Microeconomics Chapter 3

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

A demand schedule illustrates the relationship between price and quantity in the format of a(n) ______.

table

All competitive markets involve which of the following?

-demand -quantity -price -supply

Which of the following curves shows the quantities of a product that will be purchased at various possible prices, other things equal?

the demand curve

Substitute goods and complementary goods refer to which determinant of demand?

the price of related goods

True or false: The law of demand can be supported by the income effect.

true

Which exemplifies a pair of substitute goods?

Hot dogs and hamburgers

All the following illustrate a market, except ______.

a farmer sharing his surplus wheat with neighbors

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

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

Which exemplifies a pair of complementary goods?

A hot dog and relish

Which of the following specifically refers to demand?

The buyer side of any market

Sellers are ______ of a product, whereas buyers are ______ who use or consume the product.

"suppliers"; "demanders"

A demand ________organizes the relationship between price and quantity in a tabular format, whereas the demand _______is a graphical representation of this relationship.

schedule; curve

Supply refers to the ______ of a product and demand refers to the ______ of the product.

selling; buying

When a factor other than price affects consumption of a good or service, the demand curve will ______.

shift to the right or left

The income and _________ effects combine to make consumers willing and able to buy more of a product at a lower price than at a higher price.

substitute

The ______ suggests that at lower prices, buyers have an incentive to substitute less expensive products for similar products that are now relatively more expensive.

substitution effect

The market demand curve is the ______ demand curves for a good or service.

summation of all individual

When a product's demand varies directly with money income, it is considered a(n) ______ good.

superior

The determinants of demand, other things equal, are assumed to be _________ when a demand curve is drawn or computed.

unchanged

The determinants of demand, other things equal, are assumed to be __________ when a demand curve is drawn or computed

unchanged

For a graph based on the supply-and-demand model, the quantity demanded is conventionally measured on the ________ axis.

horizontal

The inverse relationship between price and quantity demanded reflects diminishing marginal utility, the substitution effect, and the ________ effect.

income

The ______ effects combine to impact a buyer's demand for a specific product

income and substitution

If the birthrate increases, the purchase of baby products is likely to ______.

increase

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

increase, right

"My income increased because of a substantial raise; therefore I decreased my consumption of Spam." This statement best exemplifies the relationship between income and a(n) ______ good.

inferior

Products that have decreased demand when consumer incomes rise and increased demand when consumer incomes fall are called ______ goods.

inferior

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

-A large number of buyers and sellers -Standardized products

Which of the following are examples of a market?

-A weekend farmers' market -A pay-to-play online gaming site -eBay

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 are reasons for the inverse relationship between price and quantity demanded?

-Consumption is subject to diminishing marginal utility. -A lower price increases the purchasing power of a buyer's income, enabling a buyer to purchase more of a product. -A higher price makes it more likely the consumer will substitute another good. -People ordinarily buy more of a product at a low price than at a high price.

Which of the following would most likely lead to a decrease in demand?

A decrease in the number of buyers

Which of the following are determinants of demand?

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

Other things equal, the amount of a product that will be purchased at various possible prices is shown by ______.

Demand

Which of the following would increase the demand for goods and services in the United States?

Large-scale immigration

Which of the following exemplify a decrease in the demand for goods due to a decrease in the number of buyers?

People leaving the small towns where they grew up to look for job opportunities People retiring and leaving the cities where they worked

A demand curve measures quantity ______ on the horizontal axis and ______ on the vertical axis.

demanded; price

True or false: Changes in the determinants of demand will cause a movement along the demand curve.

false

The income effect indicates that a ______ price increases the purchasing power of income, enabling consumers to purchase ______ of a product and vice versa.

lower; more

An e-commerce site, a gas station, a local music store, and a farmer's roadside stand are all examples of a familiar __________.

market

For every good or service, the quantities demanded by individual consumers at every price are added together to compute ______ for a good or service.

market demand

Upon receiving a substantial raise, Jessie increased her monthly consumption of beef. This information best exemplifies the relationship between income and a(n) ______.

normal good

All the following are the determinants of demand except ______.

price of substitutes in production

The determinants of demand for a product are factors, other than the ______, that affect consumption or buyers' decisions to purchase and consume.

price of the product

Due to the substitution effect, buyers have an incentive to buy less expensive products in place of similar products that have become ______.

relatively more expensive