Micro Ch 3 LearnSmart

The demand for a normal good would likely increase in which of the following cases?

-A decrease in the price of complementary goods -An increase in the number of buyers

According to the law of demand, which of the following statements are true, all other things being equal?

-As price decreases, quantity demanded increases. -As price increases, quantity demanded decreases.

Which of the following types of goods affect the demand for another product due to a change in their price?

-Complementary goods -Substitute goods

Which of the following are determinants of demand?

-Consumer income -Consumer expectations -Consumer tastes -Number of buyers -Prices of related goods

In which of the following situations do governments intervene to prevent prices from rising above or falling below their equilibrium levels?

-Prices are too high for consumers. -Prices are too low for firms.

Which of the following are determinants of supply?

-Resource prices -Taxes and subsidies -Technology

Which of the following are the characteristics of a competitive market?

-Standardized products -A large number of buyers and sellers

Choose all of the following that will cause a change in supply, not quantity supplied.

-Technology -Producer expectations -Number of sellers

All competitive markets involve which of the following?

-demand -quantity -supply -price

______,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 in the rental market for housing benefits renters, but makes it unprofitable for suppliers or landowners?

A price ceiling

In the marketplace, what is a good that can be used in place of another good called?

A substitute good

A decrease in equilibrium price and indeterminate result on equilibrium quantity is a result of which of the following?

An increase in supply and a simultaneous decrease in demand

Which of the following is likely to cause an increase in the demand for a good or service?

An increase in the number of buyers

Which of the following shows the effects on equilibrium price and quantity due to an increase in supply and a simultaneous decrease in demand?

Equilibrium price falls and the change in equilibrium quantity is indeterminate.

______ resource prices raise production costs and, assuming a fixed product price, ______ profits.

Higher; reduce

Which of the following is a determinant of demand?

Income

What are two goods called when a change in the price of one good has little or no effect on the demand for the other?

Independent goods

Which of the following has the greatest effect on the quantity supplied?

Price

Which of the following specifically refers to demand?

The buyer side of any market

What is the price where the intentions of buyers and sellers match?

The equilibrium price

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

A decrease in demand while holding supply constant results in ______ in both equilibrium price and quantity.

a decline

A decrease in demand while holding supply constant results in _______.

a decrease in both equilibrium price and quantity

The effects on equilibrium price and quantity due to an increase in supply and a simultaneous decrease in demand are shown by ______.

a decrease in equilibrium price and an indeterminate change in equilibrium quantity

The inverse relationship between price and quantity demanded can be graphically illustrated by ______.

a downward sloping curve

The willingness and ability of a consumer to buy a normal product falls because of ______.

a fall in income

The supply curve is ______ sloping curve.

an upward

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

Price controls or ______ mandated in the apartment rental market benefit the consumer by establishing a price ______ the free market equilibrium price.

ceilings; below

A ______ good is one that is used together with another good.

complementary

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

One of the determinants of demand is ______ expectations.

consumer

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

Consumer expectations are a determinant of _______.

demand

According to the law of supply, price and quantity supplied have a(n) ______ relationship.

direct/positive

The interaction between buyers and sellers determines the equilibrium price and the ________ quantity.

equilibrium

A price _____ is a minimum price fixed by the government, generally imposed above the equilibrium price.

floor

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

A favorable change in consumer tastes and preferences for a product will _______ demand, shifting the demand curve to the

increase, right

A decrease in supply while holding demand constant results in a(n) ______ in equilibrium price, and a(n) ______ in equilibrium quantity.

increase; decrease

Greater resource prices _______ the costs of production, thereby, ______ the incentive for firms to produce the good at each price.

increases; reducing

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 price ceiling is the maximum legal price a seller may charge for a product or service where a price at or below the ceiling is ______ and a price above the price ceiling is ______.

legal; illegal

If costs of production rise, the producer has an incentive to produce ______ output.

less

The equilibrium price where the quantity demanded equals the quantity supplied is otherwise known as the __________ price

market-clearing

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

The relationship between the price of a good or service and the quantity demanded of that good or service described by the law of demand is

negative

The determinants of the supply of a good are any factors other than the product's ______ that cause the supply curve of the good to shift.

price

When drawing a supply curve, _____ is labeled on the vertical axis.

price

The supply curve illustrates the relationship between ______.

price and quantity supplied

All the following are the determinants of demand except ______.

price of substitutes in production

The production of a good or service in the least costly way is known as ______ efficiency.

productive

Competition among corn producers forces them to use the best technology and right mix of productive resources; otherwise their costs will be too high relative to the market price and they will be unprofitable. This is best described as ______.

productive efficiency

The price of ______ goods is a determinant of demand.

related

A ______ the demand curve represents a change in demand while a ______ the demand curve represents a change in the quantity demanded.

shift of; movement along

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 supply curve measures quantity ______ on the horizontal axis and ______ on the vertical axis.

supplied; price

Market _______ is a schedule or curve showing the various amounts of a product that producers are willing and able to make available for sale at each possible price during a specific period.

supply

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