macro chpt 3

The prices of the used in the production process help determine the costs of production incurred by firms.

Blank 1: resources, resource, inputs, or input

What are two goods called when a change in the price of one good has little or no effect on the demand for the other? Multiple choice question. Complementary goods Substitute goods Superior goods Independent goods

Independent goods

Which of the following are substitutes? Multiple choice question. Pepsi and Coca-Cola Bleach and cheese Guns and bullets Peanut butter and crackers

Pepsi and Coca-Cola

What determines market price and equilibrium output in a market? Multiple choice question. Quantity supplied The interaction of buyers and sellers The number of sellers in a market Input prices Quantity demanded

The interaction of buyers and sellers

A decrease in demand while holding supply constant results in ______ in both equilibrium price and quantity. Multiple choice question. an increase a decline a decline followed by an increase no change

a decline

A decrease in demand while holding supply constant results in _______. Multiple choice question. an increase in equilibrium price and decline in equilibrium quantity a decrease in equilibrium price and an increase in equilibrium quantity a decrease in both equilibrium price and quantity an increase in both equilibrium price and quantity

a decrease in both equilibrium price and quantity

The willingness and ability of a consumer to buy a normal product falls because of ______. Multiple choice question. no change in income a raise in wages a rise in income a fall in income

a fall in income

One of the determinants of demand is ______ expectations. Multiple choice question. producer supply consumer input price

consumer

Other things equal, if consumers believe that gas prices will rise in a week, the demand for gas today will ______. Multiple choice question. increase not change be lower than next week decrease

increase

Other things equal, if consumers believe that gas prices will rise in a week, the demand for gas today will ______. Multiple choice question. not change decrease be lower than next week increase

increase

The price of ______ goods is a determinant of demand. Multiple choice question. inexpensive related producer intermediate independent

related

In the marketplace, what is a good that is used together with another good?

A complementary good

True or false: A price at or above the price floor is illegal.

False

A ______ good is one that is used together with another good. Multiple choice question. normal substitute exception complementary

complementary

The determinants of the supply of a good are any factors other than the product's ______ that cause the supply curve of the good to shift. Multiple choice question. cost price

price

The ability of the competitive forces of supply and demand to establish a price at which selling and buying decisions are consistent is called ______. Multiple choice question. equilibrium allocation perfect pricing the rationing function of prices equilibrium price

the rationing function of prices

Which of the following is a complement to hamburger patties? Multiple choice question. Paper cups Hot dogs Hamburger buns Chicken

Hamburger buns

Which of the following does not exemplify an improvement in technology affecting supply? Multiple choice question. Increased subsidies to farmers for producing more corn The introduction of the mass-assembly line Invention of new vaccines Advances in producing flat panel computer monitors that have greatly reduced their cost

Increased subsidies to farmers for producing more corn

Select all that apply In which of the following situations do governments intervene to prevent prices from rising above or falling below their equilibrium levels? Multiple select question. Prices are too high for consumers. Prices are too high for firms. Prices are too low for firms. Prices are too low for consumers.

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

If costs of production rise, the producer has an incentive to produce (one word) output.

Blank 1: less, lower, fewer, decreased, reduced, lesser, or low

The prices of substitute goods in production is a determinant of

Blank 1: supply

True or false: For many people, Coke and Pepsi are complements.

false

True or false: The law of demand can be supported by the income effect.

true

Which of the following causes consumers to buy larger quantities of a product at each possible price? Multiple choice question. An increase in the number of buyers. A decrease in the price of a substitute good. An unfavorable change in consumer tastes. An increase in the price of a complementary good.

An increase in the number of buyers.

Which of the following are determinants of demand?

Consumer expectations Number of buyers Consumer income Consumer tastes Prices of related goods

Select all that apply Which of the following are determinants of supply? Multiple select question. Prices of other goods Taxes and subsidies Producer expectations Number of buyers

Prices of other goods Taxes and subsidies Producer expectations

A change in , rather than a change in the quantity supplied, means a change in the schedule or a shift of the supply curve.

supply

Improvements in technology is a determinant of ______. Multiple choice question. quantity supplied supply demand quantity demanded

supply

When the price of a product falls, demand for its substitute will _______. Multiple choice question. decrease stay the same increase

decrease

When the price of a product falls, demand for its substitute will _______. Multiple choice question. increase decrease stay the same

decrease

Which of the following is a complement to hamburger patties? Multiple choice question. Hot dogs Paper cups Hamburger buns Chicken

Hamburger buns

All the following are the determinants of demand except ______. Multiple choice question. the prices of related goods consumer tastes price of substitutes in production consumers' incomes consumer expectations

price of substitutes in production

The determinant of supply dealing with alternative products that can be produced by firms is called ______. Multiple choice question. resource prices taxes and subsidies number of producers or competitors in a market producer expectations price of substitutes in production

price of substitutes in production

In the marketplace, what is a good that is used together with another good? Multiple choice question. A superior good A complementary good An independent good A substitute good

A complementary good

Which exemplifies a pair of substitute goods? Multiple choice question. Golf balls and golf clubs Snow boards and lift tickets Hot dogs and hamburgers CDs and CD players

Hot dogs and hamburgers

Select all that apply Which of the following factors increase the demand for any good or service? Multiple select question. Consumer expectations that either prices or income will fall in the future An increase in the number of buyers An increase in the price of a substitute good An unfavorable change in consumer tastes for the product A rise in consumer income if the product is a normal good

An increase in the number of buyers An increase in the price of a substitute good A rise in consumer income if the product is a normal good

______ resource prices raise production costs and, assuming a fixed product price, ______ profits. Multiple choice question. Higher; higher Higher; reduce Lower; reduce Lower; higher

Higher; reduce

A change in the number of buyers is a determinant of market .

demand

Consumer expectations are a determinant of

demand

Select all that apply In which of the following cases the demand for a normal good would likely increase? (Check all that apply.) Multiple select question. A decrease in the price of complementary goods An increase in the number of buyers An increase in the price of the good A decrease in consumer income

A decrease in the price of complementary goods An increase in the number of buyers

Select all that apply All competitive markets involve which of the following? Multiple select question. Demand Government regulators Supply Price Quantity

Demand Supply Price Quantity

Which of the following is a determinant of demand? Multiple choice question. Resource prices Technology Producer expectations Income

Income

The supply curve measures quantity ______ on the horizontal axis and ______ on the vertical axis. Multiple choice question. demanded; price price; supplied price; demanded supplied; price

supplied; price

Improvements in technology is a determinant of ______. Multiple choice question. demand quantity supplied supply quantity demanded

supply

Market is a schedule or curve showing the various amounts of a product that producers are willing and able to make available for sale at each possible price during a specific period

supply

The number of sellers or competitors in a market is a determinant or shifter of the (one word) curve.

supply

______,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. Multiple choice question. A decrease in the supply of a good An increase in the supply of a good A rightward shift of the supply curve of a good An unchanged supply of a good

A decrease in the supply of a good

Which exemplifies a pair of complementary goods? Multiple choice question. A Toyota truck and a Ford truck Home Depot and Lowe's A hot dog and relish

A hot dog and relish

Which of the following in the rental market for housing benefits renters, but makes it unprofitable for suppliers or landowners? Multiple choice question. A negative externality A price floor A price ceiling Equilibrium price

A price ceiling

Which of the following refers to government financial assistance for the production of a good which lowers producers' costs and increases supply? Multiple choice question. A tax A bailout A loan A subsidy

A subsidy

In the marketplace, what is a good that can be used in place of another good called? Multiple choice question. An inferior good A complementary good A superior good A substitute good

A substitute good

Which statement about demand and supply is true? Multiple choice question. An increase in the price of a good is likely to decrease the supply of the good. An increase in consumer income shifts the demand curve to the left. An increase in the price of a good shifts the supply curve to the left. An increase in consumer income is likely to increase the demand for a normal good.

An increase in consumer income is likely to increase the demand for a normal good.

Which of the following exemplifies a change in buyers' tastes? Multiple choice question. An increase in the number of buyers in a market. A decrease in national income because of a recession. A decrease in the average price of gasoline during the winter. An increase in demand for digital cameras over 35mm cameras.

An increase in demand for digital cameras over 35mm cameras.

Which of the following is likely to cause an increase in the demand for a good or service? Multiple choice question. An increase in income and the good is inferior An increase in the number of sellers An increase in the number of buyers An increase in the price of a complementary good

An increase in the number of buyers

Select all that apply Which of the following statements are true? Multiple select question. A decrease in consumers' income would decrease the demand for an inferior good. An increase in the price of a normal good would decrease the quantity demanded of the good. An increase in consumers' income would decrease the demand for a normal good. A decrease in consumers' income would decrease the demand for a normal good.

An increase in the price of a normal good would decrease the quantity demanded of the good. A decrease in consumers' income would decrease the demand for a normal good.

A price (floor/ceiling) is the maximum legal price a seller may charge for a product or service.

Blank 1: ceiling or cap

A favorable change in consumer tastes and preferences for a product will demand, shifting the demand curve to the (right/left).

Blank 1: increase or raise Blank 2: right or rightward

In general, a firm will (increase/decrease) the output of a good or service if the price of the good is rising.

Blank 1: increase, raise, expand, or boost

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

Blank 1: market

Which of the following shows the effects on equilibrium price and quantity due to an increase in supply and a simultaneous decrease in demand? Multiple choice question. Equilibrium price rises and the change in equilibrium quantity is indeterminate. Equilibrium price falls and the change in equilibrium quantity is indeterminate. The change in equilibrium price is indeterminate and equilibrium quantity falls. The change in equilibrium price is indeterminate and equilibrium quantity rises.

Equilibrium price falls and the change in equilibrium quantity is indeterminate.

Which of the following has the greatest effect on the quantity supplied? Multiple choice question. Cost Positive technological changes Price Tastes and preferences

Price

Select all that apply Which of the following are the characteristics of a competitive market? Multiple select question. A surplus of narrow range of products Standardized products A large number of buyers but a small number of sellers A large number of buyers and sellers

Standardized products A large number of buyers and sellers

Select all that apply Which of the following types of goods affect the demand for another product due to a change in their price? Multiple select question. Normal goods Inferior goods Substitute goods Complementary goods

Substitute goods Complementary goods

Which of the following specifically refers to demand? Multiple choice question. The buyer side of any market The producer side of any market Both the buyer and seller sides of any market The seller side of any market

The buyer side of any market

What is the price where the intentions of buyers and sellers match? Multiple choice question. The equilibrium quantity The inferior price The surplus price The equilibrium price

The equilibrium price

Other things equal, which of the following is correct regarding increasing the number of sellers in an industry? Multiple choice question. The market supply becomes greater The quality of products increases The supply curve shifts to the left. More firms will leave the industry

The market supply becomes greater

Select all that apply Which are reasons for changes in buyer tastes? Multiple select question. The results of health studies The introduction of products The development of new technology The stability of existing markets

The results of health studies The introduction of products The development of new technology

True or false: Resource costs or changes in these costs of production are responsible for shifts in the supply curve. True false question.TrueFalse

True

True or false: When the price of one product rises, the demand for its substitute will increase

True

Select all that apply Which of the following illustrate the relationship between a good and its complement? (Check all that apply.) Multiple select question. When the price of lettuce increases, the demand for salad dressing decreases. When the price of Nike increases, the demand for Reebok increases. When the price of hamburger decreases, the demand for hot dogs decreases. When the price of tuition decreases, the demand for textbooks increases.

When the price of lettuce increases, the demand for salad dressing decreases. When the price of tuition decreases, the demand for textbooks increases.

The effects on equilibrium price and quantity due to an increase in supply and a simultaneous decrease in demand are shown by ______. Multiple choice question. an increase in equilibrium price and quantity a decrease in equilibrium price and an indeterminate change in equilibrium quantity an indeterminate change in equilibrium price and indeterminate change in equilibrium quantity an indeterminate change in equilibrium price and an increase in equilibrium quantity

a decrease in equilibrium price and an indeterminate change in equilibrium quantity

The inverse relationship between price and quantity demanded can be graphically illustrated by ______. Multiple choice question. a horizontal line an upward sloping curve a vertical line a downward sloping curve

a downward sloping curve

The supply curve is ______ sloping curve. Multiple choice question. a negative a downward an upward a horizontal

an upward

The rationing function of prices refers to the ability of the competitive forces of supply and demand to establish a price at which ______. Multiple choice question. buying and selling decisions are inconsistent buying and selling decisions are consistent buying, but not selling, decisions are consistent selling, but not buying, decisions are consistent

buying and selling decisions are consistent

Price controls or ______ mandated in the apartment rental market benefit the consumer by establishing a price ______ the free market equilibrium price. Multiple choice question. ceilings; above floor; greater ceilings; below floor; below

ceilings; below

The concept of demand can be summarized by a schedule or curve showing the quantity of a product that would be ______. Multiple choice question. given away at only one price produced at various possible prices subsidized at various possible prices consumed at various possible prices

consumed at various possible prices

The ______ incurred by firms when producing a good or service arise from the prices of the inputs that are used to produce said good or service. Multiple choice question. losses costs of production marginal product of labor negative externality

costs of production

An increase in business taxes causes a(n) ______ in supply and will ______ production costs. Multiple choice question. decrease; decrease decrease; increase increase; decrease increase; increase

decrease; increase

An unfavorable change in consumer tastes and preferences for a product will ______ demand, which is illustrated as a shift of the demand curve to the ______. Multiple choice question. increase; right increase; left decrease; right decrease; left

decrease; left

Consumers experience ______ marginal utility the more they consume of a particular good or service. Multiple choice question. constant diminishing additional increasing

diminishing

According to the law of supply, price and quantity supplied have a(n) ______ relationship. Multiple choice question. inverse exponential direct negative

direct

A price (one word) is a minimum price fixed by the government, generally imposed above the equilibrium price.

floor

Producer expectations refer to firms' expectations of ______ for a good or service that they produce. Multiple choice question. life-cycle future prices resource availability

future prices

When the price of Coke rises, the demand for Pepsi is likely to ______. Multiple choice question. stay the same decrease increase

increase

A decrease in supply while holding demand constant results in a(n) ______ in equilibrium price, and a(n) ______ in equilibrium quantity. Multiple choice question. decrease; increase increase; increase decrease; decrease increase; decrease

increase; decrease

Select all that apply If the government of a country subsidizes the production of a good, it: Multiple select question. increases the cost of production. increases supply. reduces supply. lowers the cost of production.

increases supply. lowers the cost of production.

The vast majority of goods that are not related to one another are called ______ goods. Multiple choice question. complementary independent dependent substitute

independent

A demand curve shows the ______. Multiple choice question. positive relationship between price and quantity demanded for a product inverse relationship between price and quantity demanded for a product positive relationship between price and quantity supplied for a product inverse relationship between price and quantity supplied for a product

inverse relationship between price and quantity demanded for a product

A price ceiling is the maximum legal price a seller may charge for a product or service where a price at or below the ceiling is ______ and a price above the price ceiling is ______. Multiple choice question. legal; legal illegal; legal legal; illegal illegal; illegal

legal; illegal

The income effect indicates that a ______ price increases the purchasing power of income, enabling consumers to purchase ______ of a product and vice versa. Multiple choice question. lower; more lower; less higher; more higher; less

lower; more

When drawing a supply curve, _____ is labeled on the vertical axis. Multiple choice question. cost quantity product price

price

The supply curve illustrates the relationship between ______. Multiple choice question. cost and price product and quantity supplied price and quantity demanded price and quantity supplied

price and quantity supplied

The production of a good or service in the least costly way is known as ______ efficiency. Multiple choice question. price productive allocative expenditure cost

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 ______. Multiple choice question. investment in physical capital goods energy efficiency substitution in production productive efficiency the law of supply

productive efficiency

Diminishing marginal ______ states that, in any specific time period, buyers will derive less satisfaction from each additional unit of the product consumed. Multiple choice question. incentives returns utility demand

utility

Select all that apply Which of the following are determinants of supply? (Check all that apply.) Multiple select question. Technology Taxes and subsidies Consumer expectations Resource prices

Technology Taxes and subsidies Resource prices

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

Blank 1: equilibrium

Government may place legal limits on prices when it is determined that prices are unfairly (high/low) for buyers or unfairly (high/low) for sellers.

high, low

Greater resource prices _______ the costs of production, thereby, ______ the incentive for firms to produce the good at each price. Multiple choice question. increases; reducing decreases; raising decreases; reducing increases; raising

increases; reducing

On a simple supply model, a change in quantity supplied is illustrated by a ______ and a change in supply is illustrated by a ______. Multiple choice question. shift of the demand curve; shift of the supply curve movement along the supply curve; shift of the supply curve shift of the supply curve; movement along the supply curve

movement along the supply curve; shift of the supply curve

If prices of a good or service are expected to increase in the future, the demand for that good or service will ______ today. If prices are expected to decrease in the future, demand will ______ today. Multiple choice question. fall; fall rise; not change rise; fall fall; rise rise; rise

rise; fall

A ______ the demand curve represents a change in demand while a ______ the demand curve represents a change in the quantity demanded. Multiple choice question. rotation of; movement along shift of; movement along rotation of; shift of movement along; shift of

shift of; movement along

A change in demand is represented by a ______ the demand curve while a change in quantity demanded is represented by a _______ the demand curve. Multiple choice question. movement along; shift of shift of; shift of movement along; movement along shift of; movement along

shift of; movement along