Econ - Chapter 3

When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right. a. prices rise b. costs of production fall c. equilibrium is achieved d. there is a population increase

b. costs of production fall

After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is: a. a shift of the demand curve for beef to the right. b. a movement down along the demand curve for beef to the right. c. a shift of the demand curve for beef to the left. d. no change; only the supply curve for beef is likely to be affected.

c. a shift of the demand curve for beef to the left.

Any given demand or supply curve is based on the ceteris paribus assumption that ___________________. a. everything is variable. b. no one knows which variables will change and which will remain constant. c. all else is held equal d. what is true for the individual is not necessarily true for the whole.

c. all else is held equal

The nature of demand indicates that as the price of a good increases: a. suppliers wish to sell less of it. b. more of it is desired. c. buyers desire to purchase less of it. d. more of it is produced.

c. buyers desire to purchase less of it.

The downward slope of the demand curve again illustrates the pattern that as _____________ rises, _________________ decreases. a. price, quantity supplied b. quantity supplied, quantity demanded c. quantity demanded, price d. price, quantity demanded

d. price, quantity demanded

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of: a. the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price. b. both the supply and demand curves. c. the demand curve, as consumers try to economize because of the shortage. d. the supply curve.

d. the supply curve

The ___________ is the only price where quantity demanded is equal to quantity supplied. a. equilibrium price b. vertical axis intercept c. market price d. horizontal axis intercept

a. equilibrium price

The term "ceteris paribus" means that: a. all variables except those specified are constant. b. what is true for the individual is not necessarily true for the whole. c. no one knows which variables will change and which will remain constant. d. everything is variable.

a. all variables except those specified are constant.

When quantity demanded decreases in response to a change in price: a. there is a movement up along the demand curve. b. the demand curve shifts to the left. c. the demand curve shifts to the right. d. there is a movement down along the demand curve.

a. there is a movement up along the demand curve.

But nearly all supply curves share a basic similarity: they slope _______________. a. up from left to right b. down from left to right c. down from right to left d. up from right to left

a. up from left to right

The demand schedule for a good: a. indicates the quantities that suppliers will sell at various market prices. b. indicates the quantities that will be purchased at alternative market prices. c. indicates the quantity that people will buy at the prevailing price. d. is determined primarily by the cost of producing the good.

b. indicates the quantities that will be purchased at alternative market prices.

A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and ____________, shown on the horizontal axis. a. quantity demanded b. quantity supplied c. quantity d. demand

b. quantity supplied

If new manufacturers enter the computer industry, then (ceteris paribus): a. the supply curve shifts to the left. b. the supply curve shifts to the right. c. some established manufacturers must exit the industry. d. the demand curve shifts to the left.

b. the supply curve shifts to the right.

In many cases, it is reasonable to refer to the opportunity cost as the price. Rather Opportunity cost is... a. The price of an item b. What must be given up to obtain something else c. A measure of success d. A and C

b. what must be given up to obtain something else

In economics, the demand for a good refers to the amount of the good that people: a. would like to have if the good were free. b. will buy at various prices. c. need to achieve a minimum standard of living. d. will buy at alternative income levels.

b. will buy at various prices.

The demand curve for a typical good has a: a. negative slope because consumer incomes fall as the price of the good rises. b. negative slope because the good has less "snob appeal" as its price falls. c. negative slope because some consumers switch to other goods as the price rises. d. inverse slope because as the price goes up, the good has more profitability.

c. negative slope because some consumers switch to other goods as the price rises.

A demand curve shows the relationship between price and _________________ on a graph. a. quantity produced b. economies of scale c. quantity demanded d. costs

c. quantity demanded

_________________ refers to the total number of units that are purchased at that price. a. supply b. quantity c. quantity demanded d. market quantity

c. quantity demanded

When economists talk about supply, they are referring to a relationship between price received for each unit sold and the _________________. a. market price b. demand curve c. quantity supplied d. demand schedule

c. quantity supplied

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________. a. income gap b. price model c. market equilibrium d. law of demand

d. law of demand