ch 3
which of the following are determinants of demand
-The price of the good or service. -Prices of related goods or services. These are either complementary (purchased along with) or substitutes (purchased instead of). -Income of buyers. -Tastes or preferences of consumers. -Expectations.
government controlled prices in the form of price ceilings and price floors
-stifle the rationing functions of prices -produce negative side effects -distort resource allocation
government controlled prices cause...
-surpluses -shortages -distortions in resource allocation -negative side effects
which of the following illustrates the relationship between a good and its complement
-when the price of lettuce increase, the demand for salad dressing decreases -when the price of tuition decreases, the demand for textbooks increases
which of the following describes the law of demand?
An increase in price is associated with a decrease in quantity demanded, all other things are equal
choose all of the following that will cause change in supply, not quantity supplied
B. Number of Sellers C. Producer expectations D. Technology
if demand decreases and supply stays constant
EP and EQ falls
if supply increases and demand stays constant...
EP falls and EQ rises
if demand decreases and supply increases
EP falls and the change in quantity is indeterminate
the determinant of supply dealing with alternative products that can be produced by firms is called
Price changed or paid for substitute goods in production
_______ in supply while holding demand constant results in an increase in equilibrium price, but a decrease in equilibrium quantity
a decrease
a decrease in demand while holding supply constant
a decrease in EQ and EP
The supply curve is ______ sloping curve
an upward
one of the determinants of demands is ________ expectations
consumer
an increase in business taxes causes ______ in supply and _______ production cost
decrease, increase
an increase in ______ while holding supply constant results in an increase in both equilibrium price and quantity
demand
the number of buyers is determinant of market
demand
a shortage results from an excess of quantity ____
demanded
the _______ of a supply of a good are factors other than the goods ______ that have an effect on the supply of a good or service and cause the supply curve to shift
determinants, price
price and quantity supplied have a _____ relationship
direct
producer expectations refer to firms expectations of _____ for a good or service they produce
future prices
______ resource prices raise production cost and, assuming a fixed product price, ____ profits
higher, reduce
quantity demanded is illustrated on the ___ axis, while price illustrated is on the ___ axis.
horizontal, vertical
the vast majority of goods that are not related to one another are called __________
independent
the law of demand describes a _____ relationship between the price of a good or service and the quantity demanded of that good or service
inverse
when two variables are being examined, and one variable moves one way and the other moves the opposite direction, this is called
inverse relationship
a demand curve shows the plotted:
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 ceiling is ____
legal, illegal
if costs of production rise, the producer has an incentive to produce ____ output
less
other things equal, firms will produce and offer for sale _____ of their product at a high price than at a low price
more
the interaction of buyers and sellers determines equilibrium price and equilibrium ____
quantity
when each additional worker of a firm produces less additional output than previously hired workers, then the marginal cost of additional units of output:
rises
when the government provides financial assistance for the production of a good which lowers producers cost and increases supply, it is called a
subsidy
which of the following type of goods affect the demand for another product due to a change in their price
substitue and complementary
the supply curve measures quantity ______ on the horizontal axis and ______ on the vertical axis
supplied, price
a surplus is also known as an excess of _______
supply
improvements in technology are determinants of ____
supply
market _____ is a schedule or curve showing the various amounts or a product that producers are willing and able to make available for sale
supply
the number of sellers competitors in a market is a determinant or shifter of the ____ curve
supply
which of the following specifically refers to demand
the buyer side of any market
if supply increases and demand increases...
the change in EP is indeterminate and EQ rises