Hw 2

Movement along the demand curve

change in costs of production

primary difference between a change in supply and change in quant

change in quant sup is a movement along the sup curve, and chaing in sup is a shift of sup curve

primary difference between change in demand and quantity demanded is

change in quantity demanded is movement along demand curve, change in demand is a shift in the demand curve

according to concept of invis hand

competitive free market systems are efficient undr certain conditions

The bulk of the nation's output is produced by corporations

corporations

decrease in demand, with no change in supply, will lead to ___ in equilibrium quantity and ___ in equilibrium price

decrease; decrease

There is equilibrium in the market when

no shortage, no surplus, price is established where the supply curve and demand curve intersect

If gov sets out to help low income people

price ceiling has been set and shortage of rental units may occur

in standard supplay and demand graph

quantity goes on the horizontal axis while price goes on the vertical

economists say "the price is too high" they mean that

quantity supplied is greater than quantity demanded

if demand and supply both shift to the right, then:

quantity will go up, but price could go up, down or stay the same

Which of the following shifts the demand curve for new textbooks to the right

an increase in college enrollments

A maximum price set below the equilibrium price is a

price ceiling

decrease in sup means

shift to the left of the entire supply curve

which of the following always results in an increase in price and quantity?

an increase in demand with no change in supply

true that equilibrium quant will always go up if sup

and demand both increase

It's certain that the equilibrium price will fall when

the supply curve shifts to the right and the demand curve shifts to the left

Which of the following would not change the demand for automobiles?

a change in the cost of steel

The equilibrium price in a market is established subject to all other things unchanged condition (ceterius paribus) and, therefore, very well may change due to

a change in the price of resource inputs used to produce the good

a market is a set of arrangements where

buyers and sellers can get together and buy and sell

price controls

can result in inequitable outcomes

A negative relationship between the quantity demanded and price is called the law of

demand

market shortage occurs if quantity:

demand is greater than quant sup

Those who make economic policy concerning price controls often do so in order to

establish a more equitable result based on normative judgements

concept of invisible hand is important

free markets, market systems are efficient, laissez faire.

persistent shortage may occur if

government imposes a price ceiling

decrease in price of egges all other thigns unchanged

greater quantity of eggs demanded

an increase in demand all other things unchanged will result in ___ in the equilib price and ___ in equilib quantity

inc, inc

a shift of a demand curve to the right, all other things unchanged will

increase equilibrium price and quantity

a decrease in price of good will result in

increase in quantity demanded

dramatic reductions in costs of producing computers in 1980s and equally dramatic increases in demand for computers resulted in

increase in quantity of computers and reductions in price of computers

price ceiling will have no effect if

it is set above the equilibrium price

price ceiling which lead to shortages will impose costs on society because they

lead to long waiting lines, result in black market prices, higher than the market determined price

if demand curve shifts to the left

lower equilibrium price and quantity would result

a ceiling price set in the policy of rent controls

may result in some people who rent out units to leave the business because they cannot cover costs

supply is best defined as

relationships between the quantity of a good or service sellers are willing to offer for sale and the independent variables that determine quantity

competitive market when price is below equilibrium there will be pressure for the price to

rise

demand is defined as

schedule that shows how much will be purchased at various rices during a particular period all other things unchanged

Which of the following will result in an increased price of milk?

shift to the right of the demand curve for milks

supply curve that is upward sloaping menas

suppliers will want to sell more at higher prices

relationship between value and price of a stock suggests

the equilibrium price of a stock strikes a balance between those who think the stock is worht more than those who think its worth less at current price, it is market's best guess regarding the expected value of comps future profits

The intersection of the supply and demand curves indicates

the equilibrium solution in the market