Chapter 4
Refer to Figure 4-17. At a price of
$2, there is a shortage of 6 units.
Refer to Figure 4-18. At what price would there be an excess supply of 200 units of the good?
$30.
Refer to Figure 4-17. At a price of
$7, there is a surplus of 4 units.
In a market economy, supply and demand are important because they
All of the above are correct.
In competitive markets,
All of the above are correct.
Suppose that Amanda receives a pay increase. We would expect
Amanda's demand for inferior goods to decrease.
Which of the following events would cause a movement downward and to the left along the supply curve for mangos?
The price of mangos falls.
In a competitive market, the quantity of a product produced and the price of the product are determined by
both buyers and sellers.
In a market economy, supply and demand determine
both the quantity of each good produced and the price at which it is sold.
Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause a(n)
decrease in the demand for printers and a decrease in the quantity supplied of printers.
An increase in the price of a good will
decrease quantity demanded.
Which of the following events must cause equilibrium quantity to rise?
demand and supply both increase
At the equilibrium price, the quantity of the good that buyers are willing and able to buy
exactly equals the quantity that sellers are willing and able to sell.
An increase in the price of a good will
increase quantity supplied.
When a surplus exists in a market, sellers
lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated.
The sum of all the individual demand curves for a product is called
market demand.
Another term for equilibrium price is
market-clearing price.
The signals that guide the allocation of resources in a market economy are
prices.
The law of supply states that, other things equal, when the price of a good
rises, the quantity supplied of the good rises.
The quantity supplied of a good is the amount that
sellers are willing and able to sell.
The forces that make market economies work are
supply and demand.
"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded is referred to as
the law of demand.
The demand for a good or service is determined by
those who buy the good or service.
The demand curve for coffee shifts
when any determinant other than price changes.
The quantity demanded of a good is the amount that buyers are
willing and able to purchase.
