Economics Chapter 3

A change in supply causes a ______ the supply curve. A change in quantity supplied causes a ______ the supply curve.

shift of, shift of

A minimum price above the equilibrium price generates excess _______ .

demand

If both demand and supply increase simultaneously, the equilibrium price will increase if the change in _______ is relatively large.

equilibrium quantity

An excess supply of a product will cause the price to ______. As a consequence of the price change, the quantity demanded will _____ and the quantity supplied will ________.

decrease, increase, decrease

A change in price causes movement along a demand curve and a change in ______

quantity demanded

Which variables are held fixed when drawing a market supply curve?

wages paid to workers, the price of the materials used in production, taxes paid by producers

excess demand (sometimes called a shortage)

a situation in which , at the prevailing price, the quantity demanded exceeds the quantity supplied

demand schedule

a table that shows the relationship between the price of a product and the quantity demanded, ceteris paribus

Consider the effects of online distribution of movies. A decrease in the price of online movies shifts the demand for DVD movies to the _______. A decrease in downloading time shifts the demand for DVD movies to the _______.

right, left

An increase in the price of wood shifts the supply curve for pencils ________; an improvement in pencil-production technology shifts the supply curve for pencils ____________.

to the left, to the right

complements

two goods for which a decrease in the price of one good increases the demand for the other good

substitutes

two goods for which an increase in the price of one good increases the demand for the other good

If supply decreases while demand decreases, the equilibrium price will ______

increase

Suppose the equilibrium price of housing recently increased, and the equilibrium quantity increased as well. These changes were caused by an ________ in ________.

increase in demand

An excess demand for a product will cause the price to _____. As a consequence of of the price change, the quantity demanded will _____ and the quantity supplied will _______.

increase, decrease, increase

According to the law of supply, an increase in price ______ the quantity supplied.

increases

The market demand curve for a product will shift to the right when the price of a substitute good ________, the price of a complementary good _______, consumer income ________, and the population __________.

increases, decreases, increases, increases

An increase in demand for a product ________ the equilibrium price and _______ the equilibrium quantity.

increases, increases

change in quantity supplied

A change in the quantity firms are willing and able to sell when price changes; represented graphically by movement along the supply curve

change in quantity demanded

a change in the quantity consumers are willing and able to buy when the price changes; represented graphically by movement along the curve.

market demand curve

a curve showing the relationship between price and quantity demanded by all consumers, ceteris paribus

individual supply curve

a curve showing the relationship between price and quantity supplied by a single firm, ceteris paribus

market supply curve

a curve showing the relationship between the market price and quantity supplied by all firms, ceteris paribus

The market demand curve is the ______ sum of the individual demand curves

horizontal

The market supply curve is the _______ sum of the individual supply curves.

horizontal

Excess demand occurs when the price is _______ than the equilibrium price; excess supply occurs when the price is _____ than the equilibrium price.

less and greater

According to the law of demand, an increase in price _______ the quantity demanded.

lowers

The minimum supply price is the ______ price at which a product is supplied.

lowest

What variables are held fixed in drawing a market demand curve?

the price of the product and the quantity of the product purchased

The market equilibrium is shown by the intersection of the _______ curve and the _______ curve.

supply and demand

quantity demanded

the amount of a product that consumers are willing and able to buy

quantity supplied

the amount of a product that firms are willing and able to sell

minimum supply price

the lowest price at which a product will be supplied

law of demand

there is a negative relationship between price and quantity demanded, ceteris paribus

law of supply

there is positive relationship between price and quantity supplied, ceteris paribus

individual demand curve

a curve that shows the relationship between the price of a good and quantity by an individual customer, ceteris paribus

inferior good

a good for which an increase in income decreases demand

normal good

a good for which an increase in income increases demand

perfectly competitive market

a market with many sellers and buyers of a homogeneous product and no barriers to entry

change in supply

a shift in the supply curve caused by a change in a variable other than the price of the product

Change in demand

a shift of the demand curve by a change in a variable other than the price of the product

market equilibrium

a situation in which the quantity demanded equals the quantity supplied at the prevailing market price

excess supply (sometimes called surplus)

a situation in which the quantity supplied exceeds the quantity demanded at the prevailing price

supply schedule

a table that shows the relationship between the price of a product and quantity supplied, ceteris paribus

If supply increases while demand decreases, the equilibrium price will _______

decrease

Suppose the equilibrium price of accordions recently increased while the equilibrium quantity decreased. These changes were caused by an _______ in _________.

decrease in supply

The decrease in the number of bee colonies ____ the supply of fruits and berries, ______ the cost of producing ice cream, and _______ the equilibrium price of ice cream.

decrease, increase, increase

An increase in the supply of a product _______ the equilibrium price and ________ the equilibrium quantity.

decreases, increases

If a decrease in the price of drugs is accompanied by a decrease in quantity, the decrease in price was caused by a change in _________.

demand

If supply increases while demand decreases, the equilibrium quantity will decrease if the change in _____ is relatively large.

demand

When _____ changes, the equilibrium price and the equilibrium quantity in the same direction. When ______ changes, the equilibrium price and the equilibrium quantity change in opposite direction.

demand, supply

Which variables change as we move along the demand curve for pencils?

quantity of pencils demanded, price of pencils

Which variables change as we move along the supply curve for pencils.

quantity of pencils supplied, price of pencils

A change in price causes movement along a supply curve and a change in ____

quantity supplied

A change in demand causes a ______ the demand curve. A change in quantity demanded causes a ______ the demand curve.

shift of, movement along