Chapter 3
The money price of a half gallon of milk is $1.10, and the relative price of a half gallon of milk in terms of burritos is 2.00 packs of frozen burritos per half gallon of milk. What is the money price of a pack of frozen burritos?
.55
The money price of a box of ramen noodles is .20, and the money price of a can of shave gel is $1.00. What is the opportunity cost of buying a can of shave gel?
5 boxes of ramen noodles And the relative price of a can of shave gel is the money price of a can of shave gel divided by the money price of a box of ramen noodles
The law of supply states that other things remaining the same, the _______ the price of a good, the _______. A. higher; greater is the quantity supplied B. lower; greater is the quantity supplied C. higher; smaller is the quantity supplied D. higher; greater is the supply of the good
A
demand curve
A demand curve that illustrates the law of demand is downward sloping, and as the price falls, the quantity demanded increases, and as the price rises, the quantity demanded decreases.
supply curve
A supply curve that illustrates the law of supply is upward slopinglong dashas the price falls, the quantity supplied decreases, and as the price rises, the quantity supplied increases.
When a surplus arises, the price ______ to its equilibrium, which _______. A. falls; increases the quantity demanded and decreases the quantity supplied B. rises; decreases demand and increases supply C. rises; decreases the quantity demanded and increases the quantity supplied D. falls; increases demand and decreases supply
A.
When a shortage arises, the price ______ to its equilibrium, which _______. A. falls; increases demand and decreases supply B. rises; decreases demand and increases supply C. falls; increases the quantity demanded and decreases the quantity supplied D. rises; decreases the quantity demanded and increases the quantity supplied
D
Law of supply
Other things remaining the same, the higher the price of a good, the greater is the quantity supplied; and the lower the price of a good, the smaller is the quantity supplied.
Law of demand
Other things remaining the same, the higher the price of a good, the smaller is the quantity demanded; and the lower the price of a good, the greater is the quantity demanded.
Given the law of demand, you would expect the rise in the price of gasoline to ______ the quantity of gasoline demanded and ______ the demand for gasoline. A. decrease; decrease B. not change; decrease C. decrease; not change D. increase; decrease
c.
The law of demand states that ______, the ______ the price of a good, the smaller is the quantity demanded. A. other things remaining the same; lower B. even when other factors change; higher C. even when other factors change; lower D. other things remaining the same; higher
d
Sports cars and gasoline are compliments. If the price for sports cars increases, then the deman for gasoline will....
decrease; and the demand curve will shift leftward
An increase in the price of a DVD player _______.
decreases the quantity of DVD players demanded and results in a movement up along the demand curve for a DVD player
Inferior good
demand decreases as income increases
normal good
demand increases as income increases
Competitive market
has many buyers and sellers for the same thing, and no one buyer or seller can affect the price
The demand for DVD players does not change when a change in _______ occurs.
price quantity demanded changes when a change in price occurs. the point will change along the demand curve.