Micro: Test Bank Chapter 3

In economics, the demand for a good refers to the amount of the good that people:

will buy at various prices

After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is:

a shift of the demand curve for beef to the left.

When quantity demanded decreases in response to a change in price:

here is a movement up along the demand curve.

Which of the following would reduce the supply of microcomputers?

higher wage rates for the workers that assemble the computers

The demand schedule for a good:

indicates the quantities that will be purchased at alternative market prices.

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the.

law of demand

If a firm faces, while the prices for the output the firm produces remain unchanged, a firm's profits will increase.

lower costs of production

When economists talk about supply, they are referring to a relationship between price received for each unit sold and the

quantity supplied

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the.

supply curve to the right

But nearly all supply curves share a basic similarity, they slope:

up from left to right

Andy views beer and pizza as complements to one another. If the price of pizza decreases,economists would expect:

Andy's demand for beer to increase.

If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:

Goods X and Y are complement goods.

Interpret the following statement: "An increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market."

The statement is correct.

A change in price of a good or service typically causes for that specific good or service:

a change along the supply curve

Any given demand or supply curve is based on the ceteris paribus assumption that.

all else is held equal

The term "ceteris paribus" means that:

all variables except those specified are constant

The nature of demand indicates that as the price of a good increases:

buyers desire to purchase less of it

When, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.

costs of production fall

The _____ is the only price where quantity demanded is equal to quantity supplied.

equilibrium price

the _______is the quantity where quantity demanded and quantity supplied are equal at a certain price.

equilibrium quantity

If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. This is known as

excess demand

The demand curve for a typical good has a(n):

negative slope because some consumers switch to other goods as the price rises.

__________ are enacted when discontented sellers, feeling that prices are too low, appeal to legislators to keep prices from falling.

price floors

The downward slope of the demand curve again illustrates the pattern that asrises,decreases.

price; quantity demanded

A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis,and, shown on the horizontal axis.

quantity

A demand curve shows the relationship between price andon a graph.

quantity demanded

_____refers to the total number of units that are purchased at that price

quantity demanded

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of:

the supply curve

If new manufacturers enter the computer industry, then (ceteris paribus):

the supply curve shifts to the right

According to the law of supply:

there is a direct relationship between price and the quantity supplied