Smartbook 5

A change in quantity supplied is caused by an increase or decrease in the ______ of the product under consideration and nothing else.

price

The interaction between buyers and sellers, which determines the equilibrium _____ and _____, is illustrated by the intersection of the demand and supply curves

price output

A change in ______ causes a movement along the supply curve

product price

The production of a good or service in the least costly way is known as _____ effiency

productive

Competition among corn producers forces them to use the best technology and right mix of productive resources; otherwise their costs will be too high relative to the market price and they will be unprofitable. This is best described as ______.

productive efficiency

A producer's willingness and ability to produce a specific quantity of a good due to a change in the price of the good is referred to as a change in

quantity supplied

A change in ______ causes the supply curve of a product to shift leftward or rightward.

resource prices

A ______ the supply curve represents a change in supply while a ______ the supply curve represents a change in the quantity supplied.

shift of; movement along

The rationing function of prices refers to the ability of the competitive forces of supply and demand to establish a price at which ______.

buying and selling decisions are consistent

If the supply of corn increases, holding demand constant, the equilibrium price of corn will ______ and the equilibrium quantity will ______.

decrease; increase

A shortage results from an excess of quantity

demanded

When a price ceiling is established, the new price and quantity are now at ______.

disequilibrium

The interaction between buyers and sellers determines the equilibrium price and the ______ quantity

equilibrium

The interaction between buyers and sellers determines the equilibrium price and the _______ quantity

equilibrium

At the market _____ price, quantity demanded equals quantity ________

equilibrium supplied

Consumers of wheat-based products pay ______ prices if there is a price floor set for wheat

higher

Which of the following will cause a change in supply and not quantity supplied? (Check all that apply.)

Technology Producer expectations Number of sellers

True or false: A change in supply is represented by a movement along the curve, not a shift of the curve

true

Which of the following scenarios describe the appropriate effects on equilibrium price and quantity due to a decrease in supply while holding everything else constant?

A fishing tax is placed on all shrimp and the equilibrium price increases while equilibrium quantity decreases. An oil spill causes several fishermen to leave the shrimp business and the equilibrium price of shrimp increases while quantity decreases.

Which of the following correctly states the effects on equilibrium price and quantity due to an increase in demand, while holding everything else constant?

3-D televisions become popular and the equilibrium price and quantity of 3-D televisions increase.

A change in supply is represented by a ______ the supply curve while a change in quantity supplied is represented by a _______ the supply curve.

A - Shift of B - movement along

Which conditions typically arise from the limits of price movement imposed by a price ceiling for a product?

A black market A rationing problem

______,while holding demand constant, results in an increase in the equilibrium price of the good, but a decrease in the equilibrium quantity of the good.

A decrease in the supply of a good

Which of the following refers to a change in quantity supplied?

A movement from one point to another on a fixed curve

Which of the following in the rental market for housing benefits renters, but makes it unprofitable for suppliers or landowners?

A price ceiling

Which of the following best describes why a surplus would not persist for very long?

A surplus prompts sellers to lower the price to encourage buyers by increasing the incentive to buy.

Which of the following refers to a particular apportionment or mix of goods and services most highly valued by society?

Allocative efficiency

Which of the following reflects an increase in demand, while holding supply constant?

An increase in both equilibrium price and quantity

Which of the following correctly state the effects on equilibrium price and quantity due to an increase in demand, while holding everything else constant?

Consumers expect the price of shrimp to increase in the future, therefore the equilibrium price and quantity increase now. 3-D televisions become popular, therefore the equilibrium price and quantity increase. The price of Coke increases due to Coke's popularity, therefore the equilibrium price and quantity of Pepsi increase.

Equilibrium price in a market changes when there is a change in which of the following?

Demand Supply

At the equilibrium price, quantity _____ equals quantity _______

Demand supply

With a price ceiling, the quantity of a product _____will exceed quantity _______ resulting in a persistent shortage of the product.

Demanded Supplied

at what price is there neither a surplus nor a shortage

Equilibrium price

True or false: A change in supply is represented by a movement along the curve, not a shift of the curve.

False - change in supply is represented by a SHIFT of the supply curve, not a movement along the supply curve.

Which of the following best explains why economists "sound the alarm" when politicians advocate government-controlled prices such as price ceilings or price floors?

Government-controlled prices cause surpluses. Government-controlled prices distort resource allocation. Government-controlled prices cause shortages . Government-controlled prices may cause potential environmental damage.

At the equilibrium price, there is neither a ____ nor a _____ because the quantity demanded by consumers at a specific price is identical to the quantity supplied at that same price.

Shortage Surplus

The only factor that causes a movement along the supply curve is:

Price

In which of the following situations do governments intervene to prevent prices from rising above or falling below their equilibrium levels?

Prices are too low for firms. Prices are too high for consumers.

A change in ______ causes a movement along the supply curve.

Product price

A decrease in demand while holding supply constant ______ equilibrium price and ______ equilibrium quantity.

Reduces Reduces

What is the price where the intentions of buyers and sellers match?

The equilibrium price

What determines market price and equilibrium output in a market?

The interaction of buyers and sellers

Other things equal, which of the following is correct regarding increasing the number of sellers in an industry?

The market supply becomes greater

At equilibrium quantity, which of the following is true?

The quantity demanded equals quantity supplied

The ability of the competitive forces of supply and demand to establish a price at which selling and buying decisions are consistent is called

The rationing function of prices

A decrease in demand while holding supply constant results in

a decrease in both equilibrium price and quantity

A decrease in demand while holding supply constant results in _______.

a decrease in both equilibrium price and quantity

As firms leave an industry, supply decreases. This is illustrated as a shift of the supply curve to the

left

A large surplus will prompt competing sellers to ______ of their goods.

lower the price

The equilibrium price where the quantity demanded equals the quantity supplied is otherwise known as the ______ clearing price.

market

On a simple supply model, a change in quantity supplied is illustrated by a ______ and a change in supply is illustrated by a ______.

movement along the supply curve; shift of the supply curve

The ______ of a good or service by a producer essentially reflects the marginal cost of producing the good or service.

supply

Marginal benefit

the additional utility gained from consuming one more unit of a good or service.

A decline in the price of corn will decrease ______ per week, and an increase in the number of corn producers will increase the ______.

the quantity of corn supplied; supply of corn

Equilibrium price and equilibrium quantity occur where

the supply curve intersects the demand curve

Equilibrium price and equilibrium quantity occur where _____

the supply curve intersects the demand curve

An increase in the number of hair salons will cause:

the supply curve of hair salon services to shift to the right