Econ 202 Quiz 4 Questions

We make the assumption of holding all else equal when considering demand curves since we want to focus on the changes in the quantity demanded that result from changes in ...

only the price of a good

The Law of Supply states​ that, in most​ cases, the quantity supplied of a good​ ___________ when the price of the good rises. This means we would expect a typical supply curve to​ be___________.

rises; upward-sloping

Holding all else equal, if the price of a digital camera rises, then we can expect

a decrease in the quantity demanded of digital cameras

all of the following would cause a shift in the supply curve for orange juice, except

a new medical discovery about the benefits of citrus

what is meant by holding all else equal and how is this concept used when discussing movements along the demand curve?

all variables that can affect the demand for the good are held constant

competitive equilibrium

at this price we know that the quantity supplied is equal to the quantity demanded

In a perfectly competitive​ market, sellers​ _________ and buyers​ _________.

cannot charge more than the market​ price; cannot pay less than the market price.

suppose the price of pancakes increases and the demand for syrup decreases. you determine that these goods must be

complements

If people expect the price of SUVs to decrease in the future, then the demand for the Toyota Rav4 SUV would

decrease (shift left)

if widespread unemployment leads to a drop in incomes, then the demand for the Toyota Rav4 SUV would ______________.

decrease (shift left)

In a perfectly competitive​ market, if one seller chooses to charge a price for its good that is slightly higher than the market​ price, then it will​ _________.

lose all or almost all of its customers

a competitive market will

move towards equilibrium quantity because both producers and consumers act in their own best interest.

aggregation consists of fixing the _______________________ and adding up the _______________________ by each buyer

price of the good; quantity demanded

aggregation consists of fixing ___________________ and adding up the _________________ by each firm

price of the good; quantity supplied

Holding all else​ constant, if the number of cell phone manufacturers suddenly decreased due to increased​ regulations, then

supply would shift​ leftwards, equilibrium price would​ increase, and equilibrium quantity would decrease.

how would the equilibrium price in a market be affected if there were a large increase in supply and a small increase in demand?

the equilibrium price decreases

how would a decrease in supply affect the equilibrium price in a market?

the equilibrium price increases

how would the equilibrium price in a market be affected if there were a large decrease in supply and a small decrease in demand?

the equilibrium price increases

the law of demand refers to

the negative relationship between the price and the quantity demanded of a commodity

If​ Jay's Fruit Stand is able to charge considerably higher prices than other fruit stands with the same​ produce, it is likely that

there are no fruit stands in close proximity to Jay's