decrease in income will shift the demand curve for an inferior good to the right.

True

A decrease in supply will cause an increase in price, which will cause a decrease in quantity demanded.

True

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

True

In a competitive market, the quantity of a product produced and the price of the product are determined by

all buyers and all sellers.

When we move along a given supply curve,

all nonprice determinants of supply are held constant

Today, people changed their expectations about the future. This change

can affect today's demand

The line that relates the price of a good and the quantity demanded of that good is called the

demand curve, and it usually slopes downward

Which of the following events will definitely cause equilibrium price to fall?

demand decreases and supply increases

The unique point at which the supply and demand curves intersect is called

equilibrium

If the demand for a product decreases, then we would expect

equilibrium price and equilibrium quantity to both decrease

If the supply of a product increases, then we would expect

equilibrium price to decrease and equilibrium quantity to increase