Econ 2302 SB 2

increase the quantity of hours the student would serve.

Ceteris paribus, if a student could either earn money tutoring or working as a server in a restaurant, then increases to the wages paid for serving will

a decrease in the quantity demanded of digital cameras.

Ceteris paribus, if the price of a digital camera rises, then we can expect

a decrease in the price of perfume

Ceteris paribus, which of the following is most likely to cause an increase in the quantity demanded of perfume?

an increase in consumers' income

Ceteris paribus, which of the following would generally cause an increase in the demand curve for new automobiles?

15

Consider the following price-quantity information from the market's three sellers: $8 $6 $4 Flo 8 5 3 Joe 12 9 6 Moe 5 3 1 If the price falls from $8 to $4 per unit, the quantity supplied in the market falls by _____

ceteris paribus

Consider the relationship between the price of gas and the quantity of gas consumed by drivers. If we are to consider the price of gas as the only factor affecting the quantity of gas consumed, while holding other factors such as drivers' incomes and tastes and preferences irrelevant, then we are invoking ______.

high

At a market's equilibrium price, every consumer who wished to make a purchase was able to do so. Yet, some consumers left the market without making a purchase because they viewed the price as being too ______.

low

At a market's equilibrium price, every seller who wished to make a sale was able to do so. Yet, some sellers left the market without making a sale because they viewed the price as being too:

low.

At a market's equilibrium price, every seller who wished to make a sale was able to do so. Yet, some sellers left the market without making a sale because they viewed the price as being too:

surplus; shortage

At an equilibrium price, there is neither a market _______ , nor a market _________ , ) because the quantity demanded by consumers at a specific price is identical to the quantity supplied at that same price.

willing and able to pay for the good.

Demand only exists if someone is:

False Reason: To illustrate, start at a market in equilibrium. See what happens at a price below equilibrium. Here, the quantity demanded is greater (out to the demand curve) than the quantity supplied (over to the supply curve). By definition, a market shortage occurs.

True or false: A market shortage occurs when quantity supplied exceeds quantity demanded.

True

True or false: A market surplus occurs when quantity supplied exceeds quantity demanded.

True

True or false: A substitute good is one that is used in place of another good.

False

True or false: At equilibrium quantity, there is either a market shortage or surplus.

False

True or false: Changes in the determinants of demand will cause a movement along the demand curve.

false (A shift of the curves alone or simultaneously will create a new point of intersection between both curves, thus establishing a new equilibrium.)

True or false: If there is a shift of the demand curve or a shift of the supply curve, it will not disturb the equilibrium price and quantity.

False

True or false: In the supply and demand model, quantity demanded is illustrated on the vertical axis, while price is illustrated on the horizontal axis.

False

True or false: The market supply curve is derived by summing up the producers' individual demand curves for a good or service.

False

True or false: The three main decisions that must be addressed by an economic system include what goods are to be produced, who will produce them, and where they will be produced.

True

True or false: To determine total demand, we add the separate demands of all individual consumers in the market.

False

True or false: We obtain the market supply curve by "vertically adding" the supply curves of the individual producers.

increase

When consumers purchase a good or service, they do so in order to ______ their level of utility or satisfaction.

domestic producers.

When quotas are eliminated, the losers include

decrease

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

What?

Which basic economic question asks about the mix of output that society produces?

3-D televisions become popular and the equilibrium price and quantity of 3-D televisions increase.

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

The idea that factors other than those being considered in a particular analysis do not change.

Which of the following defines ceteris paribus?

a technological improvement that reduces the cost of production

Which of the following events would cause a rightward shift in the market supply curve for automobiles?

U.S. steel producers will benefit from the tariff.

Which of the following is an argument in favor of steel tariffs?

increases

Because quantity demanded falls as price _______, the demand curve can be shown graphically by a downward sloping curve.

the labor of a state university professor

Which of the following is purchased in a factor market?

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 slope downward and to the right?

a movement from one point to another on a fixed curve

Which of the following refers to a change in quantity supplied?

a change in the supply schedule and a shift of the curve

Which of the following represents 'a change in supply'?

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

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

A decrease in the number of buyers

Which of the following would most likely lead to a decrease in demand?

Price ceiling

_______ is an upper limit imposed on the price of a good.

Market surplus

_______ is the amount by which the quantity supplied exceeds the quantity demanded at a given price.

Market Supply

_______ is the total quantities of a good that sellers are collectively willing and able to sell at alternative prices in a given time period, ceteris paribus.

Equilibrium

_______ reflects a compromise between buyers and sellers. In other words, no other compromise yields a quantity demanded that's exactly equal to the quantity supplied.

Market Demand

_______ represents the combined demands of all market participants.

the supply curve for monkey wrenches will shift to the left.

Assume that steel is used to produce monkey wrenches. Ceteris paribus, if the price of steel rises, then

shift of, movement along

A ______ the demand curve represents a change in demand while a ______ the demand curve represents a change in the quantity demanded.

surplus

A ________ will not last long because producers will lower their prices as a result of market signals.

product price

A change in ______ causes a movement along the supply curve.

the necessary income

A consumer's willingness to purchase in a market must be supported by the ability to make the purchase as evidenced by ______.

a decrease in both equilibrium price and quantity

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

curve

A demand _______ is a graphical illustration of a demand schedule.

graphical

A demand curve is a ______ representation of a demand schedule.

demanded/ demand and supplied/supply

A market shortage results from an excess of quantity _____ over quantity _____ at a given price

ceiling

A price ___ is an upper limit imposed on the price of a good.

A decrease in the demand for laptops

Assume that laptops and tablets are substitutes In the market for laptops, what would we expect to happen if the price of tablets falls?

an increase in the demand for the other.

Assume that peanut butter and jelly are complements. A decrease in the price of one will result in

demand

According to the law of _, the quantity of a good demanded in a given time period increases as its price falls, ceteris paribus.

consumer tastes consumers' incomes the prices of related goods number of buyers in the market consumer expectations - cost of inputs in production (correct)

All of the following are the determinants of demand, except:

an increase

An increase in the demand for a good, while holding supply constant, would result in ______ in both the equilibrium price and the quantity of the good.

quantity demanded, demand

An increase in the price of Coke will change the ________ for Coke, whereas an increase in the price of Pepsi will change the ______ for Coke.

shift the allocation of resources away from import-competing industries.

As trade restrictions are eliminated, increased imports

no trade

From a consumer's viewpoint, which of the following policies would be least desirable?

Maximizing

Governments use resources to serve public needs to achieve the goal of ______ welfare.

U.S. supply under quota-restricted trade

If S1 represents the U.S. domestic supply of a good, what does S2 most likely represent?

the supply of sugar in the United States would shift to the right and sugar prices would fall.

If U.S. quotas on imported sugar were eliminated,

rise, fall

If prices for a good or service are expected to increase in the future, demand for that good or service will ______ today. If prices are expected to decrease in the future, demand will ______ today.

A decrease in the quantity demanded of digital cameras.

In the market for digital cameras, what would we expect to happen if the price of digital cameras rises?

vertical

In the supply and demand model, price appears on the _______ axis.

decrease

Other things equal, if consumers believe that the price of gas will fall tomorrow, the demand for gas today will likely ______.

movement along the supply curve, shift of the supply curve

On a simple supply model, a change in quantity supplied is illustrated by a ______ and a change in supply is illustrated by a ______.

more (There is a positive or direct relationship between price and quantity supplied (Qs), so that when price rises, Qs rises and vice versa.)

Other things equal, firms will produce and offer for sale ______ of their product at a high price than at a low price.

protectionism in the paper product market but free trade in the lumber market.

Producers of paper products are most likely to be in favor of

Maximizing

Producers seek the efficient use of resources with a goal of ______ their profit.

Imports will decline as price increases and domestic production increases.

S1 represents the U.S. domestic supply of a good, and S2 represents supply in the United States under conditions of free trade. If the United States imposes a tariff on this good, what will happen to the quantity imported?

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

Select all that apply Which of the following are determinants of demand?

Technology Taxes and subsidies Factor costs

Select all that apply Which of the following are determinants of supply?

subsidies taxes

Select all that apply Which of the following are determinants of supply?

decrease the quantity supplied increase the quantity demanded create a market shortage

Select all that apply Which of the following is an effect of price ceiling?

German jacket producers

Suppose that Costa Rica has a comparative advantage in jackets and Germany has a comparative advantage in jewelry. Which of the following groups would be worse off if these countries specialize and trade?

factors other than the price of the product affect the amount of a product purchased

The "ceteris paribus" assumption is important to the law of demand because ______.

determinants of demand

The "ceteris paribus" in the relationship between price and quantity demanded are called the ______.

redistribute income from import-competing industries to export industries.

The elimination of import restrictions will

change

The equilibrium price will _______ whenever the supply or demand curve shifts.

profit

The goal of producers is to maximize:

increases

The law of demand states that the quantity of a good demanded in a given time period ______ as its price falls, ceteris paribus

the summation of all the individual supply curves for the good

The market supply curve for a good is ______.

supply

The number of sellers or competitors in a market is a determinant of (supply/demand)

supply

The number of sellers or competitors in a market is a determinant of (supply/demand).

increases; more

The supply curve is an upward-sloping curve because as price ______, the producer will be willing to supply ______ of the product.