Economics CH2

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A supply curve that is upward sloping means that:

suppliers will want to sell more at higher prices

The principle stating that, for virtually all goods and services, there is a negative relationship between price and quantity demanded, all other things unchanged, is the law of:

demand

When economists study the behavior of buyers, they are studying:

demand

Consumer preferences, prices of related goods, income, and demographic characteristics are often termed:

demand shifters

If the price in the market for a commodity is above the market equilibrium price, the:

quantity supplied exceeds the quantity demanded

The price of oranges falls. What happens in the market for apples, which are a substitute for oranges?

The equilibrium price and quantity fall

The price of oranges rises. What happens in the market for apples, which are a substitute for oranges?

The equilibrium price and quantity rise

Two goods are substitutes if:

an increase in the price of one leads to an increase in demand for the other

The law of demand is illustrated when:

an increase in the purchases of personal computers results from lower prices

A shift of a demand curve to the right, all other things unchanged, will:

increase equilibrium price and quantity

If the quantity of housing supplied in a community is less than the quantity of houses demanded, the existing price:

is below the market equilibrium price

Which of the following would shift the demand curve for new textbooks to the right?

An increase in college enrollments

A substantial increase in the price of oranges (a normal good) is likely to result from:

a prolonged freeze in Florida

Demand and supply curves are drawn assuming ceteris paribus. This means that:

all other things besides price and quantity are assumed unchanged

Given a supply curve that is positively sloped and a demand curve for a normal good that is negatively sloped, an increase in income will most likely result in:

an increase in price and quantity

A decrease in supply is caused by:

an increase in returns from other alternative activities

A curve that shows the relationship between the price and quantity supplied during a particular period, all other things unchanged, is the:

supply curve

Factor prices, returns from alternative activities, technology, number of firms, producer expectations, and natural events are often termed:

supply shifters

An example of a supply shifter is:

technology

The intersection of the supply and demand curves indicates:

the equilibrium solution in the market

A shift in the demand curve to the left, all other things unchanged:

will cause a movement downward along the supply curve and a lower equilibrium quantity


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