Econ Chapter 4 HW Practice

The supply curve represents:

The minimum price sellers are willing to accept to sell an extra unit of a good

Which of the following is NOT one of the five major factors that shifts the demand curve when it changes?

The price of the good itself

Lobsters are plentiful and easy to catch in August but scarce and difficult to catch in November. In addition, vacationers shift the demand for lobsters further to the right in August than in any other month. We know that (blank) is/are higher in August than in any other month.

Both supply and demand

If price of a complementary good increases, how would the demand for a normal good be impacted?

Demand would shift leftward

Land can be used to either grow grapes or apples. What is the relationship between wine and apples?

The share a common input

If the demand for wine suddenly shifts sharply to the right, we would expect to see (blank) in the demand for land, which would (blank) the equilibrium price for land

an increase; increase

Since the price of eggs increases and the demand for bacon decreases, you determine that these goods must be:

complements

Market demand is derived by:

fixing the price and adding up the quantities that each buyer demands

As a firm produces more of a good, the cost producing each additional unit (blank). This implies that the marginal cost of producing a good (blank) as you make more of the good

increases; increases

In a perfectly competitive market, if one seller chooses to charge a price for its good that is slightly higher than the market price, then it will:

lose all or almost all of its customers

When comparing equilibriums in the lobster market for August and November, the equilibrium quantity is (blank) in November than in August, while the equilibrium price is (blank)

lower; higher, lower or unchanged

The relationship that exists between these two variables can be described as:

negatively related

Suppose conditions arise in the sugar market that would lead to a competitive equilibrium price that is below 18.75 cents per pound, sugar mills will:

not sell to private buyers at this lower price and will sell to the government instead, which will drive up the domestic price until it reaches 18.75 cents per pound

The Law of Demand states that as the price of a good increases, the (blank) decreases. This can be shown with a (blank) demand curve or numerically in a table using a (demand schedule)

quantity demanded; downward-sloping; demand schedule

When one of the five major demand factors changes, causing an increase in demand, the demand curve shifts:

rightward

Coffee and tea are likely (blank) because an increase in the price of coffee (blank) the demand for tea

substitutes; increases

Does the shape of the market demand curve differ from the shape of an individual demand curve?

No, they both tend to be downward-sloping curves

Since both wine and apples use the same land, a sharp increase in demand for wine will results in a (blank) price for apples and a (blank) equilibrium quantity

higher; lower

In a perfectly competitive market, sellers (blank) and buyers (blank)

cannot charge more than the market price; cannot pay less than the market price