ECON Chapter 3 and 4

A decrease in supply along a fixed demand curve results in:

A higher equilibrium price.

An increase in the demand for a good would be graphically represented by a:

Demand curve shifting to the left

Which statement about Vernon Smith's laboratory experiments is correct?

They were simple

Vernon Smith began his laboratory experiments expecting:

To prove that the supply and demand model was wrong.

A decrease in expected future supply of a good will lead to:

A change in the demand for the good even before the supply actually decreases.

For an inferior good, higher income results in:

A decrease in demand

What does a decrease in supply result in?

A lower equilibrium quantity

Michael graduates from college and his income increases by $40,000 a year. Other things held constant, he decreases the quantity of pizza he buys. For Michael, pizza is:

An Inferior Good

Which of the following are likely to be complements?

Books and book-lights

A shift in the demand curve to the right is best described as a(n):

Increase in demand

According to the text, what happened to the demand for oil from the early twentieth century to the 1970s?

It increased Steadily

New research indicates that running marathons is actually bad for the heart (it increases inflammatory markers associated with heart attacks). This news will:

Lead to a decrease in the demand for running shoes.

If the price of oil were sufficiently high, it would be used only in:

Powering cars and jets

If the supply of oil decreased:

Quantity demanded would decrease

A surplus occurs when the quantity:

Supplied is greater than quantity demanded

What would happen if the demand for oil increased?

The market price would rise

When there is a shortage of a product:

The price will rise

A demand curve indicates that:

The quantity demanded of a good is higher when its price is lower.