Econ 201- chapter 3 supply and demand

In the marketplace, what is a good that is used together with another good? An independent good A superior good A substitute good A complementary good

A complementary good

Which of the following statements are true? A decrease in consumers' income would decrease the demand for an inferior good. A decrease in consumers' income would decrease the demand for a normal good. An increase in consumers' income would decrease the demand for a normal good. An increase in the price of a normal good would decrease the quantity demanded of the good.

A decrease in consumers' income would decrease the demand for a normal good. An increase in the price of a normal good would decrease the quantity demanded of the good.

Which of the following would most likely lead to a decrease in demand? An increase in the number of buyers A decrease in the number of buyers An aging population A large-scale immigration

A decrease in the number of buyers

Which of the following would likely increase the demand for a normal good? (Check all that apply.) An increase in the price of the good A decrease in the price of complementary goods An increase in the number of buyers A decrease in consumer income

A decrease in the price of complementary goods An increase in the number of buyers

Which of the following exemplifies a change in buyers' tastes? A decrease in national income because of a recession. An increase in demand for digital cameras over 35mm cameras. A decrease in the average price of gasoline during the winter. An increase in the number of buyers in a market.

An increase in demand for digital cameras over 35mm cameras.

Which of the following causes consumers to buy large quantities of a product at each possible price? Multiple choice question. A decrease in the price of a substitute good An increase in the number of buyers An unfavorable change in consumer tastes An increase in the price of a complementary good

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? An increase in income and the good is inferior An increase in the price of a complementary good An increase in the number of buyers An increase in the number of sellers

An increase in the number of buyers

According to the law of demand, which of the following statements are true, all other things being equal? Multiple select question. As price increases, quantity demanded increases. As price decreases, quantity demanded decreases. As price increases, quantity demanded decreases. As price decreases, quantity demanded increases.

As price increases, quantity demanded decreases. As price decreases, quantity demanded increases.

Which of the following types of goods affect the demand for another product due to a change in their price? (Select all that apply) Inferior goods Normal goods Complementary goods Substitute goods

Complementary goods Substitute goods

Which of the following are determinants of demand? Consumer tastes Prices of related goods Consumer income Resource prices Number of buyers Consumer expectations Corporate taxes and subsidies

Consumer tastes Prices of related goods Consumer income Number of buyers Consumer expectations

The ___ incurred by firms when producing a good or service arise from the prices of the inputs that are used to produce said good or service. Multiple choice question. marginal product of labor costs of production negative externality losses

Cost of production

True or false: A change in supply is represented by a movement along the curve, not a shift of the curve. True false question. True False

False

______ resource prices raise production costs and, assuming a fixed product price, ______ profits. Multiple choice question. Higher; higher Higher; reduce Lower; higher Lower; reduce

Higher; reduce

Which exemplifies a pair of substitute goods? CDs and CD players Hot dogs and hamburgers Golf balls and golf clubs Snow boards and lift tickets

Hot dogs and hamburgers

Which of the following affects the demand for normal goods and inferior goods? The number of buyers Technology Income Price of related goods Consumer expectations

Income

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? Multiple choice question. Independent goods Superior goods Substitute goods Complementary goods

Independent goods

Which of the following exemplify a decrease in the demand for goods due to a decrease in the number of buyers? People retiring and leaving the cities where they worked People moving into a new subdivision with luxury homes People leaving the small towns where they grew up to look for job opportunities People graduating from high school and accepting jobs instead of going to college

People retiring and leaving the cities where they worked People leaving the small towns where they grew up to look for job opportunities

Which of the following are the characteristics of a competitive market? Standardized products A large number of buyers but small number of sellers A surplus of narrow range of products A large number of buyers and sellers

Standardized products A large number of buyers and sellers

Which of the following are determinants of supply? (Check all that apply.) Multiple select question. Taxes and subsidies Resource prices Technology Consumer expectations

Taxes and subsidies Resource prices Technology

What is the price where the intentions of buyers and sellers match? Multiple choice question. The equilibrium quantity The equilibrium price The surplus price The inferior price

The equilibrium price

Which are reasons for changes in buyer tastes? The introduction of products The results of health studies The development of new technology The stability of existing markets

The introduction of products The results of health studies The development of new technology

True or false: The law of demand can be supported by the income effect. True False

True

True or false: When the price of one product rises, the demand for its substitute will increase. True False

True

In general, what goals does the improvement of production techniques help companies to achieve? Multiple select question. Reduce employee productivity Use fewer resources per unit of output Lower production costs Increase supply

Use fewer resources per unit of output Lower production costs Increase supply

Which of the following illustrates the relationship between a good and its complement? Multiple select question. When the price of hamburger decreases, the demand for hot dogs decreases. When the price of tuition decreases, the demand for textbooks increases. When the price of lettuce increases, the demand for salad dressing decreases. When the price of Nikes increases, the demand for Reeboks increases.

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

The inverse relationship between price and quantity demanded can be graphically illustrated by ______. an upward sloping curve a horizontal line a vertical line a downward sloping curve

a downward sloping curve

The supply curve is ______ sloping curve. Multiple choice question. a horizontal a negative a downward an upward

an upward

The concept of demand can be summarized by a schedule or curve showing the quantity of a product that would be ______. consumed at various possible prices subsidized at various possible prices produced at various possible prices given away at only one price

consumed at various possible prices

Consumers experience ______ marginal utility the more they consume of a particular good or service. diminishing increasing additional constant

diminishing

Consumers will only buy additional units of a good if the price of the good is reduced is an example of ______. diminishing marginal returns diminishing marginal utility the ceteris paribus assumption increasing marginal utility

diminishing marginal utility

According to the law of supply, price and quantity supplied have a(n) ______ relationship. Multiple choice question. direct inverse negative exponential

direct

The _________ output is the quantity at which quantity demanded equals quantity supplied in a competitive market. (Enter one word in the blank.)

equilibrium

The interaction between buyers and sellers determines the equilibrium price and the ________ quantity. (Answer in one word.)

equilibrium

At the market __________ price, quantity demanded equals _________quantity . (Enter one word in each blank.)

equilibrium, supplied

Changes in ______ about the future price of a product may affect the producer's current willingness to ______ that product. Multiple choice question. expectations; supply expectations; purchase supply; demand sentiments; demand

expectations; supply

True or false: An increase in the sales, property or any other tax will decrease production costs and increase supply. True false question. True False

false

Which of the following is likely to cause an increase in the demand for a good or service? An increase in the number of sellers An increase in the price of a complementary good An increase in the number of buyers An increase in income and the good is inferior

increase of the number of buyers

A favorable change in consumer tastes and preferences for a product will _________demand, shifting the demand curve to the _______(right/left).

increase, right

Greater resource prices _______ the costs of production, thereby, ______ the incentive for firms to produce the good at each price. Multiple choice question. decreases; raising increases; reducing increases; raising decreases; reducing

increases; reducing

Government subsidies of the production of a good has the effect of ______. Multiple choice question. minimizing supply reducing demand increasing supply

increasing supply

The vast majority of goods that are not related to one another are called ______ goods. independent substitute complementary dependent

independent

A demand curve shows the ______. positive relationship between price and quantity demanded for a product positive relationship between price and quantity supplied for a product inverse relationship between price and quantity supplied for a product inverse relationship between price and quantity demanded for a product

inverse relationship between price and quantity demanded for a product

On a simple supply model, a change in quantity supplied is illustrated by a ______ and a change in supply is illustrated by a ______. Multiple choice question. shift of the supply curve; movement along the supply curve movement along the supply curve; shift of the supply curve shift of the demand curve; shift of the supply curve

movement along the supply curve; shift of the supply curve

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 direct positive equal negative

negative

Upon receiving a substantial raise, Jessie increased her monthly consumption of beef. This information best exemplifies the relationship between income and a(n) ______. inferior good normal good

normal good

As people's income increases, the demand for ______ goods goes up but the demand for ______ goods goes down. inferior; superior normal; inferior normal; superior inferior; normal

normal; inferior

The determinants of the supply of a good are any factors other than the product's ______ that cause the supply curve of the good to shift. Multiple choice question. price cost

price

If prices for a good or service are expected to increase in the future, the demand for that good or service will ______ today. If prices are expected to decrease in the future, demand will ______ today. Multiple choice question. rise; not change fall; fall rise; rise fall; rise rise; fall

rise; fall

The law of supply states that as price ______, the quantity supplied (Qs) rises; as price ______, the quantity supplied falls. Multiple choice question. rises; rises falls; rises falls; falls rises; falls

rises; falls

When a product's demand varies directly with money income, it is considered a(n) ______ good. superior complementary abnormal inferior

superior

Which of the following specifically refers to demand? Both the buyer and seller sides of any market The buyer side of any market The seller side of any market The producer side of any market

the buyer side of the market

True or false: Resource costs or changes in the costs of production are responsible for shifts of the supply curve. True false question. True False

true

True or false: When the price of one product rises, the demand for its substitute will increase. True false question. True False

true

Diminishing marginal ______ states that, in any specific time period, buyers will derive less satisfaction from each additional unit of the product consumed. demand returns incentives utility

utility

Which exemplifies a pair of complementary goods? A Toyota truck and a Ford truck A hot dog and relish Home Depot and Lowe's

A hot dog and relish

In the marketplace, what is a good that can be used in place of another good called? A substitute good An inferior good A superior good A complementary good

A substitute good

Which statement about demand and supply is true? An increase in consumer income shifts the demand curve to the left. An increase in the price of a good is likely to decrease the supply of the good. An increase in the price of a good shifts the supply curve to the left. An increase in consumer income is likely to increase the demand for a normal good.

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

Which of the following factors increase the demand for any good or service? Multiple select question. An increase in the price of a substitute good A rise in consumer income if the product is a normal good Consumer expectations that either prices or income will fall in the future An increase in the number of buyers An unfavorable change in consumer tastes for the product

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

Which of the following does not exemplify an improvement in technology affecting supply? Multiple choice question. The introduction of the mass-assembly line Invention of new vaccines Increased subsidies to farmers for producing more corn Advances in producing flat panel computer monitors that have greatly reduced their cost

Increased subsidies to farmers for producing more corn

Which of the following would increase the demand for goods and services in the United States? Large-scale immigration A decline in the number of older people A fall in national income A decrease in the rate of population growth

Large-scale immigration

Other things equal, which of the following is correct regarding increasing the number of sellers in an industry? Multiple choice question. The quality of products increases The market supply becomes greater The supply curve shifts to the left. More firms will leave the industry

The market supply becomes greater

The willingness and ability of a consumer to buy a normal product falls because of ______. a rise in income a raise in wages no change in income a fall in income

a fall in income

Which of the following refers to government financial assistance for the production of a good which lowers producers' costs and increases supply? Multiple choice question. A subsidy A tax A bailout A loan

a subsidy

he law of demand is consistent with common sense because people ordinarily ______. do not change buying patterns based on price buy more at a low price buy less at a low price buy more at a high price

buy more at a low price

One of the determinants of demand is ______ expectations. Multiple choice question. input price consumer supply producer

consumer

An increase in business taxes causes a(n) ______ in supply and will ______ production costs. Multiple choice question. decrease; increase increase; decrease increase; increase decrease; decrease

decrease; increase

A change in the number of buyers is a determinant of market _____.

demand

Consumer expectations are a determinant of ______.

demand

The inverse, or negative, relationship between price and quantity demanded is known as the law of ______. diminishing returns demand increasing opportunity costs supply

demand

Changes in ______ about the future price of a product may affect the producer's current willingness to ______ that product. Multiple choice question. sentiments; demand expectations; supply supply; demand expectations; purchase

expectations; supply

Producer expectations refer to firms' expectations of ______ for a good or service that they produce. Multiple choice question. life-cycle resource availability future prices

future prices

Which of the following is a determinant of demand? Technology Income Resource prices Producer expectations

income

The prices of the _________ (one word) used in the production process help determine the costs of production incurred by firms.

resources

A ______ the demand curve represents a change in demand while a ______ the demand curve represents a change in the quantity demanded. Multiple choice question. movement along; shift of rotation of; movement along rotation of; shift of shift of; movement along

shift of; movement along

The supply curve measures quantity ______ on the horizontal axis and ______ on the vertical axis. Multiple choice question. demanded; price supplied; price price; demanded price; supplied

supplied; price

Improvements in technology is a determinant of ______. Multiple choice question. quantity supplied supply demand quantity demanded

supply

Market __________ is a schedule or curve showing the various amounts of a product that producers are willing and able to make available for sale at each possible price during a specific period.

supply

Producer expectations of future prices are a determinant of __________(one word).

supply

The number of sellers or competitors in a market is a determinant or shifter of the ___________ (one word) curve.

supply

The prices of substitute goods in production is a determinant of ___________

supply

How do improvements in productive technology enable firms to produce more units of output? Multiple choice question. By utilizing fewer resources, thereby raising costs By utilizing fewer resources, thereby lowering costs By utilizing more resources, thereby lowering costs By utilizing more resources, thereby raising costs

By utilizing fewer resources, thereby lowering costs

Which of the following statements correctly describes the relationship between the price and quantity demanded of a good or service? Holding all else constant, as price increases, quantity demanded increases and as price decreases, quantity demanded increases. Holding all else constant, as price increases, quantity demanded increases and as price decreases, quantity demanded decreases. Holding all else constant, as price increases, quantity demanded decreases and as price decreases, quantity demanded increases. Holding all else constant, as price increases, quantity demanded decreases and as price decreases, quantity demanded decreases.

Holding all else constant, as price increases, quantity demanded decreases and as price decreases, quantity demanded increases.

Which of the following are substitutes? Peanut butter and crackers Bleach and cheese Guns and bullets Pepsi and Coca-Cola

Pepsi and Coca-Cola

Which of the following has the greatest effect on the quantity supplied? Multiple choice question. Positive technological changes Tastes and preferences Price Cost

Price

Which of the following has the greatest effect on the quantity supplied? Multiple choice question. Tastes and preferences Price Positive technological changes Cost

Price

An unfavorable change in consumer tastes and preferences for a product will ______ demand, which is illustrated as a shift of the demand curve to the ______. increase; right decrease; right decrease; left increase; left

decrease; left

If the birthrate increases, the purchase of baby products is likely to ______. increase stay the same decrease

increase

In general, a firm will ____________(increase/decrease) the output of a good or service if the price of the good is rising.

increase

Other things equal, if consumers believe that gas prices will rise in a week, the demand for gas today will ______. be lower than next week not change increase decrease

increase

Suppose Coke and Pepsi are substitutes. When the price of Coke rises, the demand for Pepsi is likely to ______. increase decrease stay the same

increase

The ______ is consistent with common sense because people ordinarily do buy more of a product at a lower price. law of supply budget line law of demand law of one price

law of demand

Diminishing marginal utility states that less satisfaction is derived from each successive unit of a product consumed. Therefore, the law of demand is upheld because, as each successive unit yields ______, consumers will buy additional units only if the price of those units is progressively ______. more and more utility; reduced more and more utility; increased less and less utility; reduced less and less utility; increased

less and less utility; reduced

If costs of production rise, the producer has an incentive to produce _________ (one word) output.

lower

The income effect indicates that a ______ price increases the purchasing power of income, enabling consumers to purchase ______ of a product and vice versa. lower; less higher; more higher; less lower; more

lower, more

If the government of a country subsidizes the production of a good, it: Multiple select question. increases the cost of production. reduces supply. lowers the cost of production. increases supply.

lowers the cost of production. increases supply.

If the government subsidizes the production of a good, it in effect ______ the producers' costs and ______ supply. Multiple choice question. raises; increases lowers; decreases raises; decreases lowers; increases

lowers; increases

Other things equal, firms will produce and offer for sale ______ of their product at a high price than at a low price. Multiple choice question. more the same amount less none

more

The supply curve illustrates the relationship between ______. Multiple choice question. price and quantity supplied cost and price product and quantity supplied price and quantity demanded

price and quantity supplied

The determinant of supply dealing with alternative products that can be produced by firms is called ______. Multiple choice question. producer expectations number of producers or competitors in a market resource prices price of substitutes in production taxes and subsidies

price of substitutes in production

The price of ______ goods is a determinant of demand. intermediate independent inexpensive producer related

related