MICROECON CH. 3
T/F: A "change in quantity demanded" is a shift of the entire demand curve to the right or to the left.
FALSE
what are the determinants of supply?
technology, resource prices, and number of producers
how is a market DEMAND CURVE derived from individual demand curves?
add up quantities demanded by all individual consumers for each price
how do you derive a market SUPPLY CURVE from individual supply curves?
add up quantities supplied by all individual producers for each price
statement consistent with the LAW OF SUPPLY
an increase in market price will lead to an increase in quantity supplied
characteristics lead to a DOWNWARD SLOPING DEMAND CURVE
an increase in purchasing power as market price decreases; diminishing marginal utility
characteristics leads to a UPWARD SLOPING SUPPLY CURVE
increasing opportunity costs; increasing marginal costs
a price ceiling will result in a shortage only if the ceiling price is (greater than/less than) the equilibrium price
less than
Demand for automobile will Increase, Decrease, or Cannot be Determined? - the price of gas substantially drops
CANNOT BE DETERMINED
Demand for automobile will Increase, Decrease, or Cannot be Determined? - consumers anticipate that the price of small autos will greatly come down in the near future
DECREASE
Supply of auto tires Increase or Decrease? - a decline in the number of firms in the tire industry
DECREASE
Supply of auto tires Increase or Decrease? - an increase in the prices of rubber used in the production of tires
DECREASE
Supply of auto tires Increase or Decrease? - the levying of a per-unit tax on each auto tire sold
DECREASE
Demand for automobile will Increase, Decrease, or Cannot be Determined? - income declines and small autos are an inferior good
INCREASE
Demand for automobile will Increase, Decrease, or Cannot be Determined? - small automobiles become more fashionable
INCREASE
Demand for automobile will Increase, Decrease, or Cannot be Determined? - the price of large automobiles rises(w/the price of small autos remaining the same)
INCREASE
Supply of auto tires Increase or Decrease? - a decline in the price of large tires used for semi trucks and earth-hauling rigs, a substitute in production(w/no change in the price of auto tires)
INCREASE
Supply of auto tires Increase or Decrease? - a technological advance in the methods of producing tires
INCREASE
Supply of auto tires Increase or Decrease? - the expectation that the equilibrium price of auto tires will be lower in the future than currently
INCREASE
Supply of auto tires Increase or Decrease? - the granting of a 50 cent per unit subsidy for each auto tire produced
INCREASE
Movement along supply curve or Shift in the supply curve? - change in market price
Movement along the supply curve (change in price)
Price and Quantity Increase or Decrease? - demand decreases and supply is constant
Price: DECREASES Quantity: DECREASES
Price and Quantity Increase or Decrease? - supply increases and demand is constant
Price: DECREASES Quantity: INCREASES
Price and Quantity Increase or Decrease? - supply increases and demand decreases
Price: DECREASES Quantity: INDETERMINATE
Price and Quantity Increase, Decrease, or Indeterminate? - supply decreases and demand is constant
Price: INCREASES Quantity: DECREASES
Price and Quantity Increase or Decrease? - demand increases and supply is constant
Price: INCREASES Quantity: INCREASES
Price and Quantity Increase or Decrease? - demand increases and supply decreases
Price: INCREASES Quantity: INDETERMINATE
Price and Quantity Increase or Decrease? - demand decreases and supply decreases
Price: INDETERMINATE Quantity: DECREASES
Price and Quantity Increase or Decrease? - demand increases and supply increases
Price: INDETERMINATE Quantity: INCREASES
Movement along supply curve or Shift in the supply curve? - change in factor productivity
Shift in the supply curve (shifts from input prices, technology, expectations, taxes and subsidies, number of sellers, and related goods)
Movement along supply curve or Shift in the supply curve? - change in producer expectations
Shift in the supply curve (shifts from input prices, technology, expectations, taxes and subsidies, number of sellers, and related goods)
Movement along supply curve or Shift in the supply curve? - change in resource prices
Shift in the supply curve (shifts from input prices, technology, expectations, taxes and subsidies, number of sellers, and related goods)
Movement along supply curve or Shift in the supply curve? - change in taxes
Shift in the supply curve (shifts from input prices, technology, expectations, taxes and subsidies, number of sellers, and related goods)
Movement along supply curve or Shift in the supply curve? - change in technology
Shift in the supply curve (shifts from input prices, technology, expectations, taxes and subsidies, number of sellers, and related goods)
Movement along supply curve or Shift in the supply curve? - change in the price of other goods
Shift in the supply curve (shifts from input prices, technology, expectations, taxes and subsidies, number of sellers, and related goods)
statement consistent with LAW OF DEMAND
a reduction in market price will lead to an increase in quantity demanded
suppose that in the market for computer memory chips, the equilibrium price is $50 per chip. if the current price is $55 per chip, then there will be a (shortage/surplus) of memory chips
surplus
