econ ch3
The highest-valued alternative that is given up or sacrificed when choosing to produce or consumer one good over another is referred to as:
an opportunity cost
a decrease in supply while holding demand constant results in an ___ in equilibrium price, but a ___ in equilibrium quantity.
increase; decrease
the detrminant of supply dealing with alternative products that can be produced by firms is called:
price of other goods
all of the following are the determinants of demand except
price of substitutes in production
the interaction of buyers and sellers determines equilibrium price and equilibrium
quantity
The price of ____ goods is a determinant of demand.
related
a surplus is also known as an excess of ___.
supply
improvements in technology are a determinant of
supply
Which of the following are reasons for the inverse relationship between price and quantity demanded?
-a lower price increases the quantity demanded for the good. -a higher price makes it more likely the consumer will buy a different good - people ordinarily buy more of a product at a low price than at a high price
From an economic perspective, which of the following are true of a market?
-it is a virtual and/or physical institution or space -buyers and sellers interact in their desire to buy and sell a good or service. - the pursuit of buyers and sellers in making themselves better off
which of the following are determinants of demand?
-number of buyers -consumer expectations -changes in income -consumer tastes -prices of related goods
a shortage occurs when quantity supplied exceed quantity demanded
False
the supply curve is an upwad sloping curve because as price decreases, the producer will be willing to supply more of the product.
False
The firm will increase output of a good or service if the resource costs of the units falls.
T
a substitute good is one that is used in place of another good
True
equilibrium price is the price where the intentions of buyers and sellers match.
True
a decrease in demand while holding supply constant results in:
a decrease in both equilibrium price and quantity
an increase in business taxes cuases __ in supply and will __ production costs.
a decrease; increase
which of the following are components of the circular flow model?
businesses, product market, households, factor market
the participants involved in the circular flow model are:
consumers, businesses, the government, and global actors
in the circular flow model, the market ecoomy creates
continuous, repetitive flows of goods and services, and factors
a buyer's intentions or plans in regard to the purchase of a product is known as:
demand
the number of buyers is a determinant of market
demand
the __ of supply are any factors other than the product's __ that have an effect on the supply of a good or service and cause the supply curve to shift
determinants, price
the ___ of supply are any factors other than the product's ____ that have an effect on the supply of a good or service and cause the supply curve to shift.
determinants; price
in the circular flow model
factors flow counterclockwise
the law of demand describes an ___relationship between the price of a good or service and the quantity demanded of that good or service
inverse
the demand curve shows the plotted:
inverse relationship between price and quantity demanded for any product
if costs of production rise, the producer hs an incentive to produce___ output at every possible cost.
less
a ___is an institution or mechanism that brings buyers and sellers into contact
market
the law of supply states that as price __, the quantity supplied rises; as price ___, the quantity supplied falles.
rises; falls
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
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
which of the following are determinants of supply?
subsidies, taxes
Which of the following type of goods affect the demand for a product due to a change in their price?
substitute goods, complementary goods
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
producer expectations of future prices are a determinant of
supply
the number of sellers or competitors in a market is a determinant of
supply
what determines market price and equilibrium output in a market?
the interaction of buyers and sellers
equilibrium price and equilibrium quantity occur where:
the supply curve intersects the demand curve