Micro

If the demand curve for product B shifts to the right as the price of product A declines, then:

A and B are complementary goods.

The production possibilities curve bows outward from the origin because:

opportunity costs increase as the production of a good increases.

Economics is a social science concerned with:

the best use of scarce resources to achieve the maximum satisfaction of economic

The income and substitution effects account for:

the downward sloping demand curve.

Graphically, the market demand curve is:

the horizontal sum of individual demand curves.

If an effective ceiling price is placed on hamburgers then:

the quantity demanded will exceed the quantity supplied. a black market for hamburger may evolve. that consumers may want government to ration hamburger.

Opportunity cost is best defined as:

the value of the best foregone alternative.

With a downward sloping demand curve and an upward sloping supply curve for a product, an increase in consumer income will:

increase equilibrium price and quantity if the product is a normal good.

Given a downward sloping demand curve and an upward sloping supply curve for a product, an increase in the price of a substitute good will:

increase equilibrium price and quantity.

The production possibility curve:

is the boundary between attainable and unattainable outputs.

The upward slope of the supply curve reflects the:

law of supply.

Which of the following will not cause the demand for product K to change?

a change in the price of K

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

an increase in supply.

Which of the following statements is correct?

If supply increases and demand decreases, equilibrium price will fall.

If a consumer purchases just two goods, good X and good Y. The ratio of the

D) slope of the budget line.

A line or curve that shows the various combinations of two products a consumer can purchase with a specific amount of money income is:

a budget line.

In drawing a production possibilities curve we hold constant:

both technology and resource supplies.

The demand curve for a product might shift as the result of a change in:

consumer tastes, consumer incomes, the prices of related goods.

When an economist says that the demand for a product has increased, this means that:

consumers are now willing to purchase more of this product at each possible price.

In which of the following instances will the effect on equilibrium price be dependent on the magnitude of the shifts in supply and demand?

demand rises and supply rises.

All of the following are held to be constant when the supply curve for a product is drawn, except the:

price of the product.

If the supply and demand curves for a product both decrease, then equilibrium:

quantity must decline, but equilibrium price may either rise, fall, or remain

The term quantity demanded:

refers to the amount of a product that will be purchased at some specific price.

The purpose of the ceteris paribus assumption used in economic analysis is to:

restrict the analysis to the effect of a single economic factor.

An improvement in production technology will:

shift the supply curve to the right.

An increase in money income:

shifts the consumer's budget line to the right.

A leftward shift of a product supply curve might be caused by:

some firms leaving an industry.