Econ Ch 3
What do economists mean by market equilibrium?
A market outcome where quantity supplied is equal to quantity demanded.
goods and services that are used together are ________.
Complements
if Nissan believes the future price will be higher
Nissan may reduce supply today
Goods and services that can be used for the same purpose are ________,
Substitutes
McDonald's distributes $1.00 off coupons. This will cause
a movement along the demand curve for McDonald's Big Mac hamburgers.
A good for which demand increases as income rises is
a normal good
This change resulted in a
a surplus of oil such that there is a greater quantity supplied than quantity demanded for crude oil.
If a surplus exists in a market, we know that the actual price is
above the equilibrium price, and the quantity supplied is greater than the quantity demanded.
a good for which demand increases as income falls is
an inferior good
If a shortage exists in a market, we know that the actual price is
below the equilibrium price, and the quantity demanded is greater than the quantity supplied.
From the list below, select the variable that will cause the demand curve to shift:
consumer income
The price of Burger King's Whopper hamburger increases. This will cause
demand for McDonald's Big Mac hamburgers to increase.
The U.S. economy enters a period of decline in incomes. This will cause
demand for McDonald's Big Mac hamburgers to shift to the right if they are inferior goods.
In response to the global glut of oil, the market price will
fall to a new, lower equilibrium price at which the quantity demanded would equal the quantity supplied.
In referring to a "global glut of crude," the article describes the result of a significant
increase in supply of, relative to the demand for, crude oil.
The price of fries decreases due to a potato surplus. This will
increase the demand for McDonald's Big Mac hamburgers.
When the price of metal decreases , the quantity of cars supplied at any price
increases
The glut will start to shrink when crude oil producers
reduce the amount that they offer for sale, and buyers increase the amount they buy.
Variable that will cause the supply curve to shift
the cost of raw materials
The law of demand is the assertion that
the quantity demanded of a product is inversely related to its price. Your answer is correct.
An increase in the price of a product causes a decrease in quantity demanded because of the income and substitution effects. More specifically,
the substitution effect is the decrease in quantity demanded because the product is more expensive relative to other goods and the income effect is the decrease in quantity demanded owing to the decline in consumers' purchasing power.
