Law of supply and demand economics

As the price of fries increases, the demand for ketchup falls, therefore these goods are:

complements

There is a new nationwide fad: the disco burger, impacting the demand for beef. Which of the following is a reason for a demand shift?

demand increases

National income rises 2%

goes along with demand

Nationwide strike began at midnight

the producer number went down.

Auto producer goes bankrupt; closes operation

they want have anymore money; so they will decrease.

Price elasticity of demand is:

very responsive to price change; you do not buy if price increases just a little.

Burger King whoppers-McDonald's Lowers the price of Big Macs

Demand will decrease, shifting to the left.

Charcoal Shortage Threatens Memorial Day Cookouts

Demand will decrease, shifting to the left.

Cigars-A new study shows that smoking cigars results in lots of wrinkles.

Demand will decrease, shifting to the left.

Oreo cookies-The price of Milk increases

Demand will decrease, shifting to the left.

Real income for U.S. Drops for Third Month

Demand will decrease, shifting to the left.

Bike helmets-The price of bicycles goes down.

Demand will increase, shifting to the right.

Boots-Old Navy launches an ad campaign called "Everyone in cowboy boots"

Demand will increase, shifting to the right.

Butter-The price of margarine goes up.

Demand will increase, shifting to the right.

Millions of Immigrants Swell U.S. Population

Demand will increase, shifting to the right.

Nationwide Fad: The Disco-Burger

Demand will increase, shifting to the right.

An economist would probably state that if the situation described below continues, people would most likely purchase Situation: The Price of orange juice rises and continues to rise over several months.

Substitutes for orange juice

Oranges-There's an early frost which destroys much of the crop.

Supply will decrease, shifting to the left.

Paper-The price of wood pulp goes up.

Supply will decrease, shifting to the left.

Wheat-A drought destroys much of the crop.

Supply will decrease, shifting to the left.

Wine-The average wage of grape harvesters rises by 10%

Supply will decrease, shifting to the left.

Apples-A new pesticide is developed which controls tent caterpillars

Supply will increase, shifting to the right.

If an increase in income results in an increase in the demand for eggs, then eggs are:

a luxury good

Demand for milk tends to be price-inelastic because milk is considered

a necessity

A surplus implies the market price is?

a surplus means that at a given price, quantity supplied is greater than quantity demanded.

If the profit opportunity for a given product increases, the most likely result would be

an increase in the number of producers.

Auto workers' union agrees to wage cuts. Which of the following is the reason the supply of foreign/domestic cars will shift?

b/c the wages were cut, and more people won't get it.

Buyers reject new models

cause demand will be low.

Auto workers' union agrees to wage cuts

change in cost production.

Real income for the U.S. drops for the third month, impacting the demand for beef. Which of the following is a reason for a demand shift?

change in income

A shift in a curve (demand or supply) is caused by anything but

change in price

An economist would probably agree that demand and supply schedules are PRIMARILY based on?

decisions made by consumers and producers in a market.

The price of wood pulp goes up. How does this impact the market for paper?

demand will decrease it will go left.

What type of relationship is between price and quantity in the supply curve?

direct relationship between each other.

If consumers readily switch to substitutes when the price of butter increases by only a small amount, the demand for butter is said to be

elastic

When buyers will purchase exactly as much as sellers are willing to sell, what is the condition that has been reached?

equilibrium

A market

exists whenever buyers and sellers engage in exchange.

Know the correct definition of Law of Supply?

is the microeconomic law that states that, all other factors being equal, as the price of a good or service increases, the quantity of goods or services that suppliers offer will increase, and vice versa.

How is the current demand for a good related to its future price?

it will affect whether the price will increase or decrease.

Product X is in high demand. The price of Product X rises by 15%. The most likely result of these events would be an increase in

keep making more; increase in product.

Millions of immigrants swell the U.S. population, impacting the demand for beef. Which of the following is a reason for a demand shift?

number of consumers

Know what is a determinate of demand (reason for shift)?

prices of other goods go up which is the change in demand.

Which of the following is not a determinate of supply (reason for shift)?

producer expectations

Cost of steel rises

production cost

If the first good is an inferior good, an increase in income will:

shift the demand curve for good A leftward because people will not buy this good.

Buyers reject new models of foreign/domestic cars. Which of the following choices is the best answer to this scenario?

shift the demand curve; people won't like if they don't like it.

There is a charcoal shortage which threatens memorial day cookouts. This impacts demand for beef. Which of the following is a reason for a demand shift?

shortage to charcoal

The demand curve shows an inverse, or negative, relationship between

shows price of a product and quantity demanded, shows negative relations as long as everything else remains the same consist of quantity demanded.

If the price of pork increases and consumers buy more chicken, then chicken and pork are:

substitutes

A new pesticide is created which controls tent caterpillars. How does this impact the market for apples?

supply increases and shifts to the right.

New robot technology increases efficiency

technology change

Know what effected the wheat prices during the Great depression.

the dusk bowl helped b/c it cut supply.

Demand for a product will normally change when there is a change in any one of the following EXCEPT

the elasticity of product supply