Econ 202 ASSES chapter 4 homework

What is meant by holding all else equal and how is this concept used when discussing movements along the demand​ curve? A. everything else in the economy is held​ constant, including the price of the good. B. All variables that can affect the demand for the good are held constant. C. All variables in the model are set to equal values. D. All of the above.

all variables that can affect the demand for the good are held constant

If the demand for pinot noir suddenly shifts sharply to the​ right, we would expect to see ________ (a decrease, an increase, no response) in the demand for land in​ Sonoma, which would __________ (increase, decrease, remain the same) the equilibrium price of land.

an increase, increase

In a perfectly competitive​ market, sellers​ _________ and buyers​ _________. A. cannot charge more than the market​ price; cannot pay less than the market price. B. are able to charge more than the market​ price; are able to pay less than the market price. C. cannot charge more than the market​ price; are able to pay less than the market price. D. are able to charge more than the market​ price; cannot pay less than the market price.

cannot charge more than the market​ price; cannot pay less than the market price

Given the supply and demand curves on the​ right, when the price of the good is​ $20, we say that the market is in ___________ (competitive equilibrium, unbalance distort) At this​ price, we know that the quantity supplied is _________ (more than, less than, equal to) the quantity demanded.

competitive equilibrium, equal to

Market demand is derived by​ __________. A. fixing the quantity and adding up the prices that each buyer pays. B. fixing the price and adding up the quantities that each buyer demands. C. adding up both the prices each buyer pays and the quantities that each buyer demands. D. dividing each​ buyer's demand by the total number of consumers in the market.

fixing the price and adding up the quantities that each buyer demands

As a firm produces more of a​ good, the cost of producing each additional unit ___________ (stays the same, increases, decreases) This implies that the marginal cost of producing a good ______________ (decreases, increases, does not change) as you make more of that good. The supply curve represents​ ___________. A. the minimum price buyers are willing to pay to buy an extra unit of a good. B. the minimum price sellers are willing to accept to sell an extra unit of a good. C. the maximum price buyers are willing to pay to buy an extra unit of a good. D. the maximum price sellers are willing to accept to sell an extra unit of a good.

increases, increases, the minimum price sellers are willing to accept to sell an extra unit of a good

Given this​ information, if the price of a book is ​$25​, the quantity demanded of books will be __________ (greater than, equal to, less than) the quantity of books demanded when the price is $10 per book.

less than

Since both pinot noir wine and Gravenstein apples use the same land in​ Sonoma, California, a sharp increase in demand for pinot noir wine will result in a ________ (higher, lower) price for Gravenstein apples and a ___________ (higher, lower) equilibrium quantity.

lower, lower

Does the shape of the market demand curve differ from the shape of an individual demand​ curve? A. Yes, individual demand curves tend to be​ downward-sloping, while market demand curves are​ upward-sloping. B. Yes, individual demand curves tend to be​ upward-sloping, while market demand curves are horizontal. C. No, they both tend to be​ upward-sloping curves. D. No, they both tend to be​ downward-sloping curves.

no, they both tend to be​ downward-sloping curves

The relationship that exists between these two variables can be described as ____________ (economically related, negatively related, positively related)

positively related

When one of the five major factors​ changes, causing an increase in​ demand, the demand curve shifts _____________ (leftward, rightward, upward and rightward)

rightward

When one of the four major factors​ changes, causing an increase in​ supply, the supply curve shifts ____________ (up and to the right, upward, rightward) .

rightward

Suppose the price of apples increases and the demand for bananas increases. You determine that these goods must be _____________ (complements, substitutes, unrelated)

substitutes

Coffee and tea are likely __________(substitutes, complements) because an increase in the price of coffee ____________ (increases, decreases) the demand for tea.

substitutes, increases

Which of the following is not one of the four major factors that shifts the supply curve when it​ changes? A. The income of consumers B. Sellers' beliefs about the future C. The number of sellers D. Technology used in production

the income of consumers

Which of the following examples best approximates a competitive​ market? A. The market for Fminus−35 fighter planes B. The market for Jackson Pollock paintings C. The market for Tesla electric cars D. The market for soybeans in the United States

the market for soybeans in the united states

Which of the following is not one of the five major factors that shifts the demand curve when it​ changes? A. The price of the good itself B. Expectations about the future C. Income and wealth D. The price of complementary goods

the price of the good itself

The Law of Supply states that as the price of a good​ increases, ceteris paribus​, _____________(the quantity supplied, quantity demanded, demand, supply) of that good increases. This can be shown graphically with an ____________ (upward-sloping, downward-sloping, rightward) supply curve or numerically in a table using a __________ (supply schedule, data table) .

the quantity supplied, upward-sloping, supply schedule

The five major factors that shift the demand curve when they change​ are:

1. Tastes and preferences 2. Income and wealth 3. Availability and prices of related goods 4. Number and scale of buyers 5.​ Buyers' beliefs about the future

Which of the following is a feature of a perfectly competitive​ market? A. There is only one seller of a commodity. B. The government rations commodities. C. The product of each seller differs marginally from its rival products. D. Each seller is too small to influence the market price.

each seller is too small to influence the market price

In a perfectly competitive​ market, if one seller chooses to charge a price for its good that is slightly higher than the market​ price, then it will​ _________. A. lose all or almost all of its customers. B. see a small decrease in its number of customers. C. see no change in its number of customers. D. All of the above are equally likely.

lose all or almost all of its customers

We make the assumption of holding all else equal when considering demand curves since we want to focus on the changes in the quantity demanded that result from changes in __________ (the price of a good and incomes, only the price of a good, only the income of consumers) .

only the price of a good

Land in​ Sonoma, California, can be used to either grow grapes for pinot noir wine or to grow Gravenstein apples. Given this​ information, what is the relationship between pinot noir wine and Gravenstein​ apples? A. They are substitutes in consumption. B. They are complements in consumption. C. They share a common input. D. They are completely unrelated.

they share a common input