Macroeconomics SB3
The vast majority of goods that are not related to one another are called ______ goods.
independent
A demand curve shows the ______.
inverse relationship between price and quantity demanded for a product
A decrease in supply while holding demand constant results in a(n) ______ in equilibrium price, and a(n) ______ in equilibrium quantity. Multiple choice question.
increase; decrease
A favorable change in consumer tastes and preferences for a product will ______ demand, which is illustrated as a shift of the demand curve to the ______.
increase; right
What are characteristics of a competitive market?
1. A large number of buyers and sellers 2. Standardized products
In the marketplace, what is a good that is used together with another good?
A complementary good
______, while holding demand constant, results in an increase in the equilibrium price of the good, but a decrease in the equilibrium quantity of the good.
A decrease in the supply of a good
Which of the following exemplifies a change in buyers' tastes? A. An increase in demand for digital cameras over 35mm cameras. B. A decrease in national income because of a recession. C. A decrease in the average price of gasoline during the winter. D. An increase in the number of buyers in a market.
A. An increase in demand for digital cameras over 35mm cameras.
Which of the following shows the effects on equilibrium price and quantity due to an increase in supply and a simultaneous decrease in demand? A. The change in equilibrium price is indeterminate and equilibrium quantity rises. B. Equilibrium price falls and the change in equilibrium quantity is indeterminate. C. Equilibrium price rises and the change in equilibrium quantity is indeterminate. D. The change in equilibrium price is indeterminate and equilibrium quantity falls.
B. Equilibrium price falls and the change in equilibrium quantity is indeterminate.
Other things equal, which of the following is correct regarding increasing the number of sellers in an industry? A. The quality of products increases B. The market supply becomes greater C. More firms will leave the industry D. The supply curve shifts to the left.
B. The market supply becomes greater
______ resource prices raise production costs and, assuming a fixed product price, ______ profits.
Higher; reduce
Which of the following will cause a change in supply and not quantity supplied? (Check all that apply) Number of sellers Consumer expectations Producer expectations Technology Product price
Number of sellers, Producer expectations, Technology
What determines market price and equilibrium output in a market?
The interaction of buyers and sellers
True or False: Resource costs or changes in these costs to production are responsible for shifts in the supply curve.
True
True or false: When the price of one product rises, the demand for its substitute will increase.
True
The rationing function of prices refers to the ability of the competitive forces of supply and demand to establish a price at which ______.
buying and selling decisions are consistent
The concept of demand can be summarized by a schedule or curve showing the quantity of a product that would be ______.
consumed at various possible prices
A decrease in demand while holding supply constant results in ______ in both equilibrium price and quantity.
decline
An unfavorable change in consumer tastes and preferences for a product will ______ demand, which is illustrated as a shift of the demand curve to the ______.
decrease; left
A change in the number of buyers is a determinant of market ______.
demand
Consumers experience ______ ________ ______ the more they consume of a particular good or service.
diminishing marginal utility
According to the law of supply, price and quantity supplied have a(n) ______ relationship.
direct
Producer expectations refer to firms' expectations of ______ for a good or service that they produce.
future prices
Government may place legal limits on prices when it is determined that prices are unfairly ____ for buyers or unfairly ___ for sellers.
high; low
In general, a firm will _______ the output of a good or service if the price of the good is rising.
increase
In a market equilibrium model, the demand curve is downsloping because
lower prices of a product create income and substitution effects that lead consumers to purchase more of it
The equilibrium price where the quantity demanded equals the quantity supplied is otherwise known as the ______-________ _____.
market-clearing price
On a simple supply model, a change in quantity supplied is illustrated by a ______ and a change in supply is illustrated by a ______.
movement along the supply curve; shift of the supply curve
A _____ _______ is the maximum legal price a seller may charge for a product or service.
price ceiling
The production of a good or service in the least costly way is known as ______ efficiency.
productive
subsidy
refers to government financial assistance for the production of a good which lowers producers' costs and increases supply
The price of ______ goods is a determinant of demand.
related
If prices for a good or service are expected to increase in the future, demand for that good or service will ______ today. If prices are expected to decrease in the future, demand will ______ today.
rise; fall
A change in demand is represented by a ______ the demand curve while a change in quantity demanded is represented by a _______ the demand curve.
shift of; movement along
The ability of the competitive forces of supply and demand to establish a price at which selling and buying decisions are consistent is called ______.
the rationing function of prices
