Homework Three
Choose the correct statements about competitive markets. 1. All competitive markets are physical places where buyers and sellers meet 2. A single buyer in a competitive market cannot influence the price 3. A competitive market has many sellers 4. In a competitive market, prices are eventually driven down to zero
2. A single buyer in a competitive market cannot influence the price 3. A competitive market has many sellers
The money price of a pack of frozen burritos is $0.20 and the money price of a pack of microwave popcorn is $0.60. The opportunity cost of a pack of microwave popcorn is ? The relative price of a pack of microwave popcorn is an opportunity cost because ______.
3.00 packs of frozen burritos, which is the relative price of a pack of microwave popcorn the relative price tells us how many boxes of ramen noodles we must give up to get a pack of microwave popcorn
In 1998, the price of a barrel of oil was $20. In 2012, the price of a barrel of oil was $106. In 1998, the price of a loaf of bread was $0.86. In 2012, the price of a loaf of bread was $2.32. Between 1998 and 2012, the relative price of a barrel of oil with respect to a loaf of bread _______ and the relative price of a loaf of bread with respect to a barrel of oil _______.
Rose;fell
All of the following will change the demand for onions except _______. An increase in the price of onions _______.
a change in the price of onions decreases the quantity of onions demanded and results in a movement up along the demand curve for onions
The price of food increased during the past year. The law of demand applies to food because when the price of food rises, there is ______.
both a substitution effect and an income effect
If, as the price of a DVD player increases, the quantity of DVDs that people buy decreases, then DVD players and DVDs are _______.
complements
A cellphone and a phone call are ______. A text message and an email are ______.
complements ; substitues
Dairies make low-fat milk from full-cream milk. In the process of making low-fat milk, the dairies produce cream, which is made into ice cream. A rise in the wage rate of dairy workers ______ the supply of low-fat milk. A rise in the price of cream ______ the supply of low-fat milk.
decrease; increase
A rise in the price of low-fat milk ______ the supply of low-fat milk
does not change
With the period of low rainfall extending, dairies raise their expected price of low-fat milk next year. The supply of low-fat milk ______ today. With advice from health-care experts, dairy farmers decide to switch from producing full-cream milk to growing vegetables. The supply of low-fat milk ______.
does not change; decreases
A new technology lowers the cost of producing ice cream. The supply of low-fat milk_______
increases
A demand curve ___________ .
is a marginal benefit curve
The substitution effect influences food purchases because when the price of a certain food rises, other things remaining the same, ______. Consumers ______.
its relative price rises; purchase more of a different food that is less expensive
The quantity demanded of a good or service is ?
measured as an amount per unit of time
Pasta and pizza are ______. A video game and a laptop are ______.
substitues ; complements
Coal and oil are ______. A skateboard and an iPod are ______.
substitutes ; complements
A supply curve _____.
tells us the lowest price at which someone is willing to sell
The income effect influences food purchases because when the price of a certain food rises, other things remaining the same, ______. Consumers ______.
the price rises relative to income; cannot afford to buy all the things they previously bought, so they normally buy less of the food that has experienced the price rise
Pizza and sausage are ______. Wheat and rye are ______.
complements; substitutes
